African countries losing 5 per cent revenue to inefficient border procedures

Revenue losses from inefficient border procedures in some African countries are estimated to exceed 5% of the Gross Domestic Product, this is according to oundtable Conference on Trade Facilitation (TF) held at the EAC Headquarters in Arusha, Tanzania, has heard.

Citing a 2013 Organization for Economic Cooperation and Development (OECD) study, Mr. James Kisaale, an Assistant Commissioner with the Uganda Revenue Authority, said that reducing global trade costs by 1% would increase worldwide income by more than US$40 billion, with developing countries being the biggest beneficiaries.
Kisaale said the areas that would contribute the most to lowering trade costs in Sub-Saharan Africa were formalities, namely automation, the simplification and harmonisation of documents, and information availability.

Kisaale was speaking during the opening session of the one-day roundtable on trade facilitation which brought together EAC Development Partners as well as Customs and Trade experts from the EAC Secretariat and Partner States’ Ministries of Trade.

The EAC Secretariat organised the Roundtable Conference to review and fast-track the implementation of the World Trade Organization (WTO) Agreement on Trade Facilitation (TFA). The Conference brought together Development Partners who will work with the EAC in the implementation of the TFA.

Opening the roundtable, the EAC Director General (DG)-Customs and Trade, Mr. Kenneth Bagamuhunda, said that TF was an integral part of the EAC Customs Union Protocol which explicitly provides for reduction in the number and volume of trade documents.

“TF also provides for the adoption of common standards of trade documentation and procedures, coordination and facilitation of trade and transport activities. There is also the reviewing of procedures adopted in international trade and transport facilitation with a view to simplifying and adopting them for use in the EAC,” said the Bagamuhunda.

The DG disclosed that an EAC Trade and Facilitation Sub-Committee has been established to, among other things, supervise the implementation of the WTO TFA at regional and national levels.

He said that Regional and National Implementation Plans for the WTO TFA have been finalized and adopted by the Policy organs.

“Amendments of regional laws, regulations and procedures; development of project proposals for resource mobilization, and; sensitization of stakeholders is currently underway,” added the DG.

He cited the Single Customs Territory (SCT) and the interconnectivity of customs systems among some of the key TFA components that have been implemented by the EAC.
“The SCT provides for the free circulation of goods, reduces cost of doing business, reduces Non-Tariff Barriers, ensures competitiveness, boosts business predictability and promotes investment,” he said, adding that SCT is premised on the use of electronic systems.

Other components already implemented are: the establishment of One-Stop Border Posts; harmonisation of standards, reduction of Non-tariff barriers, and; publication of the EAC Trade and Investment report.

Speaking at the forum, Amb. Arthur Mattli, Switzerland’s Representative to the EAC, said that his country believes that bureaucratic delays and ‘red tapes’ pose an unnecessary and expensive burden for moving goods across borders for traders.

Amb. Mattli said the TFA would help developing countries diversify their exports and tap into global value chains.

He disclosed that Switzerland had so far disbursed US$3.5 million as part of its contribution to the TFA’s Trade Facilitation Support Programme, a multi-donor programme of the World Bank Group’s Trade and Competitiveness Global Practice which provides support for countries seeking assistance in aligning their trade practices with the WTO TFA.

“Every country is eligible to receive support under the programme. Eligible countries are expected to have demonstrated a strong commitment to implementing trade facilitation reforms in the areas covered by the WTO TFA. Moreover, the support programme will prioritize assistance to countries with other limited access to other donor support,” said Amb. Mattli.