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Trade Facilitation from an African Perspective

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In the context of negotiations on the proposed agreement on trade facilitation, this paper provides a thorough analysis of key trade facilitation issues from an African perspective, highlighting what is at stake for the continent, thereby contributing to inform the opinions of African negotiators at a critical juncture. The premise of this analysis is that there is a consensus in the empirical literature, regardless of the methodology utilized, on the positive and significant impact trade facilitation could have for Africa’s trade performance.

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Trade Facilitation
an African Perspective




Trade Facilitation from an
African Perspective




© United Nations Economic Commission for Africa, 2013
Addis Ababa, Ethiopia


All rights reserved
First printing November 2013


ISBN-13: 978-99944-61-06-6
e-ISBN-13: 978-99944-62-06-3


Material in this publication may be freely quoted or reprinted. Acknowledgement is requested,
together with a copy of the publication.


Designed and printed in Addis Ababa, Ethiopia by the ECA Documents Publishing and
Distribution Unit. ISO 14001:2004 certified.


Cover Photos:


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Web: www.uneca.org




iiiTrade Facilitation from an African Perspective




Table of Contents


Acronyms and Abbreviations v


Acknowledgments vii


1. Introduction 1


2. Trade Costs In Africa: Why Is Trade Facilitation Critical 3
2.1 Trade costs and regional integration 10


3. Trade Facilitation and Intermediate Products 17


4. Trade Facilitation Instruments: WTO Provisions and
African Realities 25


4.1. Background 25
4.2. Tracking Activities Related to Articles 1-6 26
4.3. Tracking Activities Related to Articles 7-14 27
4.4. Revised Kyoto Convention, Customs Administrations and WTO Trade


Facilitation Negotiations 38
4.5. Conclusions 39


5. The Cost of Trade Facilitation: Some Orders of Magnitude 41
5.1. Background 41
5.2. Trade Facilitation Cost Components 42
5.3. Cost of Single Window systems 42


6. Building Capacity for Trade Facilitation: How far can WTO
Negotiations go? 45


6.1 Background 45
6.2 Scope and Scale of Capacity Building for Trade Facilitation 46
6.3 Conclusion and Way Forward 48


7. Conclusions and Policy Implications 49




iv Trade Facilitation from an African Perspective




References 51
Annex 1: Literature Review Scheme 54
Annex 2: Input-Output Coefficient Table 57
Annex 3: African Regional and Sub-Regional Treaties and Conventions on
Transit Transport 60




vTrade Facilitation from an African Perspective




AAEC African Alliance for Electronic Commerce
ACMA Africa Corridor Management Alliance
AEO Authorised Economic Operators
AGOA Africa Growth and Opportunity Act
ASYCUDA Automated System for Customs Data
ATPC African Trade Policy Centre
AU African Union
BIAT Boosting Intra-African Trade
CEMAC Central African Economic and Monetary Community
CFTA Continental Free Trade Area
CIDA Canadian International Development Agency
CMA Customs Management Act
COMESA Common Market for Eastern and Southern Africa
CVTFS Virtual Trade Facilitation System
DDA Doha Development Agenda
DFID Department for International Development
EAC East African Economic Community
EBA Everything But Arms
ECA United Nations Economic Commission for Africa
ECCAS Economic Community of Central African States
ECOWAS Economic Community of West African States
ECSCAP Economic and Social Commission for Asia and the Pacific
ERA Economic Report on Africa
EU European Union
FTA Free Trade Area
GATT General Agreement on Tariffs and Trade
ICT Information and Communication Technology
IFF Illicit Financial Flow
ISRT Inter-state Road Transit Guarantee Schema
LDC Least Developed Country


Acronyms and Abbreviations




vi Trade Facilitation from an African Perspective




LLDC Landlocked Developing Country
NEPAD New Partnership for Africa’s Development
OECD Organisation for Economic Co-operation and Development
OSBP One Stop Border Posts
PICI Presidential Infrastructure Champion Initiative
PMAESA Port Management Association of Eastern and Southern Africa
PMAWCA Port Management Association of West and Central Africa
PCMS Passenger and Cargo Manifest System
RADDEX Revenue Authorities Digital Data Exchange Programme
REC Regional Economic Commission
TCC Transport Coordination Committee
REPSS Regional Payment and Settlement System
RCTG Regional Customs Transit Guarantee
RKC Revised Kyoto Convention
SACU Southern African Customs Union
SADC Southern African Development Community
SIDS Small Island Developing States
UEMOA West African Economic and Monetary Union
WCO World Customs Organisation
WTO World Trade Organisation
ZIMRA Zimbabwe Revenue Authority





viiTrade Facilitation from an African Perspective


The report “Trade Facilitation from an African Perspective” was prepared under the leader-ship of Carlos Lopes, ECA’s Executive Secretary and the overall guidance and supervision of Stephen Karingi, ECA’s Director of the Regional Integration and Trade Division. The
report was prepared by Giovanni Valensisi and Robert Tama Lisinge with valuable analytical in-
put from Maja Reinholdsson. Relevant inputs to the report were received at the ECA-AUC High
Level Retreat of the African Group (4-5 October, 2013, Montreux, Switzerland). The analysis of
trade facilitation instruments also benefitted from insights from various workshops, including
the African 10-Year review of the Almaty Programme of Action (15-18 July, 2013, Addis Ababa,
Ethiopia), First African Union Commission (AUC)/World Customs Organisation (WCO) Seminar
on the Revised Kyoto Convention (19-21 June 2013, Nairobi, Kenya); First AUC Workshop on In-
tegrated Border Management (July 2013, Harare, Zimbabwe), and the Fifth Ordinary Meeting of
the AU Sub-Committee of Directors General of Customs (9-13 September 2013, Cotonou, Benin).


Acknowledgements






1Trade Facilitation from an African Perspective


The proposed agreement on trade facilitation is one of the key issues on the negotiators’ table in the run-up to the World Trade Organisation Ministerial Conference, to be held in Bali, Indonesia, from 3 to 6 December 2013. In this context, this paper provides a thorough analy-
sis of key trade facilitation issues from an African perspective, highlighting what is at stake for the
continent, thereby contributing to inform the opinions of African negotiators at a critical juncture.
The premise of this analysis is that there is a consensus in the empirical literature, regardless of the
methodology utilized, on the positive and significant impact trade facilitation could have for Africa’s
trade performance (see Annex 1 Table 1). Against this background, the paper is admittedly not in-
tended to assess the proposed agreement from a tactical negotiating perspective, nor does it address
issues related to the “overall balance” of the deliverables that could be achieved in Bali. Taking some
distance from the negotiations as such, it rather takes a technical stance and focuses on the four key
aspects related to trade facilitation, as outlined below.


First, by analyzing relevant indicators from the World Bank Doing Business database, the paper
compares red tapes and transaction costs (for what pertains to international trade) within Africa,
as well as with the rest of the world. In light of the disproportionate magnitude of transaction costs
by international standards, the analysis confirms how critical trade facilitation is for Africa. In ad-
dition, the reviewed evidence highlights the different incidence of transaction costs distinguishing
between exports and imports flows, and underscores sub-regional and cross-country variability
(with special reference to landlocked countries).


Secondly, the paper investigates the pattern of imports of African countries, focusing in particular
on intermediate inputs. This analysis permits grasping the extent to which trade facilitation could
boost exports not only by directly cutting transaction costs, but also indirectly through providing
cheaper access to production inputs to be transformed domestically and then possibly re-exported.
Though currently this indirect effect appears to play a rather limited role, in view of Africa’s persistent
dependence on primary commodities, it is certainly far from negligible. Moreover, such an indirect
effect is set to gradually become more relevant, in so far as economic diversification advances and
African firms successfully connect to regional and global value chains.


Introduction 1




2 Trade Facilitation from an African Perspective


Introduction


Third, the paper reviews the precise instruments cov-
ered by the draft negotiating text tabled at the World
Trade Organisation, and compares them with the in-
struments already agreed within Africa at the level of
Regional Economic Communities, as well as with legal
provisions at the national level. This enables an assess-
ment of the consistency of the multilateral agenda with
Africa’s regional integration agenda and national policies,
while also identifying areas of potential synergies and
complementarities between the three. The paper also
assesses the potential synergies and complementarities
between the World Trade Organisation proposal and re-
lated multilateral conventions such as the Revised Kyoto
Convention on the Simplification and Harmonization


of Customs Procedures and the Customs Convention on
the International Transport of Goods under Cover of TIR
Carnets (TIR Convention).


Finally, the paper sheds some light on the costs underly-
ing trade facilitation activities. Adequately “costing the
trade facilitation agenda” is not only crucial in relation
to Africa’s need for development finance, but also in view
of the fact that the modalities of the proposed trade fa-
cilitation agreement introduced a unique feature: the
implementation of certain commitments (the so-called
category C) is conditioned upon the delivery of technical
and financial assistance.




3Trade Facilitation from an African Perspective


Trade Costs in
Africa: Why is Trade
Facilitation Critical 2
Having a thorough understanding of the pattern and evolution of trade costs is critical to gauge the potential impact of any trade facilitation
activity for at least four main reasons. First, as the existing
literature unanimously argues that a decline in trade-
related costs can significantly boost trade performance,
it is straightforward to see that the potential relevance
of trade facilitation is greater the higher the scope to cut
transaction costs. Secondly, and as a corollary of the first
point, knowledge of the sources of trade costs is critical in
determining which precise trade facilitation instrument
is likely to have the highest payoff. Thirdly, given that
one of the controversial aspects of the proposed Trade
Facilitation Agreements is whether or not it would dispro-
portionately facilitate imports, it is important to assess the
extent to which imports and exports costs are correlated
and why. Fourthly, the pattern of trade-related costs across
countries of origin or destination can clearly affect the
overall impact of trade facilitation on regional integra-
tion. The present section elaborates the above points from
an African perspective, by analyzing the magnitude and
evolution of trade-related transaction costs within Africa,
and in relation to the rest of the world.


Two different and complementary datasets are utilized
here to provide a thorough account of trade-related costs:
the “Trading across borders” indicators drawn from the
World Bank’s Doing Business database, and the bilateral
trade costs estimates drawn from the Economic and Social


Commission for Asia and the Pacific (ESCAP) - World
Bank Trade Costs Database. It is convenient to start the
assessment of trade costs from the former set of indicators,
which essentially measure the document requirement,
time and costs associated with exporting/importing a
standardized cargo of goods (20-foot container, 10 tons
of weight, worth $ 20,000), from each country’s largest
business city to the closest port.1 The six indicators in
question span the period 2006-2012, and represent a
standardized and internationally comparable measure of
document requirements, time and monetary costs related
to international trade.


The comparison of these six dimensions of transaction
costs at a regional level is presented in Table 1, which
refers to the latest available year namely 2012. The figures
reveal that Africa excluding Northern Africa remains by
far one of the two regions where international trade is


1 With respect to the time required to export or import, the measures
presented include the time to (i) obtain all the documents (bank
documents, custom clearance documents, port and terminal han-
dling documents, and transport documents), (ii) inland transport
and handling, (iii) custom clearance and inspections, and (iv) port
and terminal handling. Conversely, indicators of costs to import/
export include all official costs for (a) all documentation, (b) inland
transport and handling, (c) custom clearance and inspections, and
(d) port and terminal handling. Neither the time-related indica-
tor nor the cost-related one, however, take into account ocean
transport time; hence they are defined in a country-specific way,
regardless of the destination/origin of the container. For further
methodological details, refer to Djankov, et al.(2010).




4 Trade Facilitation from an African Perspective


Trade Costs in Africa: Why is Trade Facilitation Critical


most expensive, along with Eastern Europe and Central
Asia where however the share of landlocked countries is
higher. Document requirements also appear to be par-
ticularly burdensome by international standards, with
an average of 8 and 9 different documents necessary for
export and import respectively. Cost wise, importing
activities are unduly disadvantaged in Africa excluding
Northern Africa, to the extent that the import of one
standard container takes on average 37 days and costs
US$ 2,567. This compares to 22 days and US$ 958 in East
Asia and Pacific, 19 days and USD 1,612 in Latin America
and the Caribbean, and 33 days and US$ 1,736 in South
Asia. Though exports are more costly in Eastern Europe
and Central Asia, Africa excluding Northern Africa still
compares rather poorly with the remaining regions. The
export of one standard container takes on average 31 days
and costs US$ 1,990 in the sub-Saharan African region;
that is 10 days and US$ 1,067 more than from East Asia
and the Pacific, 14 days and US$ 722 more than from Latin
America, 1 day less but US$ 387 more than in South Asia.2


In line with the previous literature, Table 1 broadly vindi-
cates the prevalence of disproportionately high transaction
costs associated with international trade in the region,
resulting in a cost wedge which penalizes African firms
and consumers. Regional averages could mask, however,
significant variability across country, especially in a con-
tinent as diverse as Africa; hence it is important to look


2 It may be worth noting also that Africa (excluding Northern Africa)
appears to be the region where the gap between import and export
costs is the highest: imports are on average 29% more expensive
than exports, and take nearly 20% more time.


at a more disaggregated picture. This is done in Figure 1
and Figure 2, which present a country-by-country analy-
sis of the sources of trade-related costs, for exports and
imports respectively.


Starting from the costs of exports, Figure 1 indeed un-
derscores a large variability across African countries,
both in terms of overall size of the costs and in terms of
cost structure, as well as a heightened incidence of export
costs vis-à-vis the costs of import . Overall, in 2012 export
costs exceeded the world average for 25 of the 51 African
countries for which data is available, whilst the time
necessary to export surpassed the corresponding world
average for as many as 35 African countries.3 In the same
vein, eleven of the world’s twenty countries where the
cost of export is the most expensive are African, namely
Botswana, Burundi, Central African Republic, Chad,
Congo, Democratic Republic of Congo, Niger, Rwanda,
Uganda, Zimbabwe – all landlocked countries.


Broadly speaking, the above assessment holds true also
if one turns the attention to the costs of imports (Figure
2), with the only caveat that in the African region import
takes on average 22% more time and is roughly 25% more
costly than export.4 Indeed, import costs exceed the cor-


3 Even if one excludes inland transportation costs, in line with a nar-
row definition of trade facilitation, the remaining costs of exports
exceed the corresponding world average in 35 African countries
out of 51 African countries for which data is available,


4 As a matter of fact, import and export costs are closely interrelated,
with a correlation coefficient of 0.93 (statistically significant at
1%); similarly strong correlation prevail across cost components
(document preparation, custom, terminal handling and transport).


Table 1: Transaction costs in international trade, regional averages in 2012


Documents
to export
(number)


Time to ex-
port (days)


Cost to ex-
port (US$ per


container)


Documents
to import
(number)


Time to im-
port (days)


Cost to im-
port (US$ per


container)
East Asia & Pacific 6 21 923 7 22 958


Eastern Europe & Central Asia 7 26 2,134 8 29 2,349


Latin America & Caribbean 6 17 1,268 7 19 1,612


Middle East & North Africa 6 19 1,083 8 22 1,275


OECD high income 4 10 1,028 5 10 1,080


South Asia 8 32 1,603 9 33 1,736


Sub-Saharan Africa 8 31 1,990 9 37 2,567


Source: Doing Business Database




5Trade Facilitation from an African Perspective


Trade Costs in Africa: Why is Trade Facilitation Critical


responding world average in 27 African countries out of
51 countries for which data is available, whilst in as many
as 37 of them the required procedures take longer time.
Similarly, of the world’s twenty countries where import
cost the most thirteen are African: Botswana, Burkina
Faso, Burundi, Central African Republic, Chad, Demo-
cratic Republic of Congo, Congo, Mali, Niger, Rwanda,
Uganda, Zambia, and Zimbabwe – all except Congo being
landlocked countries.


Whether in terms of export or import costs, Landlocked
Developing Countries (LLDCs) stand out for their dispro-
portionately high trade-related costs, mainly on account
of the significantly higher costs for inland transportation.
Indeed, in the case of some LLDCs, such as Botswana, Bu-
rundi, Malawi, Rwanda, Zambia, and Zimbabwe, inland
transportation costs reached such an exorbitant level, that
they accounted for over 70% of the total import/export
costs. In addition, geographical disadvantages are often
compounded by more expensive and lengthier import/


export procedures, especially in the Central African region
(Central African Republic, Chad, Mali and Niger, as well
as in some non-LLDCs such as Angola, Congo, Demo-
cratic Republic of Congo and Gabon). Besides, African
Least Developed Countries (LDCs) appear to have more
expensive customs and terminal handling compared to
non-LDCs; conversely African Small Island Developing
States (SIDS), like in other world regions, appear to face
significantly lower costs for exports, both in terms of
overall costs and for custom and terminal handling.


In addition to the cross-country pattern of trade-related
costs, it is insightful to analyze their evolution over time.
At a global level, between 2006 and 2012 import/export
costs have increased by 23% in nominal terms. A similar
upward tendency has taken place also within Africa,
mainly on account of rising costs for document prepa-
ration and inland transport. Yet, over the same span of
time 7 countries managed to reduce their nominal cost
of export – namely Algeria, Egypt, Equatorial Guinea,


Figure 1


Cost of export from African countries by cost component; 2012


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Source: ECA calculation based on Doing Business Database




6 Trade Facilitation from an African Perspective


Trade Costs in Africa: Why is Trade Facilitation Critical


Gambia, Mauritius, Rwanda and Tanzania – and other 5
reduced their cost of imports: Algeria, Egypt, Equatorial
Guinea, Ethiopia, and Morocco.


Along the same line, Figure 3 presents diagrammatically
the evolution of import and export costs between 2006
and 2012, in relation to the global average. The reading of
the chart goes as follows: countries in the first quadrant
have witnessed an increase in both import and export
costs vis-à-vis their average competitors; countries in
the second quadrant have observed an increase in export
costs but a decrease in import cost relative to the world
average; countries in the third quadrant have improved
both import and export costs, whilst countries in quadrant
four have witnessed a fall in export costs but an increase
in import costs.


As shown in Figure 3, over the period considered 24 Af-
rican countries have managed to reduce both import and
export costs relative to the corresponding world average,
other 11 countries have actually witnessed an increase


in both import and export costs; and finally 16 African
countries have improved only one of the two costs. Inter-
estingly, amongst Africa’s best performers there are not
only countries like Algeria, Egypt, and Morocco, but also
some Landlocked Developing Countries (LLDCs) such as
Burkina Faso, Ethiopia, and Rwanda. This suggests that, if
geography certainly matters in determining trade-related
costs, political will and adequate investments do also play
a fundamental role, possibly allowing LLDCs to reap
significant benefits from trade facilitation.


The importance of political will can be gauged also by the
evolution of document requirements for import-export
activities in Africa, summarized diagrammatically in
Figure 4. Between 2007 (the earliest year available) and
2013, 11 African countries had reduced the number of
documents required to both export and to import: Bur-
kina Faso, Djibouti, Lesotho, Madagascar, Mali, Morocco,
Rwanda, Senegal, South Africa, Swaziland, and Uganda.
Besides, 4 more countries had cut only documentation
required to export (Algeria, Angola, Malawi, and Sierra


Figure 2


Cost of import into African countries by cost component; 2012


0


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4000


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Document Preparation Customs Terminal Handling Inland Transportation


Source: ECA calculation based on Doing Business Database




7Trade Facilitation from an African Perspective


Trade Costs in Africa: Why is Trade Facilitation Critical


Leone), and the same number had lessened the number
of import documents (Botswana, Mauritius, Zambia,
and Zimbabwe). Yet, over the same time, Cameroon,
Central African Rep., Chad, Gabon had actually increased
documentation requirements. As a result, over 30 African
countries still foresee heavier documentation require-
ments than the rest of the world, with ensuing additional
costs for producers and consumers.5


With a view to identifying the trade facilitation instru-
ments that may offer the greatest payoff, it is insight-
ful to compare African countries’ performance in each
phase of the import/export process to the corresponding
world average. This allows recognizing more precisely


5 The 35 African countries having heavier documentation require-
ments to export than the world average are Algeria, Angola, Benin,
Burkina Faso, Burundi, Cameroon, Central African Rep., Chad,
Comoros, Congo, Dem. Rep., Congo, Côte d’Ivoire, Egypt, Equa-
torial Guinea, Eritrea, Ethiopia, Gabon, Ghana, Guinea, Kenya,
Lesotho, Liberia, Malawi, Mauritania, Mozambique, Namibia,
Niger, Nigeria, Rwanda, São Tomé & Principe, Sierra Leone, Sudan,
Swaziland, Uganda, Zimbabwe. On the other hand, the following
(33) African countries require a higher number of documents than
the world average for importers: Algeria, Angola, Benin, Burkina
Faso, Burundi, Cameroon, Central African Rep., Chad, Comoros,
Congo, Dem. Rep., Congo, Côte d’Ivoire, Egypt, Eritrea, Ethiopia,
Gabon, Guinea, Liberia, Madagascar, Malawi, Mali, Mauritania,
Morocco, Mozambique, Niger, Nigeria, Rwanda, Swaziland, Tan-
zania, Togo, Uganda, Zambia, and Zimbabwe.


how African countries perform compared to their aver-
age competitors, and where they stand to gain more from
dedicated trade facilitation activities. This kind of analysis
is summarized in Figure 5, which depicts time-costs (top
panel), as well as monetary costs (bottom panel) for both
the average and the median African country. 6 Broadly
speaking, the chart confirms the heightened incidence of
trade-related transaction costs in Africa; this said, aver-
age and/or median figures should not obscure the fact
that, for each phase of the import/export process, there
are roughly 15-20 African countries that perform better
than the world average.


Several considerations can be drawn on the basis of Fig-
ure 5. First, in African countries document preparation
for either imports or exports appears to be significantly
more time-consuming than in the rest of the world, to
the extent that in the median African country document
preparation takes about 25% more time. Secondly, cus-
tom procedures and terminal handling tend to be slower


6 Given the influence of geographic “destiny variables” on inland
transportations, the comparison of related duration and costs with
the world average would have little significance unless properly
adjusted for the different distance from the sea. Accordingly, Figure
5 only focuses on document preparation, custom, and terminal
handling.


Figure 3


Change in trade costs relative to the world average; 2007-2012


Cost of import


Co
st


o
f e


xp
or


t


150%


125%


100%


75%


50%


25%


0


-25%


-50%


-75%


-100% -75% -50% 50% 75% 100% 125% 150%-25% 25%0


Source: ECA calculation based on Doing Business Database




8 Trade Facilitation from an African Perspective


Trade Costs in Africa: Why is Trade Facilitation Critical


Figure 4


Number of export documents required in Africa


0 3 6 9 12 15


Algeria


Angola


Benin


Botswana


Burkina Faso


Burundi


Cameroon


Cape Verde


Central African Rep.


Chad


Comoros


Congo, Dem. Rep.


Congo


Côte d'Ivoire


Djibouti


Egypt


Equatorial Guinea


Eritrea


Ethiopia


Gabon


Gambia


Ghana


Guinea


Guinea-Bissau


Kenya


Lesotho


Liberia


Madagascar


Malawi


Mali


Mauritania


Mauritius


Morocco


Mozambique


Namibia


Niger


Nigeria


Rwanda


São Tomé & Principe


Senegal


Seychelles


Sierra Leone


South Africa


Sudan


Swaziland


Tanzania


Togo


Tunisia


Uganda


Zambia


Zimbabwe


World average


2007 2011


Number of import documents required in Africa


0 5 10 15 20


Algeria


Angola


Benin


Botswana


Burkina Faso


Burundi


Cameroon


Cape Verde


Central African Rep.


Chad


Comoros


Congo, Dem. Rep.


Congo


Côte d'Ivoire


Djibouti


Egypt


Equatorial Guinea


Eritrea


Ethiopia


Gabon


Gambia


Ghana


Guinea


Guinea-Bissau


Kenya


Lesotho


Liberia


Madagascar


Malawi


Mali


Mauritania


Mauritius


Morocco


Mozambique


Namibia


Niger


Nigeria


Rwanda


São Tomé & Principe


Senegal


Seychelles


Sierra Leone


South Africa


Sudan


Swaziland


Tanzania


Togo


Tunisia


Uganda


Zambia


Zimbabwe


World average


2007 2011


Source: ECA calculation based on Doing Business Database




9Trade Facilitation from an African Perspective


Trade Costs in Africa: Why is Trade Facilitation Critical


Figure 5


Africa’s performance relative to world average; 2012


0


30


60


90


120


150


Terminal HandlingCustomsDocument PreparationTerminal HandlingCustomsDocument Preparation


Average of African countries Median African country


Time to export Time to import


Africa’s performance relative to world average; 2012


0


30


60


90


120


150


Terminal HandlingCustomsDocument PreparationTerminal HandlingCustomsDocument Preparation


Average of African countries Median African country


Costs to export Costs to import


Source: ECA calculation based on Doing Business Database




10 Trade Facilitation from an African Perspective


Trade Costs in Africa: Why is Trade Facilitation Critical


in African countries than in the rest of the world, but
more so with regards to imports than to exports. Thirdly,
custom procedures appear to be particularly costly by
international standards, to the point that in the median
African countries they appear to be 30% more expensive
than the world average. In light of the above, streamlining
the documentation requirements and enhancing the cost-
effectiveness of customs appear to be the key priorities
from the African point of view.


Against this background, one of the concerns with trade
facilitation is that, though exerting in principle a positive
effect on trade opportunities, it may end up boosting im-
ports disproportionately, thereby exacerbating balance of
payment deficits, including in many (non-resource-rich)
African countries. In this context, it could be insightful
to examine the correlation matrix between exports and
imports costs, reported in Table 2. The matrix indeed


confirms the strong positive relationship between total
import and export costs, with a correlation coefficient of
0.93 significant at 1% level (see orange cell). In addition,
the various export cost components –namely document
preparation, custom, terminal handling and transport –
are significantly correlated with the corresponding cost
components on the import side (see yellow cells). Interest-
ingly, costs for export document preparation are strongly
correlated with all other costs components on both the
export and import side (see column one). Conversely,
export costs for custom and terminal handling do not
appear to be strongly correlated with many other cost
components on the import side. This may suggest that
reducing costs for custom (terminal handling) on the
export side may have similar effects on custom (terminal
handling) costs for imports, but have only a minor effect
on total import costs.


2.1 Trade costs and regional integration


Whilst the above analysis gives a fairly good picture of
the incidence trade costs in Africa and of the associ-
ated trade facilitation needs, Doing Business indicators
say little about how trade costs, as well as facilitation,
affect Africa’s regional integration efforts. To address
this point, we need to move to the Economic and Social


Commission for Asia and the Pacific (ESCAP)-World
Bank Trade Costs Database, which allow disentangling
trade frictions at a bilateral level, and includes data for
180 countries over the period 1995-2011. The indicators
contained in this database are derived from a “top down”
approach to trade costs, meaning that: they are inferred


Table 2: Correlation matrix of export and import costs in Africa; 2012


EXP C
DOC


EXP C
CUST


EXP C
TERM


EXP C
TRAN


EXP C
TOT


IMP C
DOC


IMP C
CUST


IMP C
TERM


IMP C
TRAN


IMP C
TOT


EXP C DOC 1


EXP C CUST 0.39*** 1


EXP C TERM 0.32** 0.11 1


EXP C TRAN 0.40*** 0.15 0.08 1


EXP C TOT 0.62*** 0.34** 0.29** 0.95*** 1


IMP C DOC 0.70*** 0.55*** 0.15 0.49*** 0.63*** 1


IMP C CUST 0.32** 0.80*** 0.2 0.28** 0.43*** 0.57*** 1


IMP C TERM 0.39*** 0.05 0.80*** 0.16 0.33** 0.16 0.16 1


IMP C TRAN 0.48*** 0.13 0.11 0.93*** 0.90*** 0.54*** 0.25* 0.29** 1


IMP C TOT 0.58*** 0.27* 0.23* 0.89*** 0.93*** 0.67*** 0.41*** 0.41*** 0.97*** 1


Source: ECA calculation based on Doing Business Database


Note: *, **, *** mean statistically significant at 10%, 5%, and 1% respectively




11Trade Facilitation from an African Perspective


Trade Costs in Africa: Why is Trade Facilitation Critical


from the observed pattern of trade and production on the
basis of a standard gravity model. By construction, these
comprehensive trade costs are measured in ad-valorem
equivalent relatively to domestic trade costs, and their
nature is intrinsically bilateral, since they are obtained as
the geometric average of trade costs in both directions,
i.e. those facing exports from country i to j, and those
facing exports from country j to i. Besides, they can be
decomposed into (i) bilateral tariff costs, measuring the
geometric average of tariffs imposed by the two partners
on each other’s imports, and (ii) comprehensive non-tariff
trade costs, encompassing all additional costs involved in
trading, other than tariffs. 7


Before entering into the analysis of bilateral comprehen-
sive trade costs in Africa a few caveats are of order. Notably,
as recognized in Arvis et al., 2012, the comprehensive
trade costs indicators need to be interpreted with caution
due to the following reasons:


1. Their numerical value depends to some extent on the
theoretical model from which they are derived, and
in particular is sensitive to the parametric choice for
the elasticity of substitution; as a consequence they
should preferably be used for comparative exercises,
rather than taken at their absolute value.


2. Changes in the comprehensive trade cost indicators
may potentially conflate price and volume effects.


3. Being the geometric average of trade costs in both
direction, and being measured relative to domestic
trade costs, they cannot be directly traced to policy
changes implemented in any of the two countries,
at either domestic or international level, but they
are strictly speaking the result of all these elements
simultaneously.


On this premise, Figure 6 shows the average bilateral
comprehensive trade costs for the 39 African countries
for which data is available, averaging over the 2009-2011


7 Refer to Arvis et al., 2012 for further methodological details on
the construction of bilateral comprehensive trade costs indicators,
and on the related decomposition.


period to maximize country coverage. Taking advantage
of the bilateral nature of the indicator, the chart distin-
guishes the comprehensive trade costs vis-à-vis the average
regional trade partners, from the comprehensive trade
costs with the average extra-regional partner. Since the
indicator in question encompasses “all costs involved in
trading goods internationally with another partner”, one
would reasonably expect costs to be far lower with proxi-
mate partners than with distant one. Yet, Figure 6 does not
precisely support this view in the case of Africa. Indeed,
despite geographic proximity and the establishment of
several regional economic communities in the continent,
comprehensive trade costs within Africa tend to be only
slightly lower than with the rest of the world: on average
313% to 337% in ad valorem equivalent. What is more,
as many as 10 African countries – Algeria, Angola, Cape
Verde, Egypt, Ethiopia, Gabon, Liberia, Madagascar, Ni-
geria, Sudan, and Tunisia – display higher comprehensive
trade costs with their intra-regional partners than with
the rest of the world.


To better grasp the driving force behind this situation,
Figure 7 and Figure 8 repeat the analysis of comprehen-
sive trade costs for agricultural and manufactured goods
separately, further decomposing bilateral trade costs into
a tariff and a residual non-tariff component. Two broad
considerations can be drawn in that respect. First, trade
in agricultural products generally faces higher costs than
trade in manufactures, and that holds true both within
Africa and outside the continent. Secondly, be it in agri-
culture or in manufacturing, tariffs play nowadays a minor
role compared to non-tariff elements of trade costs; this
is to some extent a consequence of the residual nature
of the non-tariff indicator (which encompass non-tariff
barriers, transport costs and all other non-tariff cost ele-
ments), and partly the result of the progressive reduction
in worldwide applied tariffs.


Focusing on agricultural goods, Figure 7 shows that for
13 African countries – namely Algeria, Burundi, Cam-
eroon, Central African Rep., Congo Dem. Rep., Congo,
Egypt, Gabon, Gambia, Morocco, Namibia, Nigeria, and
South Africa – bilateral tariff costs are higher vis-à-vis
regional partners than with the rest of the world (see top
panel). Surprisingly, this is the case despite the relatively




12 Trade Facilitation from an African Perspective


Trade Costs in Africa: Why is Trade Facilitation Critical


high degree of protection agriculture still enjoys in many
developed economies. Conversely, for Angola, Benin,
Burundi, Cameroon, Egypt, Gabon, Ghana, Nigeria, and
Tanzania it is the non-tariff cost component that is higher
vis-à-vis African partners than with the rest of the world
(see lower panel).


The assessment is broadly similar in the case of manu-
factures. Tariff costs appear to be higher within Africa
than with the rest of the world for as many as 25 African
countries: Algeria, Angola, Benin, Botswana, Burkina
Faso, Cameroon, Cape Verde, Congo, Dem. Rep., Cote
d’Ivoire, Gabon, Gambia, Ghana, Lesotho, Madagascar,
Mauritania, Morocco, Mozambique, Namibia, Niger,
Nigeria, Senegal, Togo, Tunisia, Uganda, and Zimbabwe.
On the other hand, non-tariff costs are higher vis-à-vis
regional partners that with the rest of the world for other
7 African countries including Algeria, Cape Verde, Egypt,
Madagascar, Mauritania, Morocco, and Tunisia.


Overall, notwithstanding some variability across coun-
tries, the above picture points to some clear considerations


with regards to trade costs, in line with the literature
reviewed earlier on. Most notably, heightened transaction
costs remain a significant hindrance not only to Africa’s
integration into the global market, but also – and at times
in a more pronounced way – to the continent’s own re-
gional integration. Whilst proximity should in principle
have a positive impact on comprehensive trade costs, poor
infrastructure provision and inefficient customs directly
dampen these positive effects. Meanwhile, inadequate
implementation of harmonised policies to address tech-
nical barriers to trade, sensitive product lists, and other
non-tariff barriers impinge on the regional market and
exacerbate the situation, leading to what has been called
a “proximity gap”.


Simultaneously, whilst tariff play quantitatively a minor
role compared to non-tariff comprehensive costs, they
often appear to hit regional trade disproportionately, par-
ticularly in relation to manufactures trade, as noted also in
Ofa, et al., 2012. This may be partly due to the preferential
market access a number of African countries enjoy vis-
à-vis developed and developing nations, under schemes


Figure 6


Bilateral comprehensive trade costs, 2009-2011


0


100


200


300


400


500


600


Al
ge


ria


An
go


la


Be
ni


n


Bo
ts


w
an


a


Bu
rk


in
a


Fa
so


Bu
ru


nd
i


Ca
m


er
oo


n


Ca
pe


V
er


de


Ce
nt


ra
l A


fri
ca


n
Re


p.


Co
ng


o,
D


em
. R


ep
.


Co
te


d
'Iv


oi
re


Eg
yp


t,
Ar


ab
R


ep
.


Et
hi


op
ia


Fm
S


ud
an


G
ab


on


G
am


bi
a,


T
he


G
ha


na


Ke
ny


a


Le
so


th
o


Li
be


ria


M
ad


ag
as


ca
r


M
al


aw
i


M
al


i


M
au


rit
an


ia


M
au


rit
iu


s


M
or


oc
co


M
oz


am
bi


qu
e


N
am


ib
ia


N
ig


er


N
ig


er
ia


Rw
an


da


Se
ne


ga
l


So
ut


h
Af


ric
a


Ta
nz


an
ia


To
go


Tu
ni


sia


U
ga


nd
a


Za
m


bi
a


Zi
m


ba
bw


e


Average to/from the RoW Average to/from African partners


Ad
-v


al
or


em
e


qu
iv


al
en


t


Source: ECA calculation based on ESCAP—World Bank Trade Costs Database




13Trade Facilitation from an African Perspective


Trade Costs in Africa: Why is Trade Facilitation Critical


Figure 7


Bilateral tariff costs for agricultural goods, 2009-2011


0


5


10


15


20


25


30


35
Al


ge
ria


An
go


la


Be
ni


n


Bo
ts


w
an


a


Bu
rk


in
a


Fa
so


Bu
ru


nd
i


Ca
m


er
oo


n


Ce
nt


ra
l A


fri
ca


n
Re


p.


Co
ng


o,
D


em
. R


ep
.


Co
ng


o,
R


ep
.


Co
te


d
'Iv


oi
re


Eg
yp


t


G
ab


on


G
am


bi
a,


T
he


G
ha


na


Ke
ny


a


M
ad


ag
as


ca
r


M
al


aw
i


M
al


i


M
au


rit
an


ia


M
au


rit
iu


s


M
or


oc
co


M
oz


am
bi


qu
e


N
am


ib
ia


N
ig


er


N
ig


er
ia


Rw
an


da


Se
ne


ga
l


So
ut


h
Af


ric
a


Ta
nz


an
ia


To
go


Tu
ni


sia


U
ga


nd
a


Za
m


bi
a


Zi
m


ba
bw


e


Average with the RoW Average within Africa


Pe
rc


en
t a


d-
va


lo
re


m
e


qu
iv


al
en


t


Bilateral non-tariff costs for agricultural goods, 2009-2011


0


100


200


300


400


500


Al
ge


ria


An
go


la


Be
ni


n


Bo
ts


w
an


a


Bu
rk


in
a


Fa
so


Bu
ru


nd
i


Ca
m


er
oo


n


Ce
nt


ra
l A


fri
ca


n
Re


p.


Co
ng


o,
D


em
. R


ep
.


Co
ng


o,
R


ep
.


Co
te


d
'Iv


oi
re


Eg
yp


t


G
ab


on


G
am


bi
a,


T
he


G
ha


na


Ke
ny


a


M
ad


ag
as


ca
r


M
al


aw
i


M
al


i


M
au


rit
an


ia


M
au


rit
iu


s


M
or


oc
co


M
oz


am
bi


qu
e


N
am


ib
ia


N
ig


er


N
ig


er
ia


Rw
an


da


Se
ne


ga
l


So
ut


h
Af


ric
a


Ta
nz


an
ia


To
go


Tu
ni


sia


U
ga


nd
a


Za
m


bi
a


Zi
m


ba
bw


e


Average with the RoW Average within Africa


Pe
rc


en
t a


d-
va


lo
re


m
e


qu
iv


al
en


t


Source: ECA calculation based on ESCAP—World Bank Trade Costs Database




14 Trade Facilitation from an African Perspective


Trade Costs in Africa: Why is Trade Facilitation Critical


Figure 8


Bilateral tariff costs for manufactured goods, 2009-2011


0


5


10


15


20


25


30


35


Al
ge


ria


An
go


la


Be
ni


n


Bo
ts


w
an


a


Bu
rk


in
a


Fa
so


Bu
ru


nd
i


Ca
m


er
oo


n


Ca
pe


V
er


de


Co
ng


o,
D


em
. R


ep
.


Co
te


d
'Iv


oi
re


Eg
yp


t,
Ar


ab
R


ep
.


G
ab


on


G
am


bi
a,


T
he


G
ha


na


Ke
ny


a


Le
so


th
o


M
ad


ag
as


ca
r


M
al


aw
i


M
au


rit
an


ia


M
au


rit
iu


s


M
or


oc
co


M
oz


am
bi


qu
e


N
am


ib
ia


N
ig


er


N
ig


er
ia


Rw
an


da


Se
ne


ga
l


So
ut


h
Af


ric
a


Ta
nz


an
ia


To
go


Tu
ni


sia


U
ga


nd
a


Za
m


bi
a


Zi
m


ba
bw


e


Pe
rc


en
t a


d-
va


lo
re


m
e


qu
iv


al
en


t


Average with the RoW Average within Africa


Bilateral non-tariff costs for manufactured goods, 2009-2011


0


100


200


300


400


500


Al
ge


ria


An
go


la


Be
ni


n


Bo
ts


w
an


a


Bu
rk


in
a


Fa
so


Bu
ru


nd
i


Ca
m


er
oo


n


Ca
pe


V
er


de


Co
ng


o,
D


em
. R


ep
.


Co
te


d
'Iv


oi
re


Eg
yp


t,
Ar


ab
R


ep
.


G
ab


on


G
am


bi
a,


T
he


G
ha


na


Ke
ny


a


Le
so


th
o


M
ad


ag
as


ca
r


M
al


aw
i


M
au


rit
an


ia


M
au


rit
iu


s


M
or


oc
co


M
oz


am
bi


qu
e


N
am


ib
ia


N
ig


er


N
ig


er
ia


Rw
an


da


Se
ne


ga
l


So
ut


h
Af


ric
a


Ta
nz


an
ia


To
go


Tu
ni


sia


U
ga


nd
a


Za
m


bi
a


Zi
m


ba
bw


e


Pe
rc


en
t a


d-
va


lo
re


m
e


qu
iv


al
en


t


Average with the RoW Average within Africa


Source: ECA calculation based on ESCAP—World Bank Trade Costs Database




15Trade Facilitation from an African Perspective


Trade Costs in Africa: Why is Trade Facilitation Critical


such as Everything But Arms (EBA), Africa Growth and
Opportunity Act (AGOA), and preferential markets ac-
cess granted to the Least Developed Countries (LDCs)
by emerging economies such as China and India. Yet this
finding points to some “unfinished business” in view of


the establishment of the Continental Free Trade Area, and
the realization of the broader regional integration agenda
endorsed in January 2012 at the African Union Summit of
African Heads of State and Government in Addis Ababa,
under the theme of “Boosting Intra-African trade”(BIAT).






17Trade Facilitation from an African Perspective


3Trade Facilitation and Intermediate Products
The growing relevance of trade facilitation in today’s debate on trade regimes stems not only from the progressive reduction of other barriers to trade,
most notably tariffs, but more fundamentally from the
changes in international trade relations brought about by
globalization and the emergence of global value chains
over the last twenty years. Thanks mainly to the reduc-
tion of worldwide transport costs and the increasing
use of information and communication technologies,
transnational corporation have triggered a far-reaching
reorganization of production processes into distinct and
more specialized phases. By slicing up the production
processes, they have been able to better harness compara-
tive advantages by allocating across countries separate
production tasks along the value chains, thereby reaping
efficiency gains via an integrated production network.
The emergence of global value chains has thus paved the
way for a renewed global division of labor, modifying at
the same time the terms of countries’ integration into the
global market, with ensuing consequences for industri-
alization prospects.


In so far as the final product of any value chain embodies
value added produced in a number of different countries,
trade in intermediate products has become a key feature of
international production networks, and is often regarded
as a proxy to determine the depth of the latter. Hoekman
(2012), for example, estimates that intermediate inputs
account for about half of international trade, with an even


higher share for the Organisation for Economic Coopera-
tion and Development (OECD) economies, coming to 56
percent of goods trade and 73 percent of services trade over
the 1995-2005 period (OECD 2012). Similarly, Athukorala
(2010) calculates that the share of developing countries in
network exports rose from slightly over one-fifth in the
early 1990s to almost half in the mid-2000s, largely thanks
to the performance of East Asia, where the expansion of
regional production networks has been remarkable. This
in turn shows that, if global value chain may have intensi-
fied worldwide competition confining certain developing
countries to low-end activities, they have simultaneously
opened new opportunities for countries to diversify their
economies and climb up the product ladder.


In line with the above, the emergence of global value
chains has been accompanied by a renewed emphasis
on trade-related transaction costs and trade facilitation
issues. This is testified by a recent survey of 140 African
firms across 5 economic sectors: agro-food, information
and communication technologies, textiles and apparel,
tourism, and transport-logistics (ECA, 2013 and OECD
and WTO, 2013). According to questionnaire respondents
high transaction costs (due to customs procedures, delays,
costly documentation, etc.) and poor business and regu-
latory environment are cited amongst the most binding
constraints hampering the participation of African firms
to global value chains, along with access to finance, and
inadequate infrastructure provision. Interestingly, these




18 Trade Facilitation from an African Perspective


Trade Facilitation and Intermediate Products


issues are remarkably consistent with those highlighted
by the sectoral case studies undertaken by ECA on agro-
food industries in Cameroon, Cote d’Ivoire, Ghana, Kenya
and Nigeria, textiles and apparel industries in Egypt,
and extractive industries in Nigeria, Zambia and Ghana
(ECA et al., 2013).


Against this background, the present section aims at
taking stock of the extent of intermediates’ trade in Af-
rica, thereby shedding some light on one indirect chan-
nel through which trade facilitation could impact Af-
rica’s industrialization, as well as export prospects, by
facilitating access to intermediate inputs. Following the
standard literature, the data presented here are drawn
from COMTRADE database, and in order to maximize
country/time coverage they follow the classification of
the Harmonized System 1992. Intermediate inputs are
defined accordingly as the sum of 2049 product codes.8
Data are available for 41 African countries, and cover the
years 2001, 2006 and 2011.


Though starting from a rather low base, Africa’s imports of
intermediate inputs have witnessed a sharp increase over
the last decade, mounting from roughly US$ 31 billion
in 2001 to US$ 115 billion ten years later. Such a fourfold
increase is broadly in line with the expansion of total
merchandise imports, which has accompanied Africa’s
growth acceleration since the late-Nineties (Valensisi and
Davis, 2011). Indeed, the share of imported intermediates
in total merchandise imports has slightly fallen, from
27 percent in 2001, to 24 percent in 2006, and again in
2011. Regional averages hide, however, a huge variability
across countries. Most notably, as highlighted in Figure 9,
only six countries, namely Egypt, South Africa, Algeria,
Nigeria, Morocco, and Tunisia, account for roughly three
quarters of the continent’s total intermediate imports and
if anything their weight is slightly increasing (70 percent
in 2001, 71 percent in 2006 and 74 percent in 2011). As
shown in Figure 10, in the above countries intermediates
also tend to account for a relatively higher share of total
merchandise imports; hence, if economic size certainly


8 Refer to http://wits.worldbank.org/wits/data_details.html for
further details on the mapping of intermediate products on HS
1992 classification.


matters in explaining higher values of intermediate im-
ports, it is the structural composition of the economy that
really makes a difference.


Beyond the above large players, the value of imported
intermediates has increased rapidly also in other African
countries – like Ethiopia, Mozambique, Rwanda, Tanza-
nia, Uganda, and Zambia9 – albeit from a very low base.
Again, in the majority of these economies, the share of
intermediates in total merchandise imports has also been
on the rise (Figure 10), suggesting an incipient process
of economic diversification and insertion in global value
chains, especially in Eastern and Southern Africa. In the
remaining African countries, conversely, the value of
imported intermediates has typically increased at roughly
the same pace or even more slowly that total merchan-
dise trade, indicating that economic transformation has
been rather sluggish. This holds true especially in Central
(and to some extent Western) Africa where the share of
intermediates in total imports is often decreasing, and
typically lower than 25 percent.


Taken together, the above findings corroborates the view
that, even during the boom period, industrialization
had largely by-passed the African continent, with the
exception of Northern Africa and a few other countries
(ECA et al., 2013). They also suggest that the majority of
African countries have remained largely unable to con-
nect to global value chains, or confined to the low-end of
production networks as suppliers of raw material, whilst
only a few (mostly north-African) economies have intensi-
fied their exchanges of intermediate inputs to be further
transformed domestically.


From the regional integration perspective, international
production network can play a powerful role in fostering
the establishment of regional supply chains, as happened
notably in East and South-East Asia. To assess the extent
to which this process has taken place also in Africa, we


9 In all the above-mentioned countries imports of intermediate
inputs have growth by more than five times in the space of a dec-
ade. Judging on the basis of 2006 figures, Kenya also appeared to
import significant amounts of intermediate inputs; unfortunately
however, the corresponding 2011 figures are missing impeding a
more recent comparison.




19Trade Facilitation from an African Perspective


Trade Facilitation and Intermediate Products


now move to trade in intermediate inputs within the
continent. Over the last decade, intra-African trade in
intermediate inputs has grown roughly at the same pace
as total intra-African trade, touching a value of over US$
13 billion in 2011. In line with other estimates (Ofa and
Karingi 2013), the data analyzed here suggest that African


economies source, on average, some 12 percent of their im-
ported intermediates within the region. Such a heightened
reliance on imported inputs from outside Africa points
to the unavailability of suitable intermediates locally at
competitive prices, which in turn reflects the limited
degree of economic diversification.


Figure 9


Intermediates imports in Africa (USD million)


0 5000 10000 15000 20000


Egypt


South Africa


Algeria


Nigeria


Morocco


Tunisia


Zimbabwe


Ghana


Sudan


Ethiopia


Tanzania


Mozambique


Zambia


Uganda


Cote d'Ivoire


Cameroon


Mauritius


Botswana


Namibia


Senegal


Madagascar


Mali


Malawi


Burkina Faso


Niger


Rwanda


Togo


Mauritania


Burundi


Cape Verde


Gambia


Central African Rep.


Sao Tome & Principe


Benin


Comoros


Gabon


Guinea


Kenya


Lesotho


Seychelles


Swaziland


2001


2006


2011


Source: ECA calculation based on COMTRADE Database


Note: Missing 2011 observation for Benin, Comoros, Gabon, Guinea, Kenya, Lesotho, Seychelles and Swaziland,




20 Trade Facilitation from an African Perspective


Trade Facilitation and Intermediate Products


Once again, however, regional averaged hide considerable
variability across countries, as emerges quite clearly from
Figure 11. Interestingly, those economies that appeared to
be more integrated into global production networks and
received the lion’s share of Africa’s imported intermedi-
ates (Egypt, South Africa, Algeria, Nigeria, Morocco,
and Tunisia), turn out to source less than 5 percent of
these inputs from the region, and this share has remained
rather stable over the period considered. This could ar-
guably indicate that the intermediate inputs required by
these economies are too sophisticated to be conveniently
produced in other African economies. At the other end
of the spectrum, countries in Southern Africa appear to
import roughly 75 percent of their intermediates from
the regional market, plausibly thanks to the presence of
a well-diversified neighboring economy such as South
Africa, capable of supplying the required inputs. To a lesser
extent, also some countries such as Burundi, Rwanda,
Mali, Malawi, Mozambique and Uganda, appear to import
a fairly large share (approximately 40 percent) of their
intermediate from Africa itself. It is also worth noting
that in about two thirds of the African countries for which


data is available, the share of imported intermediates
originating from the African region has been declining
over the last 10 years, including in countries importing
fairly large amounts of intermediates, such as Cameroon,
Egypt, Ghana, Mozambique, Nigeria, Senegal, Tanzania,
Tunisia, Uganda, and Zambia.


Overall, Africa’s heightened reliance on imported inputs
from outside the region concurs with the evidence of in-
creasing export concentration on primary commodities
(Ofa, et al. 2012), and that of persistently limited weight
of intra-industry trade (Brulhart, 2008), pointing to the
low depth of regional and global production networks.
This is in striking contrast with the experience of East and
South-East Asia; yet some African economies are starting
to move. The fourfold expansion of intermediate imports
in the span of a decade suggests an incipient intensification
of economic linkages along the value chains, particularly
in the case of some fast-growing economies in East and
Southern Africa. Simultaneously, the more diversified
African countries, which account for the lion’s share of
Africa’s intermediate inputs, appear to source the bulk


Figure 10


Share of intermediates in total merchandise imports


0


10


20


30


40


50


60


70


80


Al
ge


ria


Be
ni


n


Bo
ts


w
an


a


Bu
rk


in
a


Fa
so


Bu
ru


nd
i


Ca
m


er
oo


n


Ca
pe


V
er


de


Ce
nt


ra
l A


fri
ca


n
Re


p.


Co
m


or
os


Co
te


d
'Iv


oi
re


Eg
yp


t


Et
hi


op
ia


G
ab


on


G
am


bi
a


G
ha


na


G
ui


ne
a


Ke
ny


a


Le
so


th
o


M
ad


ag
as


ca
r


M
al


aw
i


M
al


i


M
au


rit
an


ia


M
au


rit
iu


s


M
or


oc
co


M
oz


am
bi


qu
e


N
am


ib
ia


N
ig


er


N
ig


er
ia


Rw
an


da


Sa
o


To
m


e
&


Pr
in


ci
pe


Se
ne


ga
l


Se
yc


he
lle


s


So
ut


h
Af


ric
a


Su
da


n


Sw
az


ila
nd


Ta
nz


an
ia


To
go


Tu
ni


sia


U
ga


nd
a


Za
m


bi
a


Zi
m


ba
bw


e


2001 2006 2011


Source: ECA calculation based on COMTRADE Database




21Trade Facilitation from an African Perspective


Trade Facilitation and Intermediate Products


of their intermediates outside the continent, but then
play a major role in intra-African trade of agro-food and
manufactured products.


Against this backdrop, it is clear that Africa’s dispropor-
tionately high transaction costs hit not only consumers’


welfare, but also stem the opportunities resulting from
the emergence of global value chains and the associ-
ated subdivision of production processes. Notably, by
increasing the costs of intermediates and capital goods,
they also dampen the prospects for industrialization and
structural transformation, hindering value addition and


Figure 11


Share of intermediate imports sourced from Africa


0 20 40 60 80 100


Zimbabwe


Namibia


Botswana


Zambia


Burundi


Rwanda


Malawi


Mali


Niger


Mozambique


Burkina Faso


Uganda


Gambia


Central African Rep.


Tanzania


Madagascar


Mauritania


Ghana


Senegal


Mauritius


Cote d'Ivoire


Sudan


Cameroon


Ethiopia


Togo


South Africa


Algeria


Nigeria


Morocco


Egypt


Tunisia


Sao Tome & Principe


Cape Verde


Swaziland


Seychelles


Lesotho


Kenya


Guinea


Gabon


Comoros


Benin


2011


2006


2001


Source: ECA calculation based on COMTRADE Database


Note: Missing observations in 2006 for Lesotho, Togo, and Burkina Faso; and in 2011 for Benin, Comoros, Gabon, Guinea, Kenya, Lesotho, Seychelles
and Swaziland.




22 Trade Facilitation from an African Perspective


Trade Facilitation and Intermediate Products


perpetuating Africa’s long-standing concentration on
primary commodities exports. Moreover, in so far as some
of the imported inputs are further transformed domesti-
cally, and then re-exported along the value chain, steep
transaction costs also tax the competitiveness of African
exports. In this context, trade facilitation can definitely
play a role in reducing inefficiencies and cutting red tapes,
thereby facilitating the functioning of international pro-
duction networks, increasing the scope for African firms
to engage in new activities and climb up the value chains
(ECA et al., 2013). At the same time, African countries
should consider innovative industrial policies and other
interventions to remove supply-side constraint and speed
up the process of transformation.


In the context of Africa’s trade in intermediates, important
insights can be drawn from the analysis of the pattern
of use of imported and domestic intermediates by the
different sectors of the economy. Accordingly, the GTAP
database is used here to compute input-output coefficients
for five African regions (Northern, Western, Eastern,
Southern and Central Africa), and five sectors: agriculture,
food, energy and mining (NRGM), manufacturing and
services. Coefficients allow analyzing the intensity of
imported and domestic intermediates’ use in the produc-
tion process; that is the ratio of the respective quantities
of intermediate and factor inputs per unit of output.


The regional input-output coefficients are summarized in
(see Annex 2 Table 2), which reveals interesting patterns
of intensity in factors and intermediate inputs across
sectors. For example, consistently with the prevalence of
small-holder farmers engaged in nearly-subsistence pro-
duction, the agricultural sector tends to be are intensive
in unskilled labor in all regions except Southern Africa,
where the sector is capital intensive. Moving on to the
food sector, there seems to be a greater variety between
regions: whilst in Northern and Western Africa domestic
agricultural inputs are more intensively used, in Eastern
and Central Africa the sector is capital intensive; finally,
in Southern African the food sector deviates from the
other regions by being intensive in domestic services.
Again, with reference to the Energy and Mining sector
(NRGM), domestic services inputs appear to be criti-
cal in Eastern Africa, whilst capital is clearly the most


intensive factor in the four remaining regions. Across
all regions, the manufacturing and services sectors tend
to display relatively higher input output coefficients for
imported intermediates (especially for imported manu-
factured intermediates); services, however, are relatively
more intensive in domestic services inputs. Interestingly,
Northern Africa’s manufacturing sector appears to have
a particularly high input-output coefficient for manufac-
ture imported intermediates, consistently with the above
analysis based on COMTRADE data, which showed that
out of six African countries that together account for
three quarters of Africa’s total intermediate imports, four
belong to Northern Africa.


The above findings are also in line with the analysis carried
out by Ofa and Karingi, 2013, which shows that across all
regions, the services sector is the one utilizing the high-
est share of imported intermediate inputs for production
(52%). For Northern and Southern Africa, manufacturing
follows as the second largest sector. For the remaining
three regions, Energy and Mining constitute the second
largest sector in terms of utilising imported intermedi-
ate inputs. Across all regions, manufacturing imported
intermediates constitutes the largest share (60%) of total
imported intermediate inputs. Furthermore, findings
show that for three regions, Northern, Southern and
Western Africa, Energy and Mining follows as the second
largest commodity group. In Central and Eastern Africa,
services intermediates make out the second largest group
of imported intermediate inputs.


A noted in the 2013 Economic Report on Africa, resource-
based industrialization could yield positive benefits for
Africa, provided that the resource based industries foster
value addition and create backward and forward linkages
with the rest of the economy. In this respect, for resource-
rich African economies, imported intermediate inputs
in the oil and metal sector remain critical. However, if
Africa manages to remove barriers to regional trade,
broader regional markets could be a vital platform for
African producers to exploit economies of scale and har-
ness the scope for backward linkages, thereby producing
these inputs domestically. Likewise, soft- commodity
processing (cocoa, coffee, tea and agro-products) offer
great potential for value addition and commodity based




23Trade Facilitation from an African Perspective


Trade Facilitation and Intermediate Products


industrialization for Africa. The ERA 2013 presents five
case studies on soft commodity processing in Africa. A
number of factors affecting value addition of production
were identified, and across all case studies, high import
tariffs on intermediate inputs were found to be a critical
constraint for firms entering Global Value Chains.


A few key highlights from the case studies shed some
light on the importance of imported intermediate inputs
to higher value production for African manufactures. In
Ethiopia’s coffee industry, access to intermediate inputs
was found to be a main constraint. Findings from Nigeria’s
cocoa processing industry showed that out of thirteen
factors affecting linkage development, availability and
quality of imports were found to be of critical importance.
The same constraints were found in the cocoa processing
industry of Cameroon. The overall message from the case
studies was that forward integration into intermediate
and final stages of the Global Value Chain is starting
to take place in some African countries such as Nigeria
and Ghana, while other economies are lagging behind.
Again, the leather industry in Ethiopia is an example of
an industry that has been able move up the value chain.
The sector is one of eight priority sectors set out in the
government’s five year development plan. In 2002, the
Ethiopian government started restricting exports of low
value leather products, notably through an export tax of
150 per cent on hide exports. This measure had a signifi-
cant impact on the value added composition of exports
in the sector. In 2011, approximately 90% of total leather/


hide exports in Ethiopia were processed leather products.
Also, in Ethiopia leather suppliers found quality and
availability of intermediate inputs to be main barriers to
the linkage development of the industry.


Findings from a 2013, WTO –OECD survey, covering
over 500 supplier firms in developing countries and 173
lead firms, supports the above argument (ECA, 2013).
Sector- specific constraints in moving up the value chain
were identified in the survey. For the agri-food sector,
limited access to production inputs was found to be a
main constraint. Meanwhile in the textile and apparel
industry (covering 15 developing country suppliers), cus-
toms paperwork delays was found to be the second most
critical constraint to entering, establishing or moving up
the value chains of the industry.


Overall, the above discussion highlights the importance
of imported intermediate inputs for the diversification
of production processes into higher value sectors, in
particular in the services, manufacturing and energy/
mining sectors. In this respect, the possibility to source
intermediate inputs at competitive prices is undoubtedly
critical to African producers, particularly for those sec-
tors displaying the highest intensity in imported inputs,
namely manufacturing and services. Trade facilitation
is therefore relevant to the discussion on Africa’s trans-
formation, particularly in the context of the continent’s
regional integration agenda.






25Trade Facilitation from an African Perspective


4Trade Facilitation Instruments: WTO Provisions and African Realities
4.1. Background


The objective of this section is to compare the trade facilitation instruments covered in the proposed text of the World Trade Organization with the
ongoing activities in Africa at the national, sub-regional
and regional levels, thereby identifying existing gaps
and assessing the overall consistency of the multilateral
framework with the activities on the ground. It is envis-
aged that the critical analysis undertaken in the section
will shed some light on the scope of the challenges that
African countries would confront in complying with the
World Trade Organisation provisions, if they are adopted
in their current form. In essence, the section seeks to
answer the following questions:


• To what extent are the World Trade Organisation
provisions: (i) consistent with national, sub-regional
and regional trade facilitation objectives in Africa?
(ii) aligned with ongoing trade facilitation activities/
measures/instrument on the continent? and


• To what extent do African countries and Regional
Economic Communities have the capacity (financial
and technical) to implement the proposed World
Trade Organisation provisions?


The assessment made in this section is purely technical,
and does not take into consideration other dimensions of


the negotiations, such as tactics and geopolitics. It should
be noted that one key constraint of the present analysis
is the lack of systematic and comprehensive records of
all trade facilitation activities implemented in the con-
tinent. In light of this, the examples used here are not
exhaustive and are based mainly on presentations made
by Regional Economic Communities (RECs) (particularly
East African Community; Common Market for Eastern
and Southern Africa; and Southern African Develop-
ment Community) and African countries (particularly
Kenya, Uganda, Zimbabwe, Cameroon, Mauritius, Ghana,
Senegal, Tunisia) and interviews with their officials at
various forums as well as in-depth studies of selected
RECs and corridor management organisations10. A more
comprehensive study, involving all African countries and
Regional Economic Communities will, certainly, reveal
more trade facilitation efforts and success stories as well
as challenges. Notwithstanding of these limitations, it is


10 African 10-Year review of the Almaty Programme of Action (15-
18 July, 2013, Addis Ababa, Ethiopia), 1st AUC/WCO Seminar on
the Revised Kyoto Convention (19-21 June 2013, Nairobi, Kenya)
; 1st AUC Workshop on Integrated Border Management (July
2013, Harare, Zimbabwe), 5th Ordinary Meeting of the AU Sub-
Committee of Directors General of Customs (9-13 September 2013,
Cotonou, Benin). The RECs and countries from which examples
are drawn are those with well-documented practices and /or those
that are recognised to have best practices in selected aspects of
trade facilitation.




26 Trade Facilitation from an African Perspective


Trade Facilitation Instruments: WTO Provisions and African Realities


envisaged that this section will assist African negotiators
and policy makers in identifying areas to channel capacity
building efforts in the context of the World Trade Organi-
sation negotiations on trade facilitation. Specifically, the
section examines relevant existing: (i) national rules and
regulation; (ii) trade facilitation measures of Regional
Economic Communities; and (iii) multilateral conven-
tions – especially those ratified by African countries that
address the proposed World Trade Organisation articles,
which are listed below.


Article 1: Publication and Availability of Information


Article 2: Prior Publication and Consultation


Article 3: Advanced Ruling


Article 4: Appeal or Review Procedures


Article 5: Other Measures to Enhance Impartiality, Non-
Discrimination and Transparency


Article 6: Disciplines on Fees and Charges Imposed on or
in Connection with Importation and Exportation


Article 7: Release and Clearance of Goods


Article 8: Consularisation


Article 9: Border Agency Cooperation


Article 9 BIS: (Declaration of transshipped or in transit
goods) (domestic transit)


Article 10: Formalities Connected with Importation and
Exportation and Transit


Article 11: Freedom of Transit


Article 12: Customs Cooperation


Article 13: Institutional Arrangements


Article 14: National Committee on Trade Facilitation


Article 15: Preamble/Cross-cutting Matters


There is ample evidence that African countries and Re-
gional Economic Communities (RECs), to a varying de-
gree, are already implementing some trade facilitation
measures aligned to those of the proposed articles. For
instance, most of the RECs are implementing several
initiatives, in the areas of: (i) customs (regional customs
guarantee schemes, harmonized customs documents, cus-
toms information sharing, interconnectivity of customs
systems, introduction of Single Customs Territory, and
Authorised Economic Operators - AEOs); (ii) integrated/
coordinated border management (One Stop Border Posts
– OSBPs, harmonization and extension of working hours);
(iii) transit transport (harmonized road transit charges,
Carrier’s License Schemes, Third Party insurance schemes,
harmonized axle load limits); and (iv) information tech-
nology (national and regional Single Windows, regional
cargo tracking), among others.


The rest of this section discusses, in detail, ongoing ac-
tivities of member States and Regional Economic Com-
munities related to the proposed articles in the World
Trade Organisation draft consolidated negotiating text.


4.2. Tracking Activities Related to Articles 1-6


The key elements of Articles 1-6 include: publication and
availability of information (publication, information avail-
able through internet, enquiry points, notification); prior
publication and consultation (interval between publication
and entry into force, opportunity to comment on new and
amended rules, consultations); advanced ruling; appeal


or review procedures (right to appeal or review, appeal
mechanism); other measures to enhance impartiality,
non-discrimination and transparency (notification for
enhanced controls or inspections, detention, test proce-
dures); and disciplines on fees and charges imposed on or




27Trade Facilitation from an African Perspective


Trade Facilitation Instruments: WTO Provisions and African Realities


in connection with importation and exportation (general
and specific disciplines).


Generally, existing literature as well as presentations and
discussions of Regional Economic Communities and
their member States on trade facilitation tend to place
less emphasis on their activities and initiatives related
to the proposed Articles 1-6 and more on Articles 7-14.
The East African Community makes an effort to track
ongoing measures taken by the Community related to
all the proposed articles of the World Trade Organisation
trade facilitation negotiating text, as illustrated by table
3. The table is limited to Articles 1-6 as the East African
Community activities related to the other articles are
discussed in section 4.3.


It can be seen from the table 3 that relevant trade-related
documents are available on the websites of the East Af-
rican Community (EAC) and its member States, and are
also published in the EAC Gazette. Useful information is
contained in the EAC Customs Management Act, which is
being amended to include provisions on advance ruling.
The Customs Management Act addresses issues related
to appeals, which can be brought to the Tax Appeals
Tribunal at the national level and the East African Court
of Justice at the regional level. The East African Commu-
nity Customs Regulations deal with the harmonization
of fees and charges. It is therefore clear that EAC, and
indeed other Regional Economic Communities, have
the institutional framework to address Articles 1-6 of the
proposed negotiating text. Yet, a more elaborate study is
required to determine the efficiency and effectiveness in
the application of existing rules and regulations.


4.3. Tracking Activities Related to Articles 7-14


Article 7: Release and Clearance of Goods


This article addresses issues related to pre-arrival process-
ing; electronic payment, separation of release from final
determination of customs duties, taxes, fees and charges;
risk management; post-clearance audit; establishment
and publication of average release times; trade facilitation
measures for (Authorised Operators); expedited ship-
ments; and perishable goods.


African countries have made significant progress in many
of these areas. For instance, in the area of electronic pay-
ment, Zimbabwe Revenue Authority (Zimra) has intro-
duced an E-Payment (E-Banking) facility for the con-
venience of its clients whereby funds can be electronically
transferred into Zimra’s bank account and will automati-
cally appear in the clients account within the Automated
System for Customs Data (ASYCUDA). In terms of risk
management, the use of non-intrusive systems, notably


Table 3: Proposed WTO Trade Facilitation Provisions and Related EAC Measures


Article EAC Measures


Article 1: Publication and Availability of
Information


• Treaty, protocols and laws (e.g. East African Customs Management Act), tariff; etc. are available
• Documents on EAC and member States websites as well as EAC Gazette


Article 2: Prior Publication and
Consultation


• Publications on EAC and member States websites
• Minimum information: tariff; Rules of Origin, valuation
• Inquiry points


Article 3: Advanced Ruling • No advance ruling in the Customs Management Act (CMA)
• CMA being amended to include provisions on advance rulings


Article 4: Appeal or Review Procedures


Article 5: Other Measures to Enhance
Impartiality, Non-Discrimination and
Transparency


• CMA Part XX: Appeals (Art. 229 to 231)
• National: application for review by the Commissioner; appeals to Tax Appeals Tribunal
• Regional: East African Court of Justice


Article 6: Disciplines on Fees and
Charges Imposed on or in Connection
with Importation and Exportation


• Fees and charges harmonized (Art. 75 and 82 of EAC Customs Regulations)
• Bonded warehouse fee: USD1500 (Art. 75)
• Government warehouses fee: USD0.3 per cubic meter (Art. 82)


Source: Munyampundu (2013). EAC presentation at 1st AU Technical Workshop on Integrated Border Management, Harare, Zimbabwe.




28 Trade Facilitation from an African Perspective


Trade Facilitation Instruments: WTO Provisions and African Realities


scanners is becoming a common practice in Cameroon,
Nigeria, and Zambia, among others. In conformance
with World Customs Organisation’s SAFE Framework
of Standards to secure and facilitate global trade, Zim-
babwe has introduced mobile, palletized, re-located and/
or baggage scanners at the major ports of entry into the
country - Forbes, Beitbridge, Plumtree, and Chirundu
border posts, as well as Harare international airport.


Risk management practices in African countries are also
being modernized and have generally improved over
time. This is illustrated by the following statistics on
the proportion of cargo subjected to different degrees of
customs scrutiny in Uganda, based on the risk manage-
ment system in ASYCUDA World which has 4 lanes or
categories of clearance11:


Lane 2010-2011 2011-2012


Green 14% 9%


Blue 52% 20%


Yellow 17% 34%


Red 17% 37%


100% 100%


For the case of Zimbabwe, low risk cargo is now passed
with minimal formalities at entry ports and later targeted
for post clearance inland audit. All major customs houses
in the country also have post clearance audit teams.


There are also indications that African countries have
started to establish and publish average release times
of goods at their ports. As a result of surveys conducted
with the support of the East African Community and the
World Customs Organisation, Uganda has available data
on average release times at its major customs stations.
The release time in Malaba was reduced from 54 hours
in 2008 to 21 in 2013; while that of Kampala was reduced
from 139 to 72 hours in the same period.


11 Green is for very low risk cargo which is passed without scrutiny;
Blue is for low risk cargo which is passed with minimal formalities
and undergoes audits at a later stage inland; Yellow is for medium
risk cargo that is targeted for documentary check; and Red is for
high risk cargo that is targeted for inspection..


Uganda has also introduced a facility for Authorised Eco-
nomic Operators. Zimbabwe Revenue Authority (Zimra)
adopted a simililar initiative in September 2011, and has
set up a working group in that regard, headed by a Sen-
ior Customs Manager. The working group has produced
guidelines, questionnaires and the necessary application
forms for the selection of eligible applicants. It has also
drafted the required legislation which is awaiting approval
by the Ministry of Finance. This example provides useful
insights into the Authorised Economic Operators (AEO)
implementation process.


At the regional level, the Common Market for Eastern and
Southern Africa (COMESA) Clearing House introduced
the Regional Payment and Settlement System (REPSS),
which allows member States to transfer funds with speed
and efficiency and at reduced cost within COMESA. Un-
der REPSS, importers and exporters deal with their local
commercial banks for trade documentation. The im-
porter’s payment to the exporter is channeled through
the Central Bank of the importer to the Central Bank
of the exporter using the REPSS platform. The Regional
Payment and Settlement System became operational in
2012 and registered its first transaction between Bramer
Bank of Mauritius and Fina Bank of Rwanda, through
their respective Central Banks.


Article 9: Border Agency Cooperation


The essence of this article is for members to ensure that
their authorities and agencies responsible for border con-
trols and procedures dealing with importation, exporta-
tion and transit of goods cooperate with one another and
coordinate their activities in order to facilitate trade. It is
also about cooperation on mutually agreed terms of mem-
bers sharing common borders with a view to coordinating
procedures at border crossings to facilitate cross-border
trade. The draft World Trade Organisation text indicates
that such cooperation and coordination may include: (i)
alignment of working days and hours; (ii) alignment of
procedures and formalities; (iii) development and sharing
of common facilities; (iv) joint controls; and (v) establish-
ment of One Stop Border Posts (OSBPs).




29Trade Facilitation from an African Perspective


Trade Facilitation Instruments: WTO Provisions and African Realities


African countries with the support of Regional Economic
Communities and development partners are already in-
volved in activities to foster cooperation among border
agencies. Indeed, the concept of Integrated Border Man-
agement or Coordinated Border Management is gaining
grounds on the continent, and One Stop Border Posts are
increasingly at the core of border agency cooperation. The
Chirundu OSBP at the border crossing between Zambia
and Zimbabwe is widely cited as a best practice. Prio to
the OSBP at Chirundu, procedures duplicated on each
side of the border and involving up to 15 government
agencies often resulted in a waiting time of 2-3 days to
clear goods. The delays were estimated to cost each truck
US$140 per day in fixed costs and driver’s time. The po-
tential cost savings as a result of the introduction of the
OSBP is estimated at US$486 million per year, which
accrues to the economies of the region (World Bank,
2011). Overall, clearance times for buses and passenger
vehicles at Chirundu OSBP have been reduced. Clearance
turnaround of commercial cargo has also been reduced
quite dramatically. As a result of the OSBP, there is now
greater sharing of information; coordination of clearance;
and sharing of equipment and infrastructure between
border agencies from both countries – all in line with the
proposed World Trade Organisation Article 9 on Border
Agency Cooperation.


There are ongoing efforts to establish other One Stop
Border Posts in Southern Africa. For instance, a Memo-
randum of Intent has been signed between Mozambique
and Zimbabwean Customs Administrations with the view
to establishing OSBPs at Nyamapanda/Cuchamano and
Forbes/Machipanda border locations. South Africa and
Zimbabwe are also currently in negotiations to improve
operations at the Beitbridge border post and eventually
create a OSBP between the two countries. South Africa
is a step forward and has established a Border Control
Operational Coordinating Committee, involving the
South African Revenue Service, National Intelligence,
Department of Home Affairs, Environment and Trans-
port, Public Works, Agriculture, Health, Defence, and
South African Police Service.


Just like Southern Africa, the other sub-regions of the
continent are also experimenting with One Stop Border


Posts, although with varying degrees of success. In Eastern
Africa, for example, the East African Community has
passed a bill on OSBPs, indicating the importance at-
tached to the concept in the sub-region. Currently, there
are OSBPs involving: Kenya and Uganda; Tanzania and
Uganda; Rwanda and Uganda; and Sudan and Uganda.
The concept of OSBP is being complemented in Eastern
Africa with the introduction of the practice of customs
clearance at first port of entry – for instance, at the port
of Mombasa in Kenya for goods destined for Uganda and
Rwanda. In 2012, the East African Community adopted
in principle the destination model of clearance of goods
where assessment and collection of revenue is at the first
point of entry (Mombasa and Dar es Salaam) and revenues
are remitted to the destination partner States subject to
the fulfillment of key pre-conditions to be developed by
a High Level Task Force (this is often referred to as the
Single Customs Territory). The harmonization and exten-
sion of working hours (Kenya, Rwanda) and introduction
of inland customs operations are also practices that are
worth mentioning.


The concept of One Stop Border Posts is also being tested
in West Africa, an example being the Cinkase OSBP be-
tween Burkina Faso and Ghana. At the level of Regional
Economic Communities, the Southern Africa Develop-
ment Community has developed guidelines for Coordi-
nated Border Management, which was approved by its
member States in 2012 as a tool to facilitate trade and
consolidate the Free Trade Area (FTA) in the sub-region.
In West Africa, the West African Economic and Monetary
Union (UEMOA) took the lead in the establishment of
OSPBs (commonly referred to as joint border posts in
the sub-region) although the Economic Community of
West African States (ECOWAS) is now fully involved. The
creation of joint border posts is contained in UEMOA
resolution 04/97/CM/UEMOA that adopted an action
plan for transport infrastructure. Resolution 08/2001/
CM was adopted in November 2001 for the funding of
the construction of 11 joint border posts, on the basis of
the action plan – including the Cinkase OSBP already
mentioned. The first two joint border posts were to be
developed through internal resources of the Union as
pilot, and extended in a second phase to other borders
(ECOWAS, EU and UEMOA, 2008).




30 Trade Facilitation from an African Perspective


Trade Facilitation Instruments: WTO Provisions and African Realities


Overall, African countries are fully aware of the require-
ments for effective and efficient coordinated border man-
agement, and in September 2013, the Directors General of
Customs on the continent, at their 5th Ordinary Meeting,
recommended the African Union Commission, Regional
Economic Communities, and their technical partners to
develop a continental policy framework on Coordinated
Border Management to be adopted by the policy organs
of the African Union.


Article 10: Formalities Connected with Im-
portation and Exportation and Transit


The main issues covered by this article include: formalities
and documentation requirements; acceptance of cop-
ies; Single Window; pre-shipment (and post-shipment
inspections); use of Customs Brokers; common border
procedures and uniform documentation requirements;
rejected goods; and temporary admission of goods/inward
and outward processing.


African countries are generally improving their efficiency
in relationship to the formalities connected with impor-
tation, exportation, and transit, and ongoing activities
on the continent span across most of the above issues.
Rwanda and Burkina Faso, for example, have improved
their trade logistics environment by reducing the number
of documents required for international trade. Indeed,
figure 4 showed that 11 African countries reduced the
number of documents required for import and export
between 2007 and 2013. Rwanda has also made efforts to
implement electronic submission of customs declarations
and increase acceptance points for submission. Similarly,
several countries on the continent, including Egypt, Swa-
ziland, Tunisia, and Zambia have introduced or improved
their electronic data interchange systems (World Bank,
2011). In this regard, the Revenue Authorities Digital Data
Exchange Programme (RADDEX) is widely cited as a suc-
cessful system for customs interconnectivity among East
African Community member States. The introduction of
electronic data interchange systems has been associated
with reduction of trade delays on the continent, includ-
ing in countries such as Madagascar, Mali, Tunisia, and
Uganda.


Electronic cargo management is also becoming a com-
mon practice on the continent, including the use of cargo
tracking systems, and electronic management of custom
warehouse – for instance through an online auction pro-
cess, such as in Uganda. In addition to its existing Single
Window System, Mauritius is in the process of deploying
a Port Community System (Cargo Community System), to
further improve competitiveness, efficiency and effective-
ness of the supply chain of the country by providing new
processes and information to all stakeholders on a single
platform. The system is also expected to reconcile security
imperatives and trade facilitation through provision of
advanced cargo information.


Single-window
Single Windows are being introduced across Africa, spear-
headed mostly by national revenue authorities. Examples
of African countries that have effective Single Window
systems include Senegal (Customs Computer System -
GAINDE 2000), Ghana (Ghana Community Network
Services Ltd. - GCNet), Tunisia (Tunisia TradeNet), Cam-
eroon (GUCE), and Mauritius, among others. Single Win-
dow systems are under construction in Kenya, Burkina
Faso, Libya, Morocco and the Republic of Congo. Mali
and Cote d’Ivoire are also developing Single Window
Systems. Countries such as Rwanda and Uganda have also
launched Single Window projects. The cost and complex-
ity of setting a Single Window system may explain why
some African countries are lagging behind. The benefits,
though, are known to far outweigh the costs. Ghana, for
instance, saw customs revenue grow by 49% after intro-
ducing GCNet, its electronic data interchange system for
customs procedures. Ghana, Madagascar, Mauritius are
all using adapted versions of TradeNet (the national Single
Windows of Singapore – established in 1989).


Countries that are yet to have operational Single Windows
are stepping up efforts to do so. For example, the Zimba-
bwe Revenue Authority is currently at an advanced stage
in the implementation of a Single Window environment
at its major ports of entry, with Beitbridge border post set
to be the pilot port at which the concept will be launched.
The Automated System for Customs Data (ASYCUDA)
World version 4.2.0 which is due to be implemented in the
country has a platform which allows for the introduction




31Trade Facilitation from an African Perspective


Trade Facilitation Instruments: WTO Provisions and African Realities


of the Single Window environment. The ASYCUDA sys-
tem has a provision for controlled or selected access by
other border agencies, which will permit these agencies
to access data pertaining to their mandated area. It is
worth noting that Zimbabwe is using local expertise to
develop its Single Window, underscoring the availability
of expertise within Africa that could be harnessed locally
or across the continent. It is equally significant to note that
the Kenyan Single Window system was developed with the
support of Senegalese expertise. The lesson, therefore, to
be highlighted is that African countries need to recognize
and fully harness the available expertise on the continent.


Uganda is another African country that is using infor-
mation technology in its custom processes and tax ad-
ministration. It migrated from the use of ASYCUDA +
to ASYCUDA ++ and now to ASYCUDA World, which
allows access by other stakeholders (Single Window),
declarations to be made from around the world, and
electronic client feedback.


At the sub-regional level, sixteen out of the nineteen
member States of the Common Market for Eastern and
Southern Africa (COMESA) use the ASYCUDA system.
COMESA is engaging the customs administrations in its
region to upgrade to ASYCUDA World and to consider in-
terconnecting their systems. The East African Community
on its part is involved in a regional Single-Window project.


There is an ongoing debate on the merits and demerits
of each country developing its own national customs au-
tomation system/Single Window as apposed to adopting
the regional approach - which is already on the agenda of
some Regional Economic Communities. In this regard,
many experts on the continent argue that the national
approach may eventually constitute a constraint to the
realization of the Continental Free Trade Area (CFTA).
The alternative argument is that countries have different
requirements and therefore each system should respond
to the specificities of concerned countries rather than
developing a harmonized system. Proponents of this view
further argue that technology is available to interconnect
systems thus overcoming the challenge of exchanging
information between countries that use different systems.


Advocacy for the interconnection of computerized cus-
toms information systems in Africa is championed at
the highest level of customs administration on the con-
tinent. In September 2013, African Directors General
of Customs, at their 5th Ordinary Meeting in Cotonou,
Benin, recommended African Union Trade Ministers to
endorse the Road Map and Strategy for the continental
interconnectivity of computerized customs information
systems in Africa. They also encouraged member States
to put in place the necessary legal framework and other
arrangements for interconnection of their computerized
customs information systems. They further recommended
that the feasibility of a common Single Window system
in Africa that would take into consideration the World
Customs Organisation Single Window Compendium and
best practices from countries should be explored.


COMESA Virtual Trade Facilitation System
(CVTFS)
The Common Market for Eastern and Southern Africa
(COMESA), in 2012, launched a Virtual Trade Facilitation
System (CVTFS) as a pilot project on the Djibouti-Addis
Ababa-Khartum and Juba Corridors. The system tracks
cargo and means of transport, especially trucks, in real
time. It provides visibility of cargo at remote locations to
customs, insurance companies, freight forwarders and
transport operators. It is envisaged that the system will
be rolled roll out in other corridors in the sub-region.


COMESA is also in the process of moving away from the
manual certificates of origin to the electronic certificate
of origin. It has also introduced a Passenger and Cargo
Manifest System (PCMS) which presents an opportunity
for member States to capture data that would otherwise
be lost from informal cross border trade. The system al-
lows for data to be captured at the port of departure for
onward transmission to the borders, and is under pilot
in Zambia and Zimbabwe.


The African Alliance for Electronic Commerce
The African Alliance for Electronic Commerce (AAEC)
was officially launched in Addis Ababa in March 2009
as a network of African organisations operating Single
Windows or electronic platforms for interactions between
stakeholders of international trade. It was created with the




32 Trade Facilitation from an African Perspective


Trade Facilitation Instruments: WTO Provisions and African Realities


support of the African Trade Policy Centre (ATPC) of the
Economic Commission for Africa – a project supported by
the Canadian International Development Agency (CIDA).
The objectives of AAEC, among others, are to: set up a
framework for exchange of Single Window experiences
in Africa; establish a mechanism to assist countries in the
development of Single Windows; put in place a platform
of resources for facilitating the establishment of regional
Single Windows and improving existing projects; en-
sure Africa’s representation in international forums and
contribute to the development of the concept of Single
Window at global level; and promote regional and inter-
regional Single Windows in Africa. AAEC is currently
developing a Guide for Single Window implementation
in Africa.


Article 11: Freedom of Transit


All major development frameworks in Africa, past and
present, including the Lagos Plan of Action, the Abuja
Treaty establishing the African Economic Community,
the Constitutive Act of the African Union, and the New
Partnership for Africa’s development; as well as the treaties
establishing the Regional Economic Communities allude
in one way or another to the importance of transport
and trade facilitation (especially transit transport for


landlocked countries) to the continent’s development.
Tables 4 and 5 summarise the main international and
regional conventions on international transit of goods to
which African countries are parties. Although a number
of countries on the continent have signed and in some
cases ratified international conventions, they generally
prefer to operate at the regional and sub-regional levels,
and sometimes on bilateral basis. Interestingly, most of
the legal instruments developed by Regional Economic
Communities are based on relevant international conven-
tions – including those to which many of their member
States are not parties.


Given the dominance of road transport in Africa, the fun-
damental elements of transit transport on the continent
mostly concern this mode of transport. The key policy
issues in this regard are developed and implemented
at the Regional Economic Community (REC) level as
summarized in Table 6. It can be seen from the table that
RECs trade facilitation instruments such as those on:
vehicle load and dimensions control; Carrier License and
Transit Plates; and Third Party Motor Vehicle Insurance
Schemes are beyond the scope of the World Trade Organi-
sation (WTO) provisions. Indeed, WTO negotiations are
limited to the simplification of trade procedures and do
not address key transport issues, such as the quality of


Table 4: African Participation in International Treaties and Conventions on Transit Transport


Treaty/Convention Year Adopted African (Excluding North Africa) Parties


Barcelona Convention on Freedom of Transit 1921 Burundi, Chad


General Agreement on Tariffs and Trade – GATT/WTO 1947/1995 Sub-Sahara Africa, except Ethiopia, Eritrea, Equatorial Guinea,
Guinea Bissau, S&P


New York Convention on Transit Trade of Landlocked
Countries


1965 BF, Burundi, Cameroon, CAR, Chad, Lesotho, Malawi, Mali, Ni-
ger, Nigeria, Rwanda, Senegal, Sudan, Swaziland, Uganda, Zambia


Brussels Convention Establishing a Customs Coopera-
tive Council.


1950


Kyoto Convention on Simplification and Harmoniza-
tion of Customs Procedures.


1973 Total of 25 countries (in the entire Africa) are parties to the Re-
vised Kyoto Convention


Customs Convention on the International Transport of
Goods Under Cover of TIR Carnets; also called the TIR
Convention.


1975


Nairobi Convention on Mutual Administrative Assis-
tance for the Prevention, Investigation and Repression
of Customs Offences.


1977 Malawi, Niger, Swaziland, Uganda, Zambia, Zimbabwe (6 LLDCs);
CI, Kenya, Mauritius, Nigeria, Senegal, South Africa, Togo (7
costal).


Geneva Convention on Harmonization of Frontier
Control of Goods.


1982 South Africa, Lesotho, Liberia (3)


Montego Bay Convention on Landlocked Countries. 1982 Landlocked Countries (15); SSA Coastal Countries (27)


Almaty Programme of Action. 2003 Landlocked Countries (16); SSA Coastal Countries (27)


Source: Compiled by ECA from various sources




33Trade Facilitation from an African Perspective


Trade Facilitation Instruments: WTO Provisions and African Realities


Table 5: Summary of International and Regional Conventions on Transit Guarantees


Objective Facilitate transit and establish harmonized regional transit guarantees


International Legal
Instrument


TIR Convention; Goods should travel in secure vehicles or containers; Duties and taxes at risk should be covered
throughout the journey by a regionally recognized guarantee; Goods should be accompanied by a regionally ac-
cepted Carnet taken into use in the country of departure and accepted in the countries of transit and destination;
Customs control measures taken in the country of departure should be accepted by the countries of transit and
destination.


RECs Instrument Key Elements Evaluation/Challenges


ECOWAS 1982 Convention A/P
4/5/1982 Inter-State
Transit Convention
(Lomé)


Inter-state Road Transit
Guarantee Scheme
(ISRT)


The Inter State Road Transit
(ISRT) Convention prescribed that
goods being transported within
ECOWAS be covered by a declara-
tion document, otherwise known
as the ISRT logbook. The logbook
is the standard document which,
however, Member States may have
other mandatory documentary
requirements. Article 18 sug-
gests that not all cargo should be
inspected, except for those which
may be classified as suspect and
“give rise to foul play.”


Embraces the TIR Convention system, however,
its application in the region is faulty.


A supplementary Convention was adopted speci-
fying that security for payment dues was to be
provided by a guarantee from reputable financial
institutions.


Directive C/DIR3/12/88 was also put in place to
accelerate the setting up of a single guarantee
system for transit goods


A/SP1/5/90 also addressed the “urgent necessity”
to set up a mechanism for ISRT consisting of a
chain of national bodies responsible for the guar-
antee, each designated by each Member State.


Some countries such as Burkina Faso and Mali
designated their Chambers of Commerce as
national guarantees in response to the Directive,
however, since other countries did not follow suit,
a regional guarantee was still not achieved.


The single document portion of the ISRT conven-
tion has been achieved; however, the region still
lacks a regionally accepted guarantee.


CEMAC 2010 CEMAC Regula-
tion No. 07/10-UEAC-
205-CM-21 establishing
regulation on legal
regime of community
transit and mechanism
of a single security or
guarantee


This instrument seeks to facilitate
transit within CEMAC states
by providing a mechanism for
guarantees to secure payment of
debt that may arise during transit.
It outlines the rights and obliga-
tions of parties and steps to be
taken to constitute a guarantee.
The CEMAC guarantee covers all
goods transiting throughout the
region with a final destination
outside CEMAC.


The CEMAC attempt at regional guarantees has
not been successful till date.


COMESA COMESA Treaty (An-
nex 3)


RCTG Agreement (Rati-
fied by 10 Member States)


Inter-Surety Agreement
(Agreement entered into
among the National
Sureties participating in
the Scheme)


PTA Road Customs
Transit Declaration
Document (RCTD) and
RCTG


Separates the customs declaration
procedures from customs bond or
guarantees.


RCTG - Participating states set
up national sureties which are
regionally bound by signing Inter-
surety agreements. The Council of
Sureties manages the Scheme and
an Insurance Pool underwrites
the operations of the RCTG. The
RCTG is acquitted in the National
IT systems.


Goods transit under Customs Trade Regime
while vehicles transit under the COMESA Carrier
License.


Both the Regional Customs Transit Document
(RCTD) and the Regional Customs Transit Guar-
antee (RCTG) are functional in COMESA.


Most of its success can be attributed to the RCTG
system being handed over to the private insur-
ance industry, as in the case of Third Party Motor
Vehicle Insurance in COMESA.


Burundi, Kenya, Rwanda and Uganda are partici-
pating sureties, while Djibouti, Ethiopia and DRC
have shown interest.


SADC Goods in Transit
Guarantee


SADC operates transit bonds which are national
transit guarantees.


Source: Compiled by ECA from various sources




34 Trade Facilitation from an African Perspective


Trade Facilitation Instruments: WTO Provisions and African Realities


infrastructure, that account for an average of 40 per cent
of trade costs in Africa. Details on African regional and
sub-regional treaties and conventions on transit transport
are provided in Annex 3 (Tables 9, 10 and 11)


Some progress has been made in the implementation
of Regional Economic Communities (COMESA) trade
facilitation measures. The Common Market for Eastern
and Southern Africa, for example, has reported progress in
its Regional Customs Transit Guarantee (RCTG) scheme.
In this regard, the scheme has been implemented in the
Northern Corridor countries of Kenya, Rwanda and
Uganda and preparations are at an advanced stage to
commence operations of the scheme in the Djibouti-
Ethiopia-Sudan Corridor. Progress has also been made by
Revenue Authorities in COMESA countries on modalities
of integrating the Regional Customs Transit Guarantee
system with their customs information technology system


(ASYCUDA World) which would enhance information
exchange as well as streamlining bond acquittal.


Transit is free, in principle, in the East African Com-
munity (EAC) among member States in line with Article
85-87 of the EAC Customs Management Art and Article
104 of Customs Management Regulations. EAC also has
a regional cargo tracking system. Bond management,
though, remains a challenge.


TIR Convention
The 1975 Geneva Customs Convention on the Interna-
tional Transport of Goods under the cover of TIR Carnets
(TIR Convention) is one of the international conventions
that seek to address most of the challenges associated with
transit transport. However, few African countries, with
the exception of those in North Africa, have signed or
ratified it, although the convention has served as a basis


Table 6: Status of Implementation of Key Transit Transport Issues by Region


Issue for Harmonization East Africa
EAC
COMESA


Southern Africa
SADC


Central Africa
ECCAS
CEMAC


West Africa
ECOWAS
UEMOA


Vehicle Load and Dimensions Control
(Axle load and Gross Vehicle Mass
limits)


Yes.
Axle Load
GVM
Weighbridges
installed


Yes.
Axle Load
GVM
Weighbridges installed


Yes – Inter-State Road
Transport (TIE).
Axle Load
GVM


Road Transit Charges Harmonized with
SADC


Harmonized with
COMESA and EAC


Carrier License and Transit Plates


Third Party Motor Vehicle Insurance
Schemes


Yellow Card Yellow Card (of
COMESA)


Orange Card ECOWAS Brown Card
insurance scheme
(Convention A/P1/5/82)
-ECOWAS “Carte Brune”
(Brown Card) and CIMA
Code


Road Customs Transit Declaration
Document


COMESA Customs
Declaration Docu-
ment (CD-COM)


Single Administrative
Document (SAD)


ECOWAS’ Interstate Road
Transit Scheme (ISRT)
– Convention A/P4/5/82
and Supplementary
Convention A/SP.1/5/90


Road check points Significant reduction ECOWAS Interstate Road
Transport (IST) – Con-
vention A/P.2/5/82


Regional Customs Bond Customs Bond
Guarantee Scheme
- Harmonized with
SADC


Customs Bond Guaran-
tee Scheme - Harmo-
nized with COMESA
and EAC


Customs Agreements on
Inter-State Road Transit
(TRIE Convention)


Border Posts Operations 15 OSBP envisaged; 7
under development


Chirundu OSBP Pilot;
Other OSBP Projects
in NSC


At least 12 OSBPs
envisaged


ICT for Vehicle Tracking and Fleet
Management




35Trade Facilitation from an African Perspective


Trade Facilitation Instruments: WTO Provisions and African Realities


for some of the transit transport instruments of RECs
as well as sub-regional agreements such as the Northern
Corridor Agreement12. The TIR Convention calls for the
simplification of formalities for international transport,
especially at borders. Its provisions include customs func-
tions during transit of sealed containers, guarantees,
procedures and markings of trucks.


Article 12: Customs Cooperation


This article deals with the exchange of information in
identified cases of import, export or transit where there
is reason to doubt the truth or accuracy of a declaration
submitted by the importer, exporter or agent. Customs
cooperation initiatives in Africa have already been dis-
cussed under Article 9 on border agencies cooperation.
It is worth adding that some African countries are imple-
menting bilateral border cooperation agreements. Better
cooperation between the agencies involved in customs
clearance at the border between Zambia and Zimbabwe is
reported to have reduced waiting time for traders (World
Bank, 2011).


12 Northern Corridor Agreement covers Kenya, Rwanda, Burundi,
Uganda and DRC


It appears that customs cooperation is the most disputed
part of the World Trade Organisation negotiations on
trade facilitation, whilst a number of developing coun-
tries are requesting a binding agreement to exchange
information, because they are keen to combat illicit trade
(Illicit Financial Flow - IFF), while some Members will
not accept anything more than a general framework on
customs cooperation. The reason why African countries
in particular are eager for a binding agreement on the
exchange of information is obvious from Figure 12 which
shows the huge scale of illicit financial flow on the conti-
nent, irrespective of the methodology used to measure it.


Over the period 2000-2008 Kar and Carthwright-Smith
(2010) estimate cumulative illicit financial flow from Af-
rica due to only trade mispricing at US$162 billion whereas
comparable estimates from Economic Commission for
Africa are even higher at US$242 billion.


However, when looking at the ratio of trade mispricing
to the total amount of illicit financial flows which is esti-
mated to represent up to 55% of total illicit financial flow
from developing countries (Baker, 2005), the Economic
Commission for Africa’s estimates are in the range. From
Figure 12, which also plots the evolution of estimates from


Figure 12


Illicit Financial Flow from Africa over the period 2000-2009 – US$ Billion – Methodology comparisons


0


20


40


60


80


100


Ndikumana and Boyce (2008) - All IFF
Kar and Carthwright-Smith (2010) - All IFF
UNECA's methodology - Trade mispricing only


Kar and Freitas (2011) - All IFF
Kar and Carthwright-Smith (2010) - Trade mispricing only


2000 2001 2002 2003 2004 2005 2006 2007 2008


Source: Based on Ndikumana and Boyce (2008), Kar and Carthwright-Smith (2010) and Kar and Freitas (2011) and authors’ computations for
UNECA’s methodology.




36 Trade Facilitation from an African Perspective


Trade Facilitation Instruments: WTO Provisions and African Realities


Kar and Carthwright-Smith (2010) for the total illicit fi-
nancial flow between 2000 and 2008, illicit financial flow
shares for the trade mispricing component can easily be
deducted. Indeed, Kar and Carthwright-Smith (2010) as-
sess a total cumulative illicit financial flow in Africa over a
9 year period at US$ 448.4 billion, Economic Commission
for Africa estimates for cumulative illicit financial flow
through only trade mispricing represent 54.1% of this
total while Kar and Cartwright-Smith (2010) computa-
tions for trade mispricing would correspond to 36.2% of
total cumulative illicit financial flow for the same period.
Finally, even though Baker’s approximation of the share
of illicit financial flow through trade mispricing in total
illicit financial flow is for developing countries and not
specifically Africa, the Global Financial Integrity (Kar and


Freitas, 2011) also stated that “illicit outflows through trade
mispricing from Africa grew faster, with a real growth rate
of 32.5 percent between 2000 and 2009, clearly outpacing
such outflows from developing Europe (9.7 percent), Asia
(7.7 percent), and other regions”.


Turning to the sector level analysis, Figure 13 provides the
10 sectors, defined for the Harmonized System at 2-digit
level (HS2),13 for which cumulative illicit financial flows
from Africa have been the highest over the period 2000-
2009. As expected, illicit financial flow from the continent


13 Note that data are available at the HS6 level of sectors but then
aggregated at the HS2 level (97 sectors) in order to gather sectors
by main categories.


Figure 13


Top 10 sectors (Harmonized System at 2-digit level - HS2 classification) by cumulative IFF (2000-2009)
for Africa – US$ billion – Trade mispricing only


27 71 26 08 85 72 74 03 62 18


80


70


60


50


40


30


20


10


0


Source: Authors’ computations


Notes: Harmonized System at 2-digit level (HS2) codes & definitions


27 Mineral Fuels, Mineral Oils and Products of their Distillation; Bituminous Substances; Mineral Waxes.
71 Natural or cultured pearls, precious or semi-precious stones, precious metals, metals clad with precious metal, and articles thereof;


imitation jewellery; coin.
26 Ores of Iron with pyrites, Slag and Ash.
08 Edible Fruits & Nuts, Peel of Citrus/Melons
85 Electrical Machinery & equipment & parts, telecommunications equipments, sound recorders, and television recorders.
72 Iron and Steel
74 Copper and articles thereof
03 Fish & Crustaceans
62 Articles of apparel and clothing accessories not knitted or crocheted
18 Cocoa & Cocoa preparations




37Trade Facilitation from an African Perspective


Trade Facilitation Instruments: WTO Provisions and African Realities


are highest in the extractive and mining industries. In-
deed, more than half (56%) of the illicit financial flow
from the African continent over a 10 years period comes
from oil, precious metals and minerals, ores, iron and
steel and copper . Moreover, these are highly concentrated
in very few countries. Nearly three quarters of the total
illicit financial flow in oil from Africa during the period
2000-2009 are found in only three countries, namely
Nigeria, Algeria and Sudan, with 37%, 21% and 14%, re-
spectively. In the following three sectors: precious metal
and mineral, iron and steel, and ores, the greatest shares
in the total illicit financial flow from Africa are registered
in the Southern African Customs Union (SACU) with
98%, 61% and 59%, respectively. Regarding the copper
sector, Zambia alone is estimated to concentrate 64% of
the continental illicit financial flow.


Article 13: Institutional Arrangements


This article focuses on the establishment of a Committee
on Trade Facilitation, including its membership, opera-
tional modalities and functions. In terms of the present
situation in managing trade facilitation in Africa, vari-
ous institutional arrangements have been established to
oversee activities/initiatives at the sub-regional level. In
particular, corridor management bodies have been set
up to promote and develop the various transit corridors
across the continent. It has been observed that corridors
with corridor institutions are generally better equipped to
address challenges - such as investment in infrastructure,
regulation of transport and trade, private sector participa-
tion, and professionalism in the logistics industry - than
those without an institutional arrangement.


Regional coordination is ensured by the Regional Eco-
nomic Communities through various fora, including
the continental level Regional Economic Communities
Transport Coordination Committee (REC-TCC). Dis-
cussions are also underway to create the Africa Corridor


Management Alliance (ACMA). Given that all corridors
are anchored at maritime ports, the Port Management
Association of Eastern and Southern Africa (PMAESA)
and the Port Management Association of West and Central
Africa (PMAWCA), also have a particularly important
role in coordinating port operations that affect corridor
performances in their respective regions. Thus, it can
be argued that Africa is already moving towards setting
up the institutional arrangements to coordinate transit
transport.


Article 14: National Committee on Trade
Facilitation


This article calls on each member State to establish and/
or maintain a national committee on trade facilitation
or designate an existing mechanism to facilitate both
domestic coordination and implementation of provi-
sions of the World Trade Organisation agreement. The
concept of National Committee on Trade Facilitation
is not new in Africa. As far back as 1994, the Economic
Community of West African States (ECOWAS) adopted
decision A/DEC.3/8/94, establishing National Committees
for transport related issues, comprising of representatives
of transport authorities, police, customs, road transport
associations, and the Presidency, among others. These
National Committees had a scope which included facilita-
tion. ECOWAS Decision A/DEC.9/01/05 of January 2005
re-organised the institutional framework for the imple-
mentation of its facilitation programme by establishing
three organs, namely: National Facilitation Committees;
Cross Border Management Committees; and a Regional
Inter-State Road Transport and Transit Facilitation Com-
mittee. The National Facilitation Committees expand the
membership of the previously defined Committees by
adding more representatives from the private sector, such
as: forwarding agents, customs agents, Port authorities,
and chambers of commerce and industry (ECOWAS, EU,
UEOMOA, 2008).




38 Trade Facilitation from an African Perspective


Trade Facilitation Instruments: WTO Provisions and African Realities


4.4. Revised Kyoto Convention, Customs Administrations and WTO
Trade Facilitation Negotiations
It is interesting to note that more than a third of African
countries are signatories/have ratified the Revised Kyoto
Convention (RKC), which is generally consistent with the
proposed World Trade Organisation trade facilitation
provisions. Moreover, the Directors General of Customs
in their 5th Ordinary Session held in Cotonou, Benin,
in September 2013 recommended that “when drafting
the Continental Free Trade Area negotiating texts at the
continental level, the Revised Kyoto Convention provi-
sions could be included in the text such that any Party
that would have agreed/signed the texts will be bound to
implement the elements of the Convention”. They also
recommended that “Customs Administrations are en-
couraged to lobby other relevant national institutions
on the need to fast track pending national processes for
accession to the Convention”.


Ratifying versus Implementing RKC and Other Trade
Facilitation Instruments


Experts at the 1st Joint African Union Commission –
World Customs Organisation Seminar on the Revised
Kyoto Convention, held in Nairobi in June 2013 identified
three broad categories of challenges to its ratification,
namely:


• Strategic challenge: Related to political will as well
as the willingness of customs and administrative
officials to support implementation of the Revised
Kyoto Convention. This is associated with lack of
conviction on the benefits of ratifying the convention
by some authorities;


• Institutional Challenge: Related to inadequate hu-
man and infrastructure capacity of Regional Eco-
nomic Communities and member States, which is
compounded by the large turn-around of customs
officials; and


• Procedural challenge: Related to the process of
adhering to the Revised Kyoto Convention, which
is perceived by some customs officials to be too


bureaucratic, complex, and long. In some cases, the
process goes through the parliament which usually
has a tight schedule, resulting in long delays before
issues related to international conventions are in-
cluded in the agenda. Various ministries such as
Trade, Finance, and Foreign Affairs are also involved
in the process.


These challenges are valid for other conventions. Moreo-
ver, ratifying a convention is not an end in itself. Experi-
ence has shown that adopting trade facilitation instru-
ments does not necessarily mean that Regional Economic
Communities and their member States fully implement
them. The same African Union – World Customs Organi-
sation Seminar identified the following implementation
challenges:


• Translating political will into effective engagement
of political leaders to implement the Revised Kyoto
Convention, for instance, by mainstreaming it in
national laws;


• Mobilising resources for the implementation of the
Convention;


• Capacity development, especially as modernisation
requires sustainable capacity development;


• Internal and external communication, including un-
dertaking sensitisation campaigns;


• Developing a risk management policy, in terms of
reconciling trade facilitation, security, and customs
revenue;


• Adopting a national legal framework that is consistent
with the Convention. Adaptation of text is a tedious
and complex process; and


• Monitoring and evaluation, without which it is impos-
sible to know the progress that is being made as well




39Trade Facilitation from an African Perspective


Trade Facilitation Instruments: WTO Provisions and African Realities


as the challenges in implementing the provisions of
the Convention.


A recent study by the Economic Commission for Africa
identified similar reasons for the non-implementation of
legal instruments in general, including: lack of designated
institutions at the national level to follow-up with ratifi-
cation process; precedence of bilateral agreements over
regional agreements; failure to properly document legal
instruments within institutions; lack of knowledge and
poor information dissemination; multiple memberships
to RECs/overlapping membership; lack of political will;


poor infrastructure to support policies; poor inter-agency
coordination; and obsolete or outdated instruments.


It is likely that these same challenges will be faced in
implementing the World Trade Organisation trade fa-
cilitation provisions – if they come into force – with the
additional concern of their binding nature (after appro-
priate transition periods). It is conceivable that World
Trade Organisation commitments may motivate the im-
plementation of trade facilitation measures as countries
are generally expected to avoid sanctions associated with
non-compliance.


4.5. Conclusions


Overall, the analysis has shown that, regardless of WTO
processes, African countries are already stepping up ef-
forts to facilitate trade - especially intra-Africa trade in the
context of the Continental Free Trade Area. Indeed trade
facilitation is one of the clusters in African Union’s Action
Plan on Boosting Intra-African Trade, and the renewed
attention to trade facilitation is expected to consolidate
ongoing efforts by Regional Economic Communities and
their member States, whose activities are largely consistent
with the proposed World Trade Organisation provisions.
The gaps between ongoing activities at the national level
and these provisions are likely to vary across countries
on the continent and therefore need to be assessed on a
case by case basis. In essence, the human and institutional
capacity development requirements for effective imple-
mentation of trade facilitation measures depend on the
initial condition of a country (which in this case is the
level of modernization of the trade environment already
attained). And in this respect, the same challenges to
implementing these initiatives are likely to be faced in
efforts to implement the World Trade Organisation trade
facilitation provisions – if and when they come into force.


Emprirical studies typically suggest that the benefits of
trade facilitation are likely to exceed the related costs, and


indeed African countries have realized this and are start-
ing to implement trade facilitation measures to remove
barriers to trade, at their own pace and with their own
priorities regardless of the World Trade Organisation
negotiations. It is encouraging to note that senior customs
officials are championing key elements of trade facilitation
at the continental level – through the AU Sub-Committee
of Directors General of Customs. It is envisaged that this
could strengthen national advocacy and eventually lead
to concrete results. Going forward, what is needed is to
scale-up the multitude of ongoing trade facilitation initia-
tives in Africa, at the national, sub-regional and regional
levels, and to enhance the effectiveness of their implemen-
tation – where necessary. It has also been observed that
many trade facilitation initiatives on the continent are
funded by development partners, even though beneficiary
countries do not necessarily lack resources. Against this
background, for the sake of greater ownership of the trade
facilitation agenda, domestic resource mobilization should
be bolstered, whenever possible, in order to finance the
reduction of barriers to trade.






41Trade Facilitation from an African Perspective


5The Cost of Trade Facilitation: Some Orders of Magnitude
5.1. Background


Implementation of World Trade Organisation provi-sions on trade facilitation, if and when they come into force, will have cost implications. This has always be
a concern of African countries, stretching as far back as
1996 when trade facilitation was introduced in the agenda
of the World Trade Organisation at the Singapore Ministe-
rial Conference, as one of the “Singapore Issues” – in the
context of, simplifying trade procedures. The concerns
of African countries with the costs associated with trade
facilitation are well documented. For instance, African
Ministers of Trade, meeting in Abuja in September 2001 in
preparation for the 4th Ministerial Conference of the World
Trade Organisation, stated that “Improved facilitation
will require increased technical and financial assistance
to narrow the technology and human resources gaps
that exist between developed and developing countries”.
Similarly, the position of the Least Developed countries
that emerged in the run-up to the Cancun World Trade
Organisation Ministerial Conference was that “…much
current thinking on trade facilitation pre-supposes the
establishment of common procedures, rules and regula-
tions on the movement of goods. To implement such laws
and procedures will be very costly for the Least-Developed
Countries, which they cannot afford at this stage”.


The Doha Work Programme adopted in 2004, commonly
known as the July Package, took into consideration some


of the concerns of African countries. It states, among
other things, that:


• The negotiations shall aim at enhancing technical
assistance and support capacity building in expedit-
ing the movement, release and clearance of goods,
including goods in transit (paragraph 1);


• Least-developed country Members will only require
to undertake commitments to the extent consistent
with their individual development, financial and
trade needs or their administrative and institutional
capabilities (paragraph 3)


• As an integral part of negotiations, Members shall
seek to identify their trade facilitation needs and
priorities, particularly those of developing and least-
developed countries, and shall also address the con-
cerns of developing and least developed countries
related to cost implications of proposed measure
(para 4); and


• Support and assistance should be provided to help
developing and least-developed countries implement
the commitments resulting from the negotiations, in
accordance with their nature and scope (paragraph 6)




42 Trade Facilitation from an African Perspective


The Cost of Trade Facilitation: Some Orders of Magnitude


This section seeks to answer the following questions: what
are the cost components of trade facilitation? What is the


actual cost of trade facilitation – is it really as expensive
as suggested by African countries?


5.2. Trade Facilitation Cost Components


Understanding the cost of trade facilitation is a preoccupa-
tion of governments, development partners, researchers,
and the business community, among others. Duval (2006)
undertook an exploratory survey of the costs and benefits
of implementing trade facilitation measures under the
World Trade Organisation. The expert survey examined
the implementation costs associated with 12 trade facili-
tation measures relevant to the negations. As part of the
study, Duval reviewed implementation cost information
found in World Trade Organisation members proposals
to the Negotiating Group on Trade Facilitation as well
as relevant research and policy studies. Highlights of the
review are as follows:


• Implementation of most trade facilitation measures
would entail some start-up costs for government agen-
cies in the short term. However, once the measures
are established, it is unlikely that significant financial
burdens would be involved to maintain them;


• The initial costs for implementing most trade facilita-
tion measures would likely be moderate in relation to
potential gains from lower transaction costs. Some of
the initial costs may be transferred to traders through
charges for relevant services they receive. Some trade
facilitation measures, such as collateral security for
release of goods are in themselves financial services
offered by the private sector;


• Costs of implementation vary substantially across
trade facilitation measures. For instance, measures
that entail modernisation of information technology
are more costly than the periodic review of import/
export documentation; and


• The costs of certain measures are likely to vary ac-
cording to individual situation of member countries.


Overall, 4 broad categories of costs are identified, namely:
infrastructure/facility costs; human resources costs; regu-
latory/legislative costs; and reduced revenue from fees and
charges. The establishment of Single Window systems is
perceived as the most costly trade facilitation measure, fol-
lowed by the implementation of risk management systems.
These measures also take the most time to implement, re-
quiring at least 3-5 years, provided adequate resources are
available. Measures such as the establishment of national
trade facilitation committees are easier to implement if
political will exist.


Generally, operating costs are perceived to be much lower
than setup costs, except for measures such as online pub-
lication and national trade facilitation committees. How-
ever, the overall costs of these two measures are likely
to be among the lowest compared to the costs of other
measures in the proposed World Trade Organisation
negotiating text.


5.3. Cost of Single Window systems


An assessment of the costs of trade-related regulatory re-
quirements in Ireland in 2010, focusing on Single-Window
identified a number of factors that impact on the cost
of such a system, including: size of economy; extent of
existing systems; extent of user fees and use of Public
Private Partnerships; geographical diversity of trading
union; sophistication of design in terms of technology


and equipment; existing customs automation; need for
software license; training costs; and marketing and pro-
motion of the system. These factors are also valid for
African countries.


The study associated the following costs with the intro-
duction of a Single-Window: network operation cost,




43Trade Facilitation from an African Perspective


The Cost of Trade Facilitation: Some Orders of Magnitude


hardware/software operation costs, operational support,
continuous software development, research and devel-
opment; training, change management, and additional
requirements. According to the study, the United Nations
estimates that a Single Window project can cost between
8 and 40 million Euros, depending on the size of the
country and the complexity of the system. This cost is
for implementation alone, and running costs can range
from 160,000 to 6.5 million Euros per annum. Overall, the
costs are expected to be lower for countries that already
have advanced customs systems.


The Economic Commission for Europe undertook case
studies in ten countries on the implementation of Sin-
gle Window systems, including Senegal and Mauritius.
Among other things, the studies examined the costs of
establishment of the facility. In Senegal, the Single Win-
dow, called ORBUS, was initiated by the Ministry of
Commerce in 1996, move to the Ministry of Finance
in 2001, and in 2002 GIE GAINDE 2000 was created in
order to finalise the project and to run the system, which
has been fully operational since 2005. It is estimated
that more than US$2 million was spent to support the
development process and to buy the necessary equipment
to operate the system. From the time the project was
transferred to customs (2001) to the operational phase
(2004), US$800,000 was spent to update the application,
install a new infrastructure, set the facilitation centre
and cover starting expenses (training, communication,


etc.). The ongoing operational cost has been estimated at
US$800,000 per annum.


In the case of Mauritius, its TradeNet system was designed
from scratch with the help of Singapore Network Services
Ltd. and a local team at the Mauritius Network Services
Ltd. The first phase was launched in 1994 and the fifth
phase in 2000. Exact figures for the costs of establishing
the facility are not available. However, these costs were
related to the establishment of a company to act as the
value-added network operator, and included costs related
to equipment, software, and staff. There were also ex-
penses for Customs, namely the purchasing of equipment.
On-going operational costs for the system include those
related to communications, maintenance of equipment
and staff remuneration.


The costs of establishing the Single-Window systems in
countries of other regions, including Finland, Germany,
Guatemala, Hong Kong SAR (China), Malaysia, Singapore,
Sweden, and the United States are provided in table 7. The
table shows the wide variation in the costs, ranging from
US$ 871,000 in Guatemala to US$14,300,000 in Singapore.


The estimated costs of recent attempts to establish Single
Windows in Africa generally fall within this range. For
instance, the Single Window in Rwanda launched in 2012
by the Rwanda Revenue Authority with support from
Trade Mark East Africa and United Nations Conference on


Table 7: Estimated Cost of Establishing Single-Window Facilities


Country Cost of Establishing Facility


Finland Total cost until 2002 estimated at US$1,220,000 including operating cost.
Operating cost of approximately US195,000 per year


Germany Cost of establishment estimated at US$ 1,248,000.
No information on ongoing operational cost


Guatemala Total cost of establishment estimated at US$ 871,000
Ongoing operational costs estimated at US$ 1.2 million per annum


Hong Kong (China) Hardware, system and application software license, application development and integration, document structure
standards development, testing, marketing and promotion.
Ongoing costs include staff costs, outsourced operation and support services costs, facilities repair and maintenance
costs, etc.


Malaysia Cost of establishing facility estimated at US$ 3,485,000


Singapore Initial shareholder capital invested in CrimsonLogic (formerly known as Singapore Network Services) of approxi-
mately US$14,300,000
As CrimsonLogic is a private company, the ongoing operational cost is confidential


Sweden Figures not available due to the fact that establishment took place in 1988-89
Operational cost not available


United States Difficult to isolate cost because the SW is part of a wider system




44 Trade Facilitation from an African Perspective


The Cost of Trade Facilitation: Some Orders of Magnitude


Trade and Development is estimated to cost $3.33 million.
Uganda is also reported to have launched a US$5 million
Single Widow system, linking government, clearing agen-
cies and local traders to ease and speed up international


trade. In Kenya, Shillings 1.5 billion has been budgeted to
role out the National Single Window (KenTrade).




45Trade Facilitation from an African Perspective


6Building Capacity for Trade Facilitation: How far can WTO Negotiations go?
6.1 Background


Over the years, African countries have been in-volved in numerous trade facilitation initiatives at the national, sub-regional and regional levels.
These initiatives, as discussed in Section 4 of this report,
have mostly been spearheaded by Regional Economic
Communities. The African Union has also articulated
a programme for boosting intra-African trade in the
framework of the Continental Free Trade Area (CFTA)
agenda, and trade facilitation is an important component
of the programme. Therefore, Africa’s leanings on trade
facilitation, including in the context of the World Trade
Organisation negotiations, are firmly rooted in past and
present experiences as well as a clearly defined continental
trade vision. Lessons from the past and future perspec-
tives have also shaped “red lines” in Africa’s position in
multilateral negotiations on trade facilitation.


The Declaration of African Union Ministers of Trade on
WTO issues, adopted at their meeting of 24-25 October
2013 in Addis Ababa, Ethiopia, provides insights into these
“red lines”. The Ministers underscored the importance of
Trade Facilitation and stated that their priorities include:
enhancing infrastructure and boosting productive and
trade capacities; reducing transaction costs; and support-
ing reforms and improvements to customs regulatory
systems.


The Ministers re-emphasised that “obligations and meas-
ures being negotiated under the Trade Facilitation consoli-
dated text must include binding, effective and operational
rules on Special and Differential Treatment. The obligation
on developing countries and Least Developed Countries
(LDCs) to implement the Trade Facilitation Agreement
should be based upon their acquisition of capacity to
implement, including through fulfilling, by developed
countries, the obligation of delivering binding, new and
long-term technical and financial assistance and capacity
building necessary for African countries to achieve full
implementation capacity”. The Declaration underlies
“the importance of the principles of self-designation and
self-assessment under Section II of the Draft Trade Facili-
tation Agreement by developing countries and LDCs in
determining the acquisition of capacity to implement”.
The Ministers also re-emphasised the positions held by
the WTO African Group on Trade Facilitation specifically
that “it is not a self-balancing, win-win and a monolithic
pillar in the Doha Development Agenda (DDA)”. They
called for an internally balanced agreement, providing
developing countries and LDCs with policy space and
flexibility to adopt and implement commitments com-
mensurate with their capacity to do so.


It is obvious from the Ministerial Declaration that Africa’s
position on the World Trade Organisation negotiations




46 Trade Facilitation from an African Perspective


The Cost of Trade Facilitation: Some Orders of Magnitude


on Trade Facilitation hinges on capacity building. But
what kind of capacity is being alluded to? Do all parties
(developed, developing and LDC members) have a com-
mon understanding of the capacity required to implement
the draft World Trade Organisation provisions? Even if
Section II of the draft negotiating text were binding, would
capacity development assistance provided by development
partners differ from current practice (as reflected, for


example, by what is being reported under Aid for Trade)?
If not, would it make any significant difference to the abil-
ity of African countries to implement the agreement? The
remaining part of this section attempts to shed some light
on these questions. It addresses trade facilitation capacity
building not only in the context of WTO negotiations but
also from a broader perspective, consistent with Africa’s
medium to long term trade agenda.


6.2 Scope and Scale of Capacity Building for Trade Facilitation


Annex D of the Doha Work Programme (July Package)
provides an idea of the scope of capacity building/techni-
cal assistance required as part of the Trade Facilitation
agreement. It contains, among others, the following ele-
ments, in line with the Ministerial Declaration mentioned
above:


• Provision of technical assistance and capacity build-
ing in expediting the movement, release and clearance
of goods, including goods in transit;


• Members are required to undertake commitments to
the extent consistent with their individual develop-
ment, financial and trade needs or administrative
and institutional capabilities; and


• Members shall seek to identify their trade facilitation
needs and priorities, particularly those of developing
and least developed countries, and shall also ad-
dress the concerns of developing and least developed
countries related to cost implications of the proposed
measures.


A close examination of the articles in Section I of the draft
consolidated negotiating text also provide an indication
of the capacity required for their implementation. This
includes capacity related to trade procedures (developing,
disseminating and enforcing rules and regulations); and
capacity related to trade infrastructure (mainly in the area
of Information and Communication Technology (ICT),
notably Single Windows). The scale of the capacity build-
ing required would be country-specific and would depend
on several factors such as size of the economy, and the


initial condition of a country (level of development, for
instance in customs automation), among others.


Table 1 shows the complexity of capacity building require-
ments in the context of the articles in the negotiating text,
and for trade facilitation in general. In this regard, the
requirements could be viewed from several levels, includ-
ing: the concerned national authorities (trade, customs;
transport, health, and security, among others); units of
capacity building (individuals, institutions, trade com-
munity); and intervention areas (training, provision of
equipment and financial resources, development of sys-
tems, and construction of facilities, among others). In
essence, effective implementation of the articles and trade
facilitation in general requires the provision of training to
individuals in all concerned national authorities as well
as raising the awareness of the wider trade community on
simplified trade procedures. It also requires the provision
of appropriate equipment and financial resources to the
concerned authorities.


Many of the capacity building requirements derived from
the draft consolidated negotiating text and for trade fa-
cilitation in general are related to customs operations.
Therefore, Customs Administrations should play a leading
role in identifying specific activities to be implemented.
It is likely that some of these administrations are already
working with development partners, such as the World
Customs Organisation (WCO), to strengthen their capac-
ity to facilitate international trade. Therefore, what may
be required, in such cases, is to upscale on-going efforts.




47Trade Facilitation from an African Perspective


The Cost of Trade Facilitation: Some Orders of Magnitude


Overall, the perspective from which trade facilitation
is viewed determines the scope of capacity building re-
quirements. Based on the premise that trade facilitation
is about reducing trade costs and transaction time, ca-
pacity requirements would broaden substantially if all
determinants of trade costs and delays are taken into
consideration. Section 2 of this report clearly shows that
transport costs, particularly inland transport costs, con-
stitute a large share of total trade costs in Africa. For many
countries on the continent, especially landlocked ones,
the share of inland transport costs in total trade costs
outweigh the shares of costs associated with preparation
of documents, customs, and port handling. Indeed, inland
transport costs could be as high as 70 percent of total
import/export costs in some landlocked countries. It is
known that inadequate transport infrastructure (roads,
railways) contribute significantly to high transport costs.
Hence, any attempt to facilitate trade is unlikely to make
a serious dent in trade costs if issues of transport infra-
structure are not addressed.


It is in this context that the North-South Corridor pro-
gramme is widely considered as a good practice in trade
facilitation. The programme is jointly implemented by


the Common Market for Eastern and Southern Africa
(COMESA), East African Community (EAC), and South-
ern Africa Development Community (SADC) in the
framework of their Tripartite arrangement. It is supported
by the United Kingdom’s Department for International
Development (DFID) through Trade Mark Southern Af-
rica and championed by President Jacob Zuma of South
Africa, as part of the New Partnership for Africa’s Devel-
opment (NEPAD) Presidential Infrastructure Champion
Initiative (PICI). The North-South Corridor programme
spans across 3 Regional Economic Communities (RECs)
and 8 countries and includes projects aimed both at im-
proving transport infrastructure as well as removing
non-physical barriers to transport and trade. Being a
trade capacity building initiative, the programme could
help countries in identifying the support required in the
World Trade Organisation framework and indeed other
trade facilitation initiatives, beyond issues related to trade
procedures.


It is worth acknowledging that development partners have
made efforts, most of which are on-going, to support Afri-
can countries to develop and implement trade facilitation
programmes and projects. But experience has shown that


Table 8: Indicative capacity needs and concerned national authorities


Article Indicative Capacity Requirements National Authorities Involved


Article 1 Promptly publish trade information; provide internet updates;
establish/maintain entry points


Trade, Customs


Article 2 Regular consultations between border agencies and traders/
other stakeholders


Customs, Immigration, Police, transport, traders/
other stakeholders


Article 3 Prompt issuing of advanced ruling in response to requests;
make available information on advanced ruling


Trade


Article 4 & 5 Ensure that appeal or review procedures are carried out in a
non-discriminatory manner; Appeal mechanism


Customs, other relevant border agencies, Trade,
Customs, Judiciary


Article 6 Periodic review of fees and charges; enforcement of fees and
charges connected to importation and exportation


Customs, transport


Article 7 Electronic payments; adopt and maintain risk management
systems; adopt and maintain post-clearance audit; measure and
publish average release times; establish Authorised Operators


Customs


Article 9 Border agency cooperation Customs, Immigration, Police


Article 10 Review formalities and documentations connected with impor-
tation and exportation; use of international standards; establish
and maintain single windows


Trade, customs, transport


Article 11 Making available infrastructure for transit traffic Customs, ports, transport


Article 12 Exchange of information Customs


Article 13 & 14 Effective participation in Committee on Trade Facilita-
tion; establish and maintain National Committees on Trade
Facilitation


Trade, Customs, traders, transport, other
stakeholders


Source: ECA based on WTO draft consolidated negotiation text on Trade Facilitation




48 Trade Facilitation from an African Perspective


The Cost of Trade Facilitation: Some Orders of Magnitude


there is a limit to the scope and scale of capacity building
and technical assistance that partners can provide. This
can be seen from the type of interventions classified as
support to trade facilitation by Africa’s partners – ranging
from the remuneration of “Experts or Trade Advisers”
from partner countries to a variety of workshops and
consultancies, whose impacts are difficult to assess and
generally remain uncertain. African countries, therefore,


need to be cautious with their expectations on trade facili-
tation capacity building support and technical assistance
in the context of multilateral negotiations. A piecemeal
approach to trade facilitation capacity building may also
yield limited results. It seems appropriate to adopt a com-
prehensive programme approach that incorporates all
dimensions of trade facilitation into a coherent plan.


6.3 Conclusion and Way Forward


While Africa’s position that capacity building should be
a binding commitment in the WTO trade facilitation
agreement is quite clear, more effort is needed to articulate
details on what should constitute capacity building and
how it could be operationalized. This obviously would be
country specific, but there is a need for broad guidelines
on the kind of activities that should be included in Section
II, particularly those in Categories B and C, in the draft
negotiating text. In essence, Africa should consolidate its
position by defining: (i) the scope of the envisaged capac-
ity building, in terms of the areas to be covered, such as
institutions and infrastructure (rules and regulations;
physical infrastructure – roads, railways, ports); and (ii)
intervention areas, in terms of training of personnel as
well as provision of equipment and financial resources;
among others.


An important element of Africa’s position is that Afri-
can countries themselves should determine their capac-
ity requirements. In this regard, it is essential to decide
whether these requirements should be determine strictly
from the proposed articles in the draft negotiating text
or if other interventions considered by African countries
as priorities to reduce trade costs and time should be
included. Infrastructure, notably roads that are part of
regional transport corridors, is particularly relevant in
this regard. While African countries recognise that in-
adequate physical connectivity is a critical constraint to
international trade, improving transport infrastructure
remains at the periphery of the World Trade Organisa-
tion negotiations on trade facilitation, and indeed is not


considered by many to be part of the negotiations. From an
African context, it appears that any initiative to facilitate
trade (reducing costs and delays) without a component
to improve physical connectivity would be incomplete,
especially for landlocked countries, given that transport
costs represent a large share of total trade costs.


Generally, effective trade facilitation capacity building
initiatives require human capacity development (upgrad-
ing the skills and knowledge of trade officials and other
stakeholders), introduction of systems to simplify pro-
cedures and reduce delays while ensuring security and
safeguarding government revenue (such as Single Win-
dows, scanners, among others), and improving physical
infrastructure (roads, railways, ports, among others).


Overall, while capacity building is central to Africa’s
position in the World Trade Organisation negotiations
on trade facilitation, the specifics such as the scope of
capacity building required, the intervention areas and how
to operationalize the envisaged binding commitments,
especially for activities in Category B and C in the draft
negotiating document, still have to be articulated. As a
guiding principle, and in other to substantially reduce
trade costs, capacity building in relation to effectively
designing, publishing and implementing simplified trade
rules and regulations; developing and operating Single
Windows; as well as customs cooperation and integrated
border management should be complemented by improve-
ments in transport infrastructure.




49Trade Facilitation from an African Perspective


7Conclusions and Policy Implications
This paper has shown that high transaction costs remain a significant obstacle not only to Africa’s integration into the global market, but to the con-
tinent’s own regional integration. Whilst proximity should
in principle have a positive impact on comprehensive
trade costs, poor infrastructure provision and inefficient
customs directly dampen these positive effects. Inadequate
implementation of harmonised policies to address tech-
nical barriers to trade, sensitive product lists, and other
non-tariff barriers also impinge on the regional market
in Africa and exacerbate the situation, leading to what
has been called a “proximity gap”.


Whilst tariff play quantitatively a minor role compared to
non-tariff comprehensive costs, they often appear to hit
regional trade disproportionately, particularly in relation
to manufactures trade. This underscores the importance of
the establishment of the Continental Free Trade Area, and
the realization of the broader regional integration agenda.


Overall, Africa’s reliance on imported inputs from outside
the continent concurs with the evidence of increasing ex-
port concentration on primary commodities, and limited
weight of intra-industry trade. The fourfold expansion of
intermediate imports within a decade however suggests
an incipient intensification of economic linkages along the
value chains, particularly in the case of some fast-growing
economies in East and Southern Africa.


This study has shown that high transaction costs in Af-
rica undermines Africa’s industrialization and structural
transformation agenda, hindering value addition and
perpetuating the continent’s long-standing concentration
on primary commodities exports.


Regarding the draft World Trade Organisation negotiat-
ing text on trade facilitation, the following conclusions
emerged from the analysis of this study:


• Trade facilitation is an imperative for boosting intra-
African trade and realising the Continental Free
Trade Area;


• The provisions of the draft World Trade Organisa-
tion trade facilitation negotiating text appear to be
relevant and generally consistent with African trade
facilitation objectives at the national, sub-regional
and continental levels;


• Given that the benefits of trade facilitation are likely
to exceed the costs, according to findings of em-
pirical studies; African countries have an interest
in cutting transaction costs regardless of the World
Trade Organisation process. Indeed many of them are
already implementing activities that address several
provisions of the draft negotiating text in the context
of their regional integration agenda;




50 Trade Facilitation from an African Perspective


Conclusions and Policy Implications


• African countries and Regional Economic Communi-
ties have to scale up ongoing efforts using domestic
resources to the extent possible;


• Some African countries have demonstrated the ability
to design and implement trade facilitation measures
by themselves and even to provide technical support
to other African on the continent; and


• Generally, African countries seem to have the prefer-
ence for sub-regional and bilateral agreements over
international conventions on trade facilitation.


Finally, the study shows the wide variation in the costs
of implementing trade facilitation measures, depending
on factors such as size of economy; extent of existing
systems; use of Public Private Partnerships; sophistica-
tion of design in terms of technology and equipment; and
existing customs automation; among others. Generally,
operating costs are perceived to be much lower than setup
costs, except for measures such as online publication and
national trade facilitation committees.




51Trade Facilitation from an African Perspective


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54 Trade Facilitation from an African Perspective


Annex


Annex 1: Literature Review Scheme
Table 1


Paper Coverage Methodology Results


Massimiliano
Ca et al. (2011)


100 developing
countries over
2002-2007


Panel data analysis AfT to Trade Facilitation reduces significantly cost and time to trade (100% increase in AfT to TF cuts cost of import by 5% and cost of exports by 4.7%)


Iwanow, T et
al. (2009)


124 developed
and developing
countries (25 SSA
countries) over
2003-2004


Panel data analysis


Trade Facilitation reforms could improve export performance in Africa.
On-the-border and behind-the border policies yield higher returns of
increasing manufacturing export performance in Africa than in the rest
of the world.10% rise in trade facilitation environment increases African
exports by 17%. Distance reduces African trade with 23% compared to the
average country (17%).


Mann, C et al.
(2005)


75 countries over
2001-2002 across
geographical
regions (3 African
countries)


Panel data analysis


Trade facilitation increases trade. In contrast to other regions, the 3 African
countries in the sample have small exports gains compared to import gains
because of lacking integration in the global market of manufactures and
less access to OECD markets. Improvement in Trade facilitation of the
“below average” countries yields an increase in global trade of 377 USD
billions (9.5%).


Hoekman, B
et al. (2011)


105 countries for
2006 Panel data analysis


Tariffs and NT measures is a significant source of trade restrictiveness for
low income countries. Trade facilitation (behind-the-border measures) has
the largest effect in expanding developing countries trade (exports in par-
ticular). Trade costs reflects a bottleneck for low income countries imports
(13,5% and exports 17%)


Portugal-Pe-
rez, P et al.
(2012)


100 countries over
2004-2007


Panel data analysis
+ HMR (Heckman,
Helpman,
Melitz and
Rubinstein)


Trade facilitation boosts developing countries’ exports performance. Im-
provements in infrastructure and border and transport efficiency halfway
to the level of Africa’s top performers would already be significant. For
Chad, if investment were focused on improving the infrastructure quality,
halfway to the level of South-Africa, the ensuing expansion in exports
would match the one that could be achieved with a reduction of 24% in
tariffs in importing countries.


Portugal-Pe-
rez, A, et al.
(2009)


104 importers
and 115 exporters
(including 22-47
African coun-
tries). Data from
2006.


Panel data
analysis+HMR


Important gains can be achieved through TF.For African countries; cutting
trade costs half-way to the level of Mauritius has greater effects on trade
flows than substantial cuts in tariff barriers. For Ethiopia cutting its costs of
trading a standardized container of goods half-way to the level in Mauritius
would be
equivalent to a 7.6% cut in tariffs faced by Ethiopian exporters across all
importers.


Wilson et al
(2009)


167 exporters and
172 importers
over 1990-2005


Panel data
analysis,Gravity
model


Aid for trade facilitation has a significant relationship to greater trade flows.
(1% in aid directed trade facilitation, yields an increase in global trade of
around 818 USD millions, Rate of return for one aid -dollar is 697 USD)


Naudé, W et
al.(2009) Africa Literature review


Trade facilitation is one crucial measure to overcome Africa’s “Proximity
gap”. Transport infrastructure should be included in the WTO binding
rules on TF.


Alaba, B et al.
(2006)


ECOWAS and EU
countries Literature review


Highlights the importance of Aid for Trade from the EU to ECOWAS in
order to achieve unhindered flow of trade.


OECD (2012a) Various countries Literature review


Finds positive causal links between improvements in trade facilitation with
trade flows and government revenue. Particularly for developing countries
implementing custom modernization programs would enhance trade tax
collection efficiency’s. Trade facilitation would also have a positive effect
on a country’s ability to attract FDI, as well as better integrating in global
production supply chains.




55Trade Facilitation from an African Perspective


Annex


Paper Coverage Methodology Results


Mevel S. and
S. Karingi
(2012)


Africa Dynamic CGE model (MIRAGE)


If the creation of the Continental Free Trade Area (CFTA) is complemented
by trade facilitation measures (namely the halfing of the time goods spend
at African ports, and twice more efficient customs procedures) potential
real income losses associated with the removal of tariff barriers within the
continent would be offset, in all African countries, and the share of intra-
African trade would more than double between 2012 and 2022, from 10.2%
to 21.9%.


Zaki, C (2011)


19 regions, 21
sectors over
2004-2008. 16
African countries
+ African regions
(GTAP)


Dynamic CGE
model (MIRAGE)


Developing countries especially SSA countries gain much more form trade
facilitation than developed countries. Partial removal of administrative
barriers reduced trade costs by 50%. Welfare gains in SSA increases 4.67%.
TF yields an increase of exports in SSA by 22.28%. When administrative
barriers are removed improvements in terms of trade for SSA increases by
2.33%. Removal of red tap expenses increases intra-regional trade in SSA
by 77.23%. SSA exports in machinery, electronics, metallic products and
textile and garments increase by 151 %- 320%. TF increases employment in
SSA by 2.69% due to expansion of manufacturing sector.


Decreux, Y
and Fontagné,
L (2011)


21 regions and
26 sectors over
2004-2007


Dynamic CGE
model (MIRAGE)


Trade facilitation would result in USD 67 billion gains each year to world
GDP over the long term. Port efficiency would increase GDP with a further
USD 35 billion. In addition, findings show that if agriculture and industry
were to be liberalized, world GDP would increase by USD 70 billion.


ICT, Interna-
tional Trade
Centre (2012)


SSA (2012-2025) Dynamic CGE model (MIRAGE)


SSA countries could gain USD 35 billions annually from trade facilitation
and infrastructure improvements. The expected gains for SSA of investing
in trade facilitation (infrastructure) alone is an increase in exports of up to
51% beyond the baseline growth forecast (12-12%/year). In addition it will
yield an annual GDP gain of USD 20 billion by 2025. If time in customs
clearance is reduced by 50% it can yield an additional annual GDP of USD
15 billion. West Africa would be the region benefiting most from trade
facilitation. Findings shows that reducing transportation time by improving
transport infrastructure within Africa will bring the largest welfare benefits
to the whole region and increase most their intraregional trade.


IFPRI (2010)
2009-2018
Maghreb
countries


Dynamic CGE
model (MIRAGE)


For Maghreb countries (2009-2018), measures to improve trade facilitation
would reduce trade costs by 50%. Adding trade facilitation to the regional
FTA would boost exports and increase national income. Compared to a
FTA without trade facilitation.


Decreux, Y
and Fontagne,
L(2006)


World Economy
24 regions


Dynamic CGE
model (MIRAGE)


A successful trade facilitation agenda would be equivalent to doubling
ODA to SSA countries after 2020. Trade facilitation yields a 7.2% increase
in world trade. This implies welfare gains of 0.95% of world GDP (USD
330 billion). Findings show that the EU would have the largest gains of
trade facilitation 1/3 while SSA would gain 20 billion (6%). Real wages for
unskilled labour would increase by 9.2% in SSA. (Costs of implementing TF
not included in the calculations).


OECD(2003) 9 regions, 3 sectors CGE model


A 1% reduction of trade transaction costs (TTCs) on goods trade will result
in annual gains of USD 40 billion on world basis. Developing countries will
particularly benefit from this reduction, SSA (0.19% of GDP) and North
(0.27% of GDP).


Francois, J, et
al.(2005) WTO countries CGE model


A TTCs reduction equivalent to 1.5% of trade value would yield an increase
in annual income by USD 72 billion. Most of these gains would benefit
developing countries (in proportion to national income).


APEC (2002) APEC countries CGE model A 5% reduction in TTCs for merchandise trade raises APECs GDP by 0.9% (USD 154 billion).


Dollar, D et al.
(2004)


8 developing
countries, 7302
companies


Survey
methodology


Survey results from eight developing countries and over 7000 companies
shows that custom clearance times (both imports and exports) has a strong
negative effect on exportation.


Wilson et al
(2004) 75 countries


Panel data analysis,
Gravity model


Improvements in port efficiency and customs administration for below-
average countries, half way to the global average would increase trade flows
by USD 107 billion and 33 billion respectively. Gains would be significantly
larger for developing countries. Improvements in trade facilitation will
yield a USD 377 billion increase in global trade of manufacturing goods.




56 Trade Facilitation from an African Perspective


Annex


Paper Coverage Methodology Results


Batra et al(
2003)


80 countries, 8560
companies


Multivariate data
analysis/ Survey
methodology


Customs/foreign trade regulations were identified to be the second most
serious tax and regulatory constraint on operations and business growth/
trade in Africa.


OECD (2005) Angola Case study
Substantial reforms of the customs authority were put in place, after 2
years and a half (total period 5 years) revenues had increases by 150% and
customs processing time had been reduced to 24 hours.


De Wulf
(2004) Ghana Case study


In 2001 the customs ICT network model was introduced to improve capac-
ity and effectiveness of the customs authority. By mid-2003 the network
covered 90% of total trade flows and government revenue collected from
airport traffic had increased by 30%. Average customs clearing time at the
main airport was reduced from 4 days to 3 hours.


OECD (2005) Mozambique Case study


The 1997 the customs reform program was introduced. During the first two
years imports increased by 4% and customs revenue by 57%. Significant
reduction in clearance time at the main port (Maputo) 80% of road imports
and 62% of sea imports were cleared by customs within 24 hours. Invest-
ments were recovered within 14 months.


De Wulf, L,
and Sokol, J.B
(2004)


Uganda Case study
A comprehensive reform program in the 1990s (trade liberalization and
customs modernization) brought significant results. Revenues of the Rev-
enue Authority increased from 7, 7% to 13% of GDP from 1992-2002.


Otsuki, T et
al. (2001)


15 EU countries
and 9 African
countries over
1989 -1998


Panel data analysis,
Gravity model


Examine the impact of European aflatoxin standards on African groundnut
exports. Finds that a 10% increase in restrictiveness is associated with an
11% fall in trade volumes. Furthermore, the new EU standard would reduce
health risk by 1.4 deaths per billion a years and decrease African exports by
64% (USD 670 million).


Freund, C
and Rocha, N
(2010)


44 Sub- Saharan
African countries Gravity model


Transit delays have the most significant effect on exports (economically and
statically). Reducing inland travel by one day increases exports by 7%. 1%
reduction in transit delays leads to 1.5% more trade.


Coulibaly, S.,
Fontagné, L.,
2005


WAEMU
countries ( West
African Economic
and Monetary
Union )


Armington-based/
gravity model


The paper shows that there is an untapped potential for South-South trade.
If all interstate roads were paved, the countries would trade 2.87 times
more than they do today. Thus there is a great potential for road pavement
projects. Findings show that transit distance is an additional impediment to
trade (yields additional trade costs of 6% of total trade costs), which implies
that geography of the transit countries matters.


Bouet, An-
toine, Santosh
Mishra,
Devesh Roy,
(2008)


Africa (45 +
countries) over
1998-2004


Semiparametric
gravity model


Using the Heckman method findings shows that Africa is an underexporter
not underimporter. Transport and communication infrastructure is creat-
ing an undertrading effect for Africa. In terms of infrastructure, findings
shows that for poor African countries Chad, Congo and Mauritius a 1% in-
crease in phone density increase exports by more than 0.35%. The marginal
impact of road density on trade in Sudan is 0.7. Low quality of trade related
infrastructure in Africa implies that improvement sin this field can yield
high returns.


OECD (2012b)
107 countries
(including 35
African)


Gravity model


The analysis reveals that trade facilitation has a positive impact on trade
flows, with different measures having a quantitatively different effect. If all
the Trade Facilitation Indicators, corresponding to the main policy areas
under negotiation at the WTO, are added within the same regression, their
cost reduction potential would reach almost 12% of trade costs for low
income countries.




57Trade Facilitation from an African Perspective


Annex


Annex 2: Input-Output Coefficient Table
Table 2: Total Input-Output Coefficients, Five African Regions (2007) ( USD Million)


Northern Africa 


 Sectors Agri Food NRGM Manuf Services


Intermediate Inputs          


Agri Imports 0.023 0.080 0.000 0.003 0.002


Food Imports 0.008 0.053 0.000 0.001 0.005


NRGM Imports 0.010 0.006 0.035 0.024 0.011


Manuf Imports 0.031 0.052 0.031 0.231 0.078


Services Imports 0.006 0.011 0.010 0.026 0.021


   
Agri Domestic 0.164 0.251 0.000 0.021 0.010


Food Domestic 0.008 0.091 0.000 0.005 0.015


NRGM Domestic 0.033 0.022 0.243 0.086 0.081


Manuf Domestic 0.030 0.038 0.020 0.195 0.087


Services Domestic 0.069 0.102 0.078 0.140 0.274


Factors Inputs          


1 Land 0.067 0.000 0.000 0.000 0.000


2 UnskLab 0.315 0.068 0.026 0.070 0.100


3 SkLab 0.016 0.048 0.020 0.043 0.131


4 Capital 0.194 0.159 0.376 0.145 0.169


5 NatlRes 0.000 0.000 0.149 0.006 0.000


Western Africa


 Sectors Agri Food NRGM Manuf Services


Intermediate Inputs          


Agri Imports 0.004 0.015 0.000 0.004 0.000


Food Imports 0.002 0.041 0.000 0.001 0.006


NRGM Imports 0.005 0.003 0.052 0.013 0.026


Manuf Imports 0.036 0.016 0.041 0.111 0.127


Services Imports 0.003 0.010 0.018 0.017 0.042


   
Agri Domestic 0.046 0.262 0.000 0.027 0.006


Food Domestic 0.002 0.055 0.000 0.003 0.010


NRGM Domestic 0.001 0.006 0.071 0.032 0.029


Manuf Domestic 0.010 0.030 0.012 0.097 0.052


Services Domestic 0.075 0.156 0.049 0.201 0.221


Factors Inputs          


1 Land 0.096 0.000 0.000 0.000 0.000


2 UnskLab 0.549 0.056 0.011 0.087 0.106


3 SkLab 0.023 0.177 0.023 0.083 0.214


4 Capital 0.128 0.140 0.458 0.178 0.148


5 NatlRes 0.000 0.000 0.195 0.030 0.000




58 Trade Facilitation from an African Perspective


Annex


Eastern Africa 
 Sectors Agri Food NRGM Manuf Services


Intermediate Inputs          


Agri Imports 0.005 0.012 0.000 0.003 0.000


Food Imports 0.003 0.022 0.001 0.003 0.005


NRGM Imports 0.005 0.003 0.057 0.016 0.026


Manuf Imports 0.046 0.036 0.081 0.103 0.111


Services Imports 0.006 0.014 0.052 0.023 0.067


     
Agri Domestic 0.061 0.140 0.001 0.014 0.006


Food Domestic 0.021 0.176 0.002 0.015 0.027


NRGM Domestic 0.010 0.006 0.127 0.043 0.023


Manuf Domestic 0.031 0.058 0.054 0.100 0.061


Services Domestic 0.088 0.149 0.259 0.225 0.267


Factors Inputs          


1 Land 0.089 0.000 0.000 0.000 0.000


2 UnskLab 0.430 0.091 0.055 0.124 0.108


3 SkLab 0.039 0.048 0.042 0.064 0.125


4 Capital 0.105 0.195 0.099 0.149 0.156


5 NatlRes 0.000 0.000 0.067 0.018 0.000


Southern Africa 


 Sectors Agri Food NRGM Manuf Services


Intermediate Inputs          


Agri Imports 0.003 0.022 0.000 0.000 0.000


Food Imports 0.004 0.019 0.000 0.001 0.001


NRGM Imports 0.010 0.002 0.195 0.019 0.010


Manuf Imports 0.044 0.019 0.028 0.109 0.067


Services Imports 0.011 0.009 0.009 0.009 0.009


   
Agri Domestic 0.031 0.153 0.000 0.001 0.001


Food Domestic 0.073 0.112 0.000 0.005 0.005


NRGM Domestic 0.048 0.007 0.156 0.021 0.033


Manuf Domestic 0.127 0.074 0.053 0.311 0.121


Services Domestic 0.202 0.382 0.138 0.317 0.307


Factors Inputs          


1 Land 0.059 0.000 0.000 0.000 0.000


2 UnskLab 0.110 0.055 0.078 0.061 0.097


3 SkLab 0.043 0.036 0.037 0.042 0.133


4 Capital 0.229 0.105 0.242 0.099 0.216


5 NatlRes 0.000 0.000 0.040 0.002 0.000




59Trade Facilitation from an African Perspective


Annex


Central Africa


 Sectors Agri Food NRGM Manuf Services


Intermediate Inputs          


Agri Imports 0.001 0.005 0.000 0.001 0.000


Food Imports 0.005 0.018 0.000 0.007 0.006


NRGM Imports 0.001 0.002 0.004 0.008 0.014


Manuf Imports 0.032 0.023 0.046 0.072 0.096


Services Imports 0.007 0.025 0.043 0.034 0.099


     
Agri Domestic 0.046 0.082 0.001 0.009 0.003


Food Domestic 0.023 0.108 0.001 0.015 0.013


NRGM Domestic 0.009 0.008 0.076 0.049 0.024


Manuf Domestic 0.032 0.165 0.042 0.072 0.045


Services Domestic 0.068 0.147 0.165 0.275 0.305


Factors Inputs          


1 Land 0.072 0.000 0.000 0.000 0.000


2 UnskLab 0.257 0.041 0.050 0.072 0.058


3 SkLab 0.038 0.029 0.037 0.029 0.089


4 Capital 0.108 0.194 0.296 0.148 0.220


5 NatlRes 0.000 0.000 0.203 0.029 0.000


Source: GTAP Africa 2 and GTAP 8.1 Data Base




60 Trade Facilitation from an African Perspective


Annex


Annex 3: African Regional and Sub-Regional Treaties and
Conventions on Transit Transport
Table 9: Africa Regional Treaties and Conventions on Transit Transport


Instrument Year Key Issues


OAU Addis Ababa
Charter


1963 Initial signature by 32 governments, with South Sudan becoming the 55th member in July 2011. Article II
aims, inter alia, “to promote international co-operation, having due regard to the Charter of the United
Nations and the Universal Declaration of Human Rights”, and calls upon the Member States to co-ordinate
and harmonize their general policies, especially in the fields economic co-operation, including transport
and communications.


Monrovia
Declaration


1979 In pursuit of the objectives of the New International Economic Order, the OAU “Council committed to
implement completely the programme of the United Nations Transport and Communications Decade in
Africa.”


Lagos Plan of
Action


1980 Called for the creation of an African Common Market by 2000, and in this regard assigned to the Regional
Economic Communities the objective: “.. to reinforce effectively sectoral integration in transport.”


Abuja Treaty
Establishing the
African Economic
Community (AEC)


1991 The policy objectives include: “To promote economic, social and cultural development as well as integration
of African economies”, including in the area of trade and transport, “the harmonization of policies …. and
removal of obstacles to movement of persons, goods and services, with special measures for the landlocked
countries”.


African Maritime
Transport Charter


1993 Chapter VII on issues of Landlocked Countries. Transit Partner States agree to grant facilities and benefits
to landlocked countries and to apply non-discriminatory administrative, fiscal and Customs measures. They
agree to coordinate their policies of acquisition and use of land, river, air and maritime transport and port.
They are encouraged to enter into bilateral and multilateral conventions on transit and to ratify those in
force.


African Union 2002 Transformed OAU into AU. The objectives contained in the Constitutive Act, include “Promote sustainable
development at the economic, social and cultural levels as well as the integration of African economies.”


NEPAD 2002 Establishment of AU) was accompanied with the formulation of the New Partnership for Africa’s Develop-
ment (NEPAD) as the new framework for economic and social development of Africa and the achievement
of the MDGs in Africa. RECs remain the anchor of regional mechanisms for achieving the African Union
programs, and continue to place priority on enhancing interconnectivity and facilitating trade by focusing
on transport corridors as microcosms of integration and spatial development on the continent.


African Maritime
Transport Charter


2009 Update of the 1993 Charter and a call to include it in the national legislations. It calls for emphasis on
cooperation between LLDC and Transit States, development of Multimodal Transport, Ports and ICT
applications.





61Trade Facilitation from an African Perspective


Annex


Table 10: Africa Sub-Regional Treaties and Conventions on Transit Transport – East and Southern Africa


Instrument Year Key Transit Transport Issues


Treaty establishing the Com-
mon Market for Eastern and
Southern Africa (COMESA)
Members: 20 States in Eastern
Africa and Indian Ocean
Islands.


1993 Replaces
1991 PTA Treaty


Provisions cover all modes of transport and articulated in several protocols for
implementation:
i. Protocol on Transit Trade and Transit Facilities
ii. Protocol on Third Party Motor Vehicle Insurance
iii. Single Carrier License


Djibouti Agreements on the
Inter-Governmental Author-
ity for Development (IGAD)
Members: Djibouti, Eritrea,
Ethiopia, Kenya, Sudan,
Uganda


1986 IGADD
Treaty
Amended in 1996


Treaty Article 13A regards trade, facilitation and transport as follows:
i. Work towards the harmonization of trade policies and practice and the elimination


of tariff and non-tariff barriers
ii. Harmonization of transport policies and elimination of physical and non-physical


barriers.
IGAD has joined the COMESA-EAC-SADC Tripartite for coordination of infrastructure
development.


Treaty Establishing the East
African Economic Commu-
nity (EAC). Members: Kenya,
Tanzania, Uganda, Rwanda,
Burundi


1999 Treaty
Amended
in 2006 Modi-
fied in
2007


Chapter 15: Cooperation in infrastructure and services where Partner States shall
take steps to:
i. Develop harmonized standards and regulatory laws, procedures and practices;
ii. Construct , maintain, upgrade, rehabilitate and integrate roads, railways, airports,


pipelines and harbours in their territories;
iii. Review and re-design their intermodal transport systems and develop new routes


within the Community for the transport of the type of goods and services produced
in the Partner States;


iv. Maintain, expand and upgrade communication facilities to enhance interaction be-
tween persons and businesses in the Partner States and promote the full exploitation
of the market and investment opportunities created by the Community;


v. Grant special treatment to land-locked Partner States in respect of the application of
the provisions of this Chapter;


vi. Provide security and protection to transport systems to ensure the smooth move-
ment of goods and persons within the Community;


vii. Take measures directed towards the harmonisation and joint use of facilities and
programmes within their existing national institutions for the training of personnel
in the field of transport and communications; and


viii. Exchange information on technological developments in transport and
communications.


Southern African Customs
Union Agreement (SACU)
Members: South Africa, Na-
mibia, Botswana, Swaziland,
Lesotho.


1910 Agreement
Amended in 1969
Updated in
2002


Objectives include:
i. Promotion of integration of SACU members in the global economy with develop-


ment of common policies
ii. Facilitation of cross-border movements of goods.


Southern African Develop-
ment Community (SADC)
Members: 14 States in South-
ern Africa and Indian Ocean
Islands.


1980 SADCC
Treaty Amended
in 1992 SADC
Windhoek Treaty
Amended in 2001


Transport, Communications and Meteorology Protocol of 1996 outlines specifics by
mode:
i. Road Infrastructure
ii. Road Transport
iii. Railways
iv. Maritime and Inland Waterway Transport
v. Civil Aviation
vi. Watercourses and Lakes




62 Trade Facilitation from an African Perspective


Annex


Table 11: Africa Sub-Regional Treaties and Conventions on Transit Transport – Central and West Africa


Instrument Year Key Transit Transport Issues


Treaty of Gisenyi
establishing Economic
Community of the
Great Lakes Countries
(CEPGL)


1982 Members: DRC, Rwanda, Burundi
Agreement on Trade and Customs Cooperation, and Protocols on Transit and Transport
Standards:
i. Identification of inter-States Corridors
ii. Rules regulating vehicle axle loads and dimensions
iii. Third Party Liability Insurance


Treaty of Libreville
establishing Economic
Community of Central
African States (ECCAS)


1983


Members: All 12 States in Central Africa region
Treaty covers two aspects of transport development and facilitation:
i. Promote integration of infrastructure
ii. Harmonize and standardize legislation and regulations
iii. Promote transport coordination
iv. Reorganize railway networks for interconnectivity
v. Develop sub-regional joint shipping lines, river transport companies and airlines
vi. Grant freedom of transit
vii. No import duties on transit traffic
viii. Transit and warehousing facilitation for LLDCs
ix. Non discrimination against transit traffic


Treaty of Ndjamena es-
tablishing Central Africa
Economic and Monetary
Community (CEMAC)


1998 Members: Cameroon, CAR, Congo Republic, Gabon, Chad, Equatorial Guinea
Codes and Regulations on transport include:
i. River Navigation Code
ii. Road Transport of Hazardous Goods
iii. Merchant Shipping Code
iv. Road Traffic Code


Treaty establishing the
Economic Community
of West African States
(ECOWAS)


1975 Modified
in 2003 and
2005


i. Convention on Interstate Road Transport (covers designation of Community Roads, sets
limits on vehicle axle-load and dimensions, requirements for third party insurance and
vehicle licensing)


ii. Harmonization of Highway Legislation
iii. Convention and Other Instruments on Inter-State Road Transit Goods
iv. Supplementary Convention on Guarantee Mechanism for Inter-State Road Transit
v. Convention on Temporary Importation of Passenger Vehicles into Partner States
vi. Protocol Establishing an Insurance Brown Card
vii. Instruments on Road Safety and Accident Prevention
viii. Directive on Road Charges
ix. Transport and Transit Facilitation Instruments:


a. Regional Road Transport and Transit Facilitation Programme in Support of Community
Trade and Cross-Border Movements (2003)


b. Decision on Maritime Transport
c. Decision on Establishment of Facilitation Committees on Road Transport and Transit


and Committees on Management of Cross-Border Corridors.
Treaty Establishing
West African Economic
and Monetary Union
(UEMOA)


1994
Treaty Modi-
fied in 2003


Members: Benin, BF, CI, Guinea Bissau, Mali, Niger, Senegal, Togo.
Transport Instruments – Regulations on Road Transport:
i. Harmonization of laws and procedures of inspection of the size of trucks (2005)
ii. Modalities to implement the regional plan of inspection of Inter-States Road Axis (2005)
iii. Decreasing of Inspection Points on Inter-State Roads (2006)
iv. Regional Committee on Road Safety (2009)
v. Harmonization of strategies for Road Maintenance and establishment of Road Maintenance


Fund (2009)




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