Workshop on Trade Facilitation and Aid for Trade: Sustaining Trade Facilitation Gains Through Effect

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Workshop on Trade Facilitation and Aid for Trade
Sustaining Trade Facilitation Gains Through
Effective Aid for Trade Strategies Joseph
Atta-MensahNEPAD and Regional Integration
DivisionUnited Nations Economic Commission for
Africa12-13 March 2009, Addis Ababa, Ethiopia
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PRESENTATION OUTLINE

• Evolving definition and scope of trade
  facilitation
• Key issues of trade facilitation
• Trade facilitation initiatives in Africa
• Way forward

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Evolving Definition and Scope of Trade
Facilitation

• Logistics of moving goods through ports or
  documentation associated with cross-border trade
• Environment in which trade transaction takes
  place
• Transparency of customs, regulatory agencies
• Harmonization of standards, conformity with
  international and regional regulations
• Natural barriers to trade
• Non-tariff barriers

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Weak Intra-African Trade
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Marginalisation in the Globalisation Process

• Volume of goods across borders has increased
  exponentially in recent years 50 times higher in
  1999 than in 1960
• Africa has failed to benefit from steady
  increase in international trade
• In 1950, Africa delivered 10 of world exports,
  by 2000 this share had declined to lt3
• ? Situation worse in sub-Saharan Africa whose
  share of world exports of goods and services is lt
  1.5

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KEY ISSUES OF TRADE FACILITATION

• High transport costs
• Complicated customs procedures
• Inadequate usage of information and communication
  technology
• Payments, insurance and other financial
  requirements
• International trade standards

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HIGH TRANSPORT COSTS
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CONTRIBUTING FACTORS TO HIGH TRANSPORT COSTS IN
AFRICA

• Inadequate infrastructure network
• Inefficient transport services
• Multiplicity of rules governing international
  transportation of goods
• Numerous roadblocks

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• VARIATIONS IN TECHNICAL STANDARDS FOR VEHICLES
  HAMPER MOVEMENT OF GOODS

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ROADBLOCKS ARE A MAJOR OBSTACLE TO TRADE IN AFRICA
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CUMBERSOME CUSTOMS AND ADMINISTRATIVE PROCEDURES
HAMPERS TRADE EXPANSION

• Excessive documentary requirements
• Insufficient use of automated systems
• Lack of transparency, predictability and
  consistency
• Lack of cooperation among customs and other
  governmental agencies
• Separated border posts, differences in working
  hours, visa requirements for transport crew
  members
• New maritime security measures

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INSUFFICIENT USE OF ICT INCREASES TRADE
TRANSACTION COSTS

• Telecommunication services are inadequate,
  inefficient and very expensive
• Strong linkage between customs delays and
  telephone charges and internet distribution
• Botswana and Namibia 4 days delay 4.8 and
  4.28 per 3 minutes international call
  respectively
• Ethiopia and Cameroon 30 and 20 days delays
  7.44 and 7.7 per 3 minutes international calls
  respectively
• Low level of awareness of e-commerce
• Insufficient physical infrastructure
• Deficient electronic transaction infrastructure
• Inadequate legal and regulatory framework

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Mobile Telephone and Internet connectivity in
African RECs
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INEFFICIENT INTERNATIONAL PAYMENT MECHANISMS
RESULT IN LONG DELAYS

• Documentary credit is the most popular
  international payment system in Africa
• Half of all payment requests are rejected because
  of documentary inconsistencies.
• High insurance premiums for African countries
• Customs guarantee payments represent a high cost
  for transport operators
• Multiplicity of currencies and exchange rate
  arrangements

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MULTIPLICITY OF INTERNATIONAL TRADE STANDARDS
CONSTITUTE A BARRIER TO TRADE

• Standards have potential to substitute tariffs
  and quantitative restrictions
• Standards impose higher production costs for
  firms in developing countries
• EU standards on agricultural products are of
  great concern to Africa

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EFFORTS TO FACILITATE TRADE IN AFRICA

• Efforts at sub regional level
• Several RECS have trade facilitation programmes
• Bilateral cooperation
• Several bilateral agreements exist
• Cameroon has signed conventions with Chad and
  CAR special facilities provided to landlocked
  countries at seaports
• Efforts at country level - One stop shops
• Efforts by international organizations
• Corridor management committees
• Observatories of abnormal practices
• Joint border posts

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Regional TF Activities

• Corridors recognized/benefiting from SSATP
• Djibouti-Addis Ababa Corridor
• Northern Corridor
• Dar es Salaam Corridor
• North South Corridor
• Point Noire-Brazzaville/Matadi-Kinshasa-Bangui
  Corridor
• Douala-Bangui-Njamena Corridor
• ECOWAS-UEMOA Corridors (Lagos-Abidjan
  Tema-Ouaga-Niamey Bamako Lome-Ouaga-Niamey
  Bamako)

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Regional TF Activities Establishment of Corridor
Committees (cont)

• Technical Committee for Djibouti- Addis Ababa
  Corridor (being) established in Ethiopia/
  Djibouti(?)
• Charter for Douala-Njamena-Bangui Corridor
  reviewed National Facilitation Committee created
  in Chad
• Standard text for National Facilitation and
  Corridor Committees established in ECOWAS and 8
  National Committees set up

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Regional TF Activities Creation of
Observatories

• Committee need relevant information to function
  effectively
• Observatories could play an important role in
  that regard
• Observatory exist in Abidjan-Lagos Corridor
• Baseline survey for Northern Corridor observatory
  completed

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Regional TF Activities Establishment of Joint
Border Posts

• Prominent among TF projects
• Several pilot projects introduced, including
• Malaba (Kenya/Uganda border)
• Seme/ Krake Plage (Benin/Nigeria)
• Cinkase (Burkina Faso/Togo)
• Chirundu (Zambia/Zimbabwe)
• Having an appropriate legal framework is a
  constraint to establishment of joint border post
• Study on legal status of joint border posts
  undertaken by ECOWAS

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Trade Facilitation measures in COMESA, ECOWAS and
CEMAC

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THE WAY FORWARD

• 1. Strengthen Africas infrastructure network to
  support international trade
• 2. Improve the efficiency of transport services
• 3. Remove illegal roadblocks
• 4. Speed up customs and border crossing
  procedures
• 5. Promote the use of new technology
• 6. Strengthen regional initiatives
• 7. Reduce negative impact of multiplicity of
  standards

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Thank you!