Modernising Customs systems helps to boost trade flows in Africa
May 03, 2016
Cargo delays at African ports are one of the major obstacles to trade in Africa and in turn hinders economic development on the continent. When cargo spends too much time at ports while waiting for clearance for export or import, it increases the costs for traders, businesses, and ultimately the consumer.
It is often the case that modernising systems and re-engineering cargo clearance processes could significantly reduce dwell times and delays at the port, without the need of expensive investments to increase the port’s capacity. To improve trade facilitation, ICF has been supporting projects that modernise customs procedures by bringing together stakeholders from the Government, the private sector, controlling agencies, port authorities, private terminal operators, logistics operators and large shippers.
ICF has worked together with these stakeholders to design and implement projects to install modernised systems that help to reduce cargo dwell times. The replacement of manual and inefficient processes with electronic systems and procedures enables faster, more transparent and cost effective trade facilitation. Countries that have benefitted from ICF’s support include Senegal, Burkina Faso, Ethiopia, Kenya, Sao Tome and Principe and Tanzania.
According to the Organisation for Economic Co-operation and Development (OECD), trade facilitation measures introduce new ways to fulfil traditional mandates by streamlining and simplifying procedures. The OECD has developed a set of trade facilitation indicators (TFI) which identify areas for assessing the potential impact of reforms needed to boost trade flows in order for countries to reap greater benefits from international trade. The TFI indicators cover the full spectrum of border procedures including documentation, automation, information availability and procedures. According to the OECD, trade facilitation can benefit all countries, whether they are exporting or importing goods, by allowing better participation in the global value chain for international trade.
The United Nations Economic Commission for Africa (UNECA)’s report on Trade Facilitation from an African Perspective states that reduced trade costs can significantly boost a country’s trade performance. The report states that ineffective customs procedures directly dampen Africa’s integration into the global market. Therefore enhancing the effectiveness of customs procedures seems to be a key priority for trade facilitation from an African point of view.
The UNECA report also indicates that African countries have made significant progress in many areas of trade facilitation by modernising systems and automating customs procedures. From a macro-economic perspective, efficient cargo clearance processes can assist cross-border and international trade and enhance a port’s competitiveness, leading to faster economic growth for the country.
Through twelve projects, ICF has invested a total of US $23 million to improve trade facilitation in six African countries and one regional block. Below are a few examples of these projects and what they have achieved.
In Sao Tome and Principe, a small island in the Gulf of Guinea, ICF worked with the Government to reduce procedures, time and costs related to international trade transaction by establishing an end-to-end Single Window system for trade. Following ICF’s intervention, this new system helped the country to reduce cargo processing time by providing importers and exporters with one portal to process custom clearances. This modernised system reduced trade procedures in the country from 31 to only three and reduced the time to remove goods from customs from ten days to a mere three days.
In Liberia, Customs clearance processes within the Freeport of Monrovia were very rudimentary with agencies maintaining manual ledgers and records to account for containers and goods passing through the port. ICF worked with the Government of Liberia to simplify and automate administrative processes in the Freeport of Monrovia to ensure a faster and predictable goods clearing process.
Due to the computerisation of all the manual systems, the number of goods clearing procedures at the Freeport of Monrovia were reduced from 14 to nine. As a result, it now takes 3.62 days from the time of application to the release of goods instead of the previous 30 days. Over 60 computers and an office network were installed at the port and about 110 customs staff and brokers received computer skills training to ensure effective use of the automated customs system.
The demand for new projects in the trade facilitation sector remains a high priority. ICF will continue to work with key stakeholders in modernising trade facilitation in order to improve the investment climate in African countries and make them easier places to do business.
People who read this article also read:
Infrastructure facilitation in Africa: a green light for investors
Tanzania to modernise its Customs Administration