technical report: integrated border management (ibm ... usaid southern africa trade hub list of...

DISCLAIMER

The author’s views expressed in this publication do not necessarily reflect the views of the United States Agency for International Development or the United States Government.

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www.satradehub.org

Technical Report:

Integrated Border Management (IBM) - BOA Mwanza/Zobue

Work Plan Activity: 1.2.2 I

Magdeline Mabua, Transit Specialist Agnes Katsonga-Phiri, Customs Consultant

Lawrence Kubanga, Monitoring & Evaluation Specialist Nomasomi Mpofu, Gender Integration Specialist

Submitted by: AECOM International Development

Submitted to: USAID/Southern Africa

August 2011

USAID Contract No. 674-C-00-10-00075-00

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USAID Southern Africa Trade Hub

TABLE OF CONTENTS

TABLE OF CONTENTS ....................................................................................................... 1

LIST OF ACRONYMS.......................................................................................................... 3

EXECUTIVE SUMMARY ..................................................................................................... 4

1. INTRODUCTION .......................................................................................................... 6

2. BACKGROUND ............................................................................................................ 6

3. OBJECTIVES ............................................................................................................... 7

4. SCOPE OF WORK ....................................................................................................... 7

5. METHODOLOGY ......................................................................................................... 7

1. ...................................................................................................................................... 8

2. 5.1 Border Operations Assessments ......................................................................... 8

3. ...................................................................................................................................... 8

4. 5.2 Baselines............................................................................................................. 8

6. FINDINGS .................................................................................................................... 9

5. 6.1 Border Operations Review .................................................................................. 9

5.1. 6.1.1 Border Operation Hours .......................................................................... 9

5.2. 6.1.2 Role of Different Agencies at Mwanza Border ......................................... 9

5.3. 6.1.3 Challenges Affecting Efficient Operation by Agencies .......................... 13

5.4. .............................................................................................................................. 14

5.5. 6.1.4 Fees charged truckers by different public and private agencies ............ 14

5.6. 6.1.5 Clearing Process for Commercial Goods at Mwanza Border ................ 14

5.7. .............................................................................................................................. 14

5.8. 6.1.6 Challenges with Clearing Process at Mwanza ...................................... 17

5.9. .............................................................................................................................. 17

5.10. 6.1.7 Clearing Process at Zobue ................................................................... 18

5.11. 6.1.8 Agricultural products Traded Through Mwanza/Zobue......................... 19

5.12. 6.1.9 Informal Cross Border Trade ................................................................. 19

6. .................................................................................................................................... 20

7. 6.2 Baselines – Crossing Times .............................................................................. 20

8. 6.3 Summary of Challenges/ Constraints ................................................................ 21

9. 6.4 Recommendations ............................................................................................ 22

10. .................................................................................................................................. 23

7. WAY FORWARD ........................................................................................................ 24

ANNEX 1: .......................................................................................................................... 25

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LIST OF ACRONYMS

ASYCUDA Automated System for Customs Data

BOA Border Operations Assessment

CFAs Clearing and Forwarding Agents

COMESA Common Market for Eastern and Southern Africa

DTI Direct Trader Input

IBM Integrated Border Management

ICBT Informal Cross Border Trader

ICT Information and Communication Technology

IHB International Haulage Brokers

JBC Joint Border Committee

MBS Malawi Bureau of Standards

MERA Malawi Energy Regulatory Authority

MK Malawi Kwacha

MRA Malawi Revenue Authority

PIL Petroleum Importers Ltd.

SADC Southern African Development Community

SATH Southern Africa Trade Hub

STR Simplified Trade Regime

T1 Transit Document

TIP Temporary Import Permit

OSBP One Stop Border Post

USAID United States Agency for International Development

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EXECUTIVE SUMMARY

The high cost of exporting and importing goods to, from and within Southern Africa discourages international trade, makes commerce and industry less competitive and contributes to food insecurity. Some of the main contributors to the high cost of trade are delays at the border posts. The main aim of the IBM program is to reduce the time goods take to cross borders and therefore reduce the cost of trade. As one of the initial steps in the implementation of the IBM, SATH conducted a border operations assessment (BOA) at the Mwanza/Zobue border, a border between Malawi and Mozambique on 20 - 24 June 2011.

The primary purpose of the BOA was to analyze what the current border operations are with respect to clearance of commercial goods, with a view of making recommendations that would reduce the time and cost of transportation of goods and to set time baselines to assess the impact of IBM recommendations. In recognition of the critical role played by informal traders in the SADC region’s economies, the border assessment also covered the clearance procedures of goods for small traders/ informal cross border traders (ICBTs).

The assessment involved interviewing both public and private agencies at Mwanza and Zobue borders to understand their roles and processes they follow in the clearance of commercial goods. Recommendations however are only made with regards to Mwanza border which is one of the borders identified by SATH for the IBM Project. To understand processes for clearance of goods for small traders, interviews with customs officials responsible for clearing small value consignments were conducted as well as randomly selected interviews with traders as their goods were being assessed. To establish time baselines, data collectors were used to record truck entry and exit times at the border or customs documents for trucks cleared while parked away from the border.

Findings of the BOA identified among others are the following:

Uncoordinated work between border agencies leading to duplication of activities;

Unharmonized working hours for border agencies within the border

No sharing of information between border agencies

Lack of facilities for remote filing by CFA results in long queues at the DTI hence delays the clearance process

Lack of traffic segregation to fast track empty trucks, tankers, buses, or transit cargo

Risk analysis profiles are not adhered to and as such almost all goods are inspected

Lack of information by small traders on issues relating to agencies’ processes and requirements, rebates, tariffs as well as trade instruments.

Procedure for TIPs for commercial trucks requires physical examination of a truck

On average trucks entering Malawi from Zobue took 6 hours 35 minutes to cross the Mwanza border into Malawi. This time is inclusive of clearance time and any other miscellaneous delays. Commercial trucks exiting Malawi take an average of 3 hours 35 minutes to cross the Mwanza border and 19 minutes to cross Zobue into Mozambique.

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Key recommendations from the BOA were to establish a Joint Border Committee (JBC) that includes representatives from public and private sector agencies and that a JBC Action Plan should be developed to address the identified challenges.

SATH, in collaboration with the Malawi Government (Ministry of Trade), will hold a national workshop as well as a workshop at Mwanza border to bring together key stakeholders in border operations to share with them the Border Operations Assessment findings. The findings and recommendations are inputs in the development of an Action Plan for the Joint Border Committee to be established to address challenges found, that will be implemented with assistance of SATH and other donors.

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1. INTRODUCTION

The USAID Southern Africa Trade Hub (SATH) is a regional project working to increase international competitiveness, intra- regional trade and food security in the SADC region. SATH aims to improve trade facilitation in transit and customs processes through improved and streamlined customs processes and procedures, transport corridors, and transit systems. To support SADC in its effort of reducing high cost of transport in the region, SATH is embarking on an initiative called the Integrated Border Management (IBM) Program which aims at improving border management efficiency to reduce the time and cost for goods crossing the borders. As one of the initial steps in the implementation of IBM, SATH is conducting border operations assessments to understand the border clearance processes as well as challenges border agencies face in executing their work, with the aim of working with the border agencies and their governments to address these challenges.

2. BACKGROUND

Several studies have been conducted in the region by various institutions, including the World Bank, which established that the high cost of exporting and importing goods to, from, and within the Southern Africa region discourages international and intra-regional trade, makes commerce and industry less competitive, and contributes to food insecurity. The ports and border post delays have been identified to contribute significantly to the high cost of transportation in the region. A 2010 World Bank Report on Africa’s infrastructure highlighted that the cost of delays for an eight axle interlink truck has been estimated at about US$300 a day. It is further reported that it takes an average of 8 days to complete a journey of 2,500 kilometers from Lusaka, Zambia to Durban, South Africa and that out of the 8 days, 4 days are spend at border crossings. From this example, this means that the private sector bears a direct financial burden of US$1,200 for clearing time at the borders. While not all of this time and related cost can be eliminated, it can be reduced.

In addition to the formal sector, the informal sector is affected by delays at the borders. Decreasing rates of employment in the public and private sectors and formal sector retrenchments have resulted in many people in the region seeking alternative ways of earning a living. Informal Cross Border Trade (ICBT) has become an important means of employment and income generation. Statistics have shown that a significant amount of trade is by small traders. For women especially, ICBT enhances economic empowerment.

To improve management efficiency at the borders and improve trade facilitation in the region, SADC is promoting the establishment of Integrated Border Management (IBM), One Stop Border Post (OSBP) and Single Windows at both national and regional levels. SATH is prioritizing the implementation of the IBM Program in realization of the fact that other initiatives such as OSBP and Single Window will take longer to implement due to the legislative and physical infrastructure requirements. IBM is expected to bring quicker results and would lay a good foundation for these other initiatives by ensuring there is coordination amongst border agencies for effective and efficient border clearance procedures. Conducting a Border Operations Assessment (BOA) is the first stage in the IBM process. This is followed by workshops to disseminate and discuss the BOA findings and to form a Joint Border Committee (JBC) consisting of public- and private- sector stakeholders and to arrive at consensus on an Action Plan. Implementation of the JBC Action Plan with assistance from the SATH and other donors is the ultimate aim of the IBM program.

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3. OBJECTIVES

The primary purpose of undertaking the BOA at Mwanza/Zobue is to analyze what the current border operations are with a view of making recommendations that would reduce the time and cost of transporting goods. These recommendations will inform the development of a JBC Action Plan by the stakeholders and to set time and cost baselines which will be used to assess the impact of the implementation of the Action Plan. Specific objectives for the assessment are as follows:

Establish baselines for the time trucks take to pass through Mwanza and Zobue borders by gathering arrival and departure times of trucks at border complex entry and exit gates; as well as time it takes informal cross border traders to clear the border.

Establish if time spent at border posts is a result of clearance procedures or other reasons;

Identify specific issues that impede the free movement of general cargo across borders including informal cross border trade;

Identify specific requirements/challenges that impede the free movement of agricultural products and staple food crops across borders;

Identify current processes of addressing problems experienced by border agencies;

Identify current mechanisms of communication between border agents and assess their effectiveness;

Assess the adequacy of the infrastructure (parking, access roads, electricity, water, telecommunications, buildings, inspection sheds and other requisite infrastructure) at the border;

Recommend practical and achievable measures to promote seamless operations at the borders to reduce time and costs for goods crossing borders.

4. SCOPE OF WORK

This assessment was undertaken at Mwanza/Zobue border complexes which form the border between Malawi and Mozambique. The assessment focused documenting the roles and processes of different agencies operating at Mwanza and Zobue borders in clearing commercial trucks and informal cross border traders and producing an assessment of the operations at the Mwanza border1. It also focused on establishing border crossing time baselines.

5. METHODOLOGY

SATH travelled to Mwanza/Zobue borders between 20 and 24 June 2011 to assess the processes for clearance of goods and to determine the time it takes trucks to clear the border as the first step in IBM implementation. In recognition of the critical role played by Informal traders in the SADC region’s economies, the border assessment exercise also

1 Although this document focuses on analyzing and making recommendations for operations at Mwanza, documentation

of processes was done for both Mwanza and Zobue to better understand these processes.

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covered the clearance procedures of goods for small traders/ informal cross border traders (ICBTs).

5.1. Border Operations Assessments

Interviews were guided by a questionnaire with a set of questions classified under the categories of coordination, clearing processes, infrastructure, agricultural products, informal traders, weighbridges and general issues. The names and contacts of officials interviewed are attached as Annex A, and the questionnaire used to guide discussions is attached as Annex B.

Interviews were conducted with public sector agencies and the private sector to determine what role they played in the clearance of goods, challenges they faced in effectively executing their operations and how they felt things should be improved. In addition, the SATH team recorded independent observations of the processes and to a lesser extent the facilities and infrastructure. In Zobue, only Customs, Insurance and Health were interviewed to understand the process flow at this border complex as these were seen as key to understanding the clearance of goods at Mwanza. In any case, very few agencies operate at Zobue border as most of the goods are cleared inland at Tete. More agencies were interviewed in Mwanza where there are more agencies such as Malawi Revenue Authority (MRA), Malawi Bureau of Standards (MBS), Ministry of Health, Department of Fisheries, Department of Forestry, Agriculture Research, Veterinary, Immigration, Road Traffic Directorate, Road Fund, Immigration and private sector agencies such as Petroleum Importer’s Limited and the representative of the Clearing and Forwarding Agencies.

To understand processes for clearing goods for small traders, interviews with customs officials responsible for clearing small value consignments were conducted. Interviews were also randomly done with selected traders as their goods were being assessed by Customs Officials at both Mwanza and Zobue. Informal transporters, clearing agents, bus drivers and conductors were also interviewed. Interviews were granted on condition the identity of the informants was not noted or revealed in any report. In addition, the average time it took to cross the border, customs procedures that traders were subjected to and modes of transporting goods by small traders were observed.

5.2. Baselines

To establish time baselines for trucks crossing through these borders, quantitative data specifying arrival and departure times at both Mwanza and Zobue was collected. Through this data, volumes of traffic across the borders, types of goods transported and times taken to cross the borders were determined. Data was collected over a five day period.

Data collection entailed both observation of cargo trucks and recording of several details of interest regarding clearance and crossing of the borders. Data collection instruments were designed after preliminary interviews with Customs authorities at the borders to determine the process flow of goods clearance. At both borders, data was collected on the registration particulars of the truck, types of goods transported, whether the cargo was being exported, imported or in transit (both transit through the country and transit for clearance in-land), arrival date and time, departure date and time. These details were collected in forms tailored for the clearance process flow and infrastructure at Zobue and Mwanza borders. The forms were revised on site to accurately capture the flow of traffic

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according to the design of each border and therefore points of data capture varied between the adjacent borders due to the differences in border design and operations.

Zobue border

Zobue border is not fenced and therefore there is no entry and exit gate. Drivers park their trucks on the side of the road near the border office whilst they do border formalities and thereafter drive to the entry/exit barrier when clearance process is finalized. Entry data was therefore collected as they parked on arrival and exit data at the barrier as they departed.

Mwanza border

All traffic is controlled at entry and departure gates (perimeter gates) and at a middle barrier in front of the customs building. Actual arrival and departure times were recorded along with type of cargo as the trucks went through the perimeter gates. Customs and other agencies processing time could not be separated as the data collected was from the time of arrival of the trick at the border to the time of departure. This therefore includes both processing time and any other miscellaneous delays by drivers or importers.

6. FINDINGS

6.1. Border Operations Review

6.1.1. Border Operation Hours

The border operating hours shown in Table 1 below are based on the official times Customs and Immigration open and close the borders. Some of the agencies at Mwanza who are involved in the clearance of goods are not aligned to the business hours for Immigration and Customs but rather are in line with the normal operations of their offices inland, for example from 07:30hrs to 17:00hrs. This creates potential for delaying the clearance for goods which have to clear other agencies before they can be cleared by Customs.

Table 1: Customs/Immigration Border Opening Hours

Opening Closing

Zobue 06:00hrs 21:00hrs

Mwanza 06:00hrs 21:00hrs

6.1.2. Role of Different Agencies at Mwanza Border

Apart from the customs authorities collecting duties and taxes on imports at the borders, there are a number of public agencies who are mandated to ensure the safety and quality of goods imported to a country. It was established that whereas some of these agencies are there to enforce controls on imported products, some are there to collect data for government statistics e.g. MERA. A brief description on the roles and processes of the agencies operating at Mwanza is outlined below.

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All these public agencies rely on CFAs to bring documents to their offices for clearance before they proceed to clear with Customs.

Agricultural Research

The role of the Agricultural Research office at Mwanza is to inspect agricultural products, both imports and exports, to ensure they are free from pests and diseases. Documents required for clearance are a phyto-sanitary certificate, fumigation certificate and an import permit for imports or export permit for exports. Importers need to apply for the import permit from the Ministry of Agricultural Research in Lilongwe. The phyto-sanitary certificate is issued at Bvumbwe Research Office. The agency requires that agricultural products are cleared first with them before they complete the customs clearance. CFAs bring documents to the Agriculture office and officers check to ensure documents are in order; when satisfied, the officer puts a stamp and signs the document. The officers also collect samples and send them for testing inland as there are no laboratories for testing at the border. When this is done, the consignment is allowed to proceed and if the samples fail the test, entry would be denied for consequent consignments from the same source. While Agriculture officers depend on CFAs to bring consignments to their office for checking, Agriculture officers also do their own surveillance at the car park as trucks arrive to detect goods they need to control

Veterinary

The Veterinary’s role at the border is to control diseases on livestock (both imports and exports) and livestock products, e.g. skin hides. The Agency also controls the importation and exportation of animal drugs. Examples of products controlled are milk, eggs, and meat (dry and fresh).

Authorities at the border check to ensure that importers or exporters have the required documentation. An importer needs to produce an Import License issued by the Ministry of Agriculture in Lilongwe; an exporter needs to produce an Export License and a Veterinary Health Certificate. A Veterinary Health Certificate is issued per consignment at a cost of MK5,000 (US$33) and is valid for 21 days. An Export License is an annual license issued at a cost of MK12,000 (US$80).

When satisfied with the documentation, Veterinary officials sign the documents and put a stamp to show their endorsement.

Forestry

Forestry’s role at Mwanza border is to ensure that timber exports as well as products of wood have the relevant documentation for exportation. Exporters should have an Export Permit before arriving at the border. The permit is issued at the Regional Forestry Office in Lilongwe at a cost of MK5,000 (US$33) per truck and is valid for 21 days from the date of issue. Exporters should also have an Annual Export License which costs MK10,000 (US$67). The application fee for the Export license is MK2,000 (US$13). In addition to the permits, the exporter needs to have a phyto-sanitary certificate which is issued from the farm where the products originate by the Forestry Research Institute of Malawi in Zomba. The phyto-sanitary certificate is issued per trip.

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The Forestry Department at Mwanza does not have their own office and therefore do not determine their working hours which are left to be determined by the owners of the office whom they are sharing space with. Whilst officials depend on CFAs to submit to their office declarations for goods items under their control, Forestry officers also do their own surveillance at the car park, and conduct a physical check at the barrier gate before trucks leave Malawi.

Malawi Bureau of Standards

The role of this Agency is to monitor the quality of controlled goods by the Bureau coming into Malawi. All food products, e.g. milk, salt and some identified electronic products, are monitored.

Checks included checking for labels, expiry dates as well as collecting samples for testing. While samples are collected for testing, the actual test is not done at the border but sent to a laboratory in Blantyre.

For goods that are customs cleared at the border, the samples are collected when MRA is carrying out its inspection while for those that are to be cleared inland, samples will be collected by MBS officers inland

The MBS does not get involved in the clearance of transit goods as their concern is to ensure the quality of goods destined for Malawi meet the required set standards for Malawi. Fees applicable have to be paid upfront and to ensure that, there is an MBS officer at the exit barrier to check that fees have been paid before going into Malawi.

Ministry of Health

The Ministry of Health monitors imports of fortified foods, e.g. salt, cooking oil wheat/maize flour and medicines coming from other countries. They provide MRA with a list of medicines that are not allowed or banned. The Ministry of Health is also charged with the assessment of persons crossing the border to ensure they are free from communicable diseases and is also responsible for sanitation at the border.

The process for checking foods involves for example the testing of iodine in salt whose results are instant. Once testing has been done, the inspector issues a certificate. This service is done at no cost.

Regarding other food products, samples are taken and sent to the regional office for testing. The truck is allowed to pass after samples have been collected as the results take a while to be processed. If a consignment fails testing on first and second testing, the results are communicated to the importer and on the third time of consecutive test failure, imports are not allowed to come into Malawi. Other checks include checks for expiry dates and whether the importer is registered and has the relevant certificates.

Malawi Energy Regulatory Authority (MERA)

MERA’s role at the border is to monitor all energy imports into Malawi. The Agency records the volumes of imports, their origins and destinations for government statistics. Products monitored include petrol, coal, gas, lubricants, and small electrical equipment such as switches, lights and sockets. MERA also compiles statistics on exports of coal. The Agency then consolidates a report and submits it to head office on a monthly basis.

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Road Traffic Directorate and Safety Services

This Agency’s role is to weigh the vehicles to ensure they meet the maximum weight standards of Malawi roads. It was noted that the weighbridge had been out of service for about 6 months and no weighing had been done for that period, however trucks are still required to go through the weighbridge for officials to collect vehicle data for government statistical purposes.

When the weighbridge is operational, all trucks coming into Malawi and exiting Malawi are weighed. If a truck is found to be overloaded but is only arriving, it will be required to offload some of its goods into another vehicle and allowed to go. If on the other hand a truck is exiting Malawi, meaning it has already used the infrastructure, a penalty will be levied. The Agency at the border however does not collect revenue and payments to be made are to be processed at Blantyre.

The agency is also responsible for the administration of abnormal load permits. Although permits are not issued at the border but at head office, there is an option for the importer to pay for the permit at the border once approval is made by head office.

Road Fund Administration

The Agency is responsible for collecting toll fees on foreign registered vehicles weighing 3000 tons and above. The toll fees are charged according to the distance and number of axles of a truck and also on a reciprocity basis for example, an additional $5 charged per axle on the current schedule on Mozambique trucks as a way of reciprocating charges on Malawi trucks by Mozambique. The Agency only accepts payment in dollars. Transit fees/toll fees are as per the charge schedule was as follows:

No of axles/ ehicle Type

COMESA Mozambique Tanzania

Multiple $15 $28 $16

Up to 3 axles $8 $28 $8

Buses $6 $28 $6

Saloons & Pick ups $20 $20 $20

Petroleum Importers Limited (PIL)

PIL is a private Agency formed by a consortium of different oil companies (Puma, Total, Engene and Petroda) to import fuel on their behalf. The Agency imports fuel into Malawi and distributes it among these companies. The transportation of fuel is done by International Haulage Brokers (IHB).

PIL prepares declarations for fuel & submits declarations to the DTI then to Customs for processing. It was reported that on average the process of clearing a tanker takes an hour to get the release order due to the priority given to clearance of wet cargo for security reasons. PIL has a policy that no tanker should move after 18hours.

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Clearing and Forwarding Agents (CFAs)

Clearing agents are critical in the whole goods clearance processes. CFAs are licensed by MRA to transact in clearing of imports/exports through Customs on behalf of importers. CFAs charge a clearing fee to cover their bond facility and clearing services.

Clearing agents are the linking agent between the exporter/importer/driver and all the border agencies responsible for the clearance of goods at borders. When the driver arrives at the border, he contacts the clearing agent who prepares a declaration for the goods and ensures that all other agencies controlling the products endorse the documents, submits the declaration to customs and ensures that duties and other payables fees are remitted.

As noted above, all other agencies responsible for control checks depend on clearing agencies after receiving documents from drivers to bring them to their offices for them to do the necessary checking and testing where required before Customs clearance.

6.1.3. Challenges Affecting Efficient Operation by Agencies

There is lack of coordination among the agencies resulting in some duplicating checks. For example, the check on milk is done by Health, Bureau of Standards, Veterinary and Agriculture and the type of information checked is similar, e.g. expiry dates, etc. This repetition of the same check adds to the time the truck spends at the border. There is also no structured system of sharing information among border agencies although agencies such as MRA, MBS, Agriculture and Health need to access similar information on type of consignments being cleared for them to carry out their checks. The agencies depend on CFAs to physically deliver documents for clearance from one agency to the other for their endorsement or consignment examination where required. This physical movement of documents from one agency to another is inefficient and requires manual intervention. In addition, if for any reason CFAs fail to bring documents up for required checks prior to lodging the declaration with MRA, there is the likelihood that MRA will clear goods that may not be conforming to the standards required by other agencies. To ensure that this does not happen, some agencies conduct their own surveillance of trucks at the car park and have officers who check for documents at the barrier gate to confirm that consignments have relevant documents resulting in several officers stationed at the barrier each one checking their own documentation. If there was proper coordination and information sharing amongst agencies, checks done at barrier gate could be done by one official on behalf of the rest of the other agencies.

Another challenge noted is the lack of connectivity between the headquarter offices of border agencies and the related offices at the border. In the case where a consignment arrives at the border without the required permits, the truck driver has to physically travel to the central agency office to get a permit, instead of the shipper being able to do this at the headquarters, and the border agency receiving an electronic confirmation from their headquarters which could be achieved if there was connectivity between the offices (e.g. Agricultural products permits are issued by the Ministry of Agriculture in Lilongwe which is more than 350 km from Mwanza).

Other challenges include insufficient bond facility on the part of CFAs. Importers at times negotiate with a CFA to generate an inland transit bond at the border and then assign a different CFA to clear the consignment once they have arrived inland. At times this agent may take his time in clearing goods thus delaying the release of the other clearing agent’s bond, who therefore may not be in a position to raise enough bond for new consignments. This creates knock-on delays. At times drivers are not informed of which clearing agent to

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use when they arrive at the border post and this may result in them meeting persons who are not established and may not have the required bond. These agents would then solicit to use other agents’ bonds and the negotiations add to the time delays at the border. It was also noted that at times delays were a result of importers not bringing genuine documents for declaration.

6.1.4. Fees charged truckers by different public and private agencies

Apart from the normal duties and taxes payable to Customs Authorities, the following fees are also levied on trucks as they cross the border:

- Customs Handling Fees per declaration (processing fees)

- Clearing Agents Fees per declaration

- Toll Fees paid in American Dollars

- Road Permit Fees

- Insurance Fees

- Bureau of Standard Inspection Fees

- Fumigation Certificate Fees (Agricultural products)

- Phytosanitory Certificate Fees (Agricultural Products)

- Import Permit Fees

While these fees may have an economic justification, they certainly result in higher transport operating costs, increased paperwork which further increases costs, and create the need for drivers to carry cash which is a security risk. A table showing identified fees payable is attached as Annex C.

6.1.5. Clearing Process for Commercial Goods at Mwanza Border

Imported goods are in three categories as shown below:

A Imports Cleared at the Border

B Inland Transit (Imports that move under transit and storage bond and cleared inland)

C Through Country Transit (Goods that move under bond from entry to exit border)

Imports Cleared at the Border

Drivers give documents to CFA who prepares an import declaration for the goods.

CFA attaches supporting documents to the import declaration and if products fall within the category of controlled goods2, CFA delivers the documents to the relevant authority for clearance before proceeding with customs clearance.

2 Controlled goods are those goods whose importation or exportation is regulated by some specific government

authority. These normally require special permits which are checked by officers at the border to ensure conformity.

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Once cleared with other agencies CFA delivers documents to the Direct Trader Input Office (DTI) for data capturing.

DTI officer inputs data into computer and generates computer printout showing duties payable.

Agent arranges payment, signs document and presents it at cash office (the bank) for payment (MRA has engaged a commercial bank to receive its money).

Once payment is done, cashier stamps the document and issues a receipt, writes receipt number on the documents and gives original receipt to the payer (CFA).

The CFA then takes the declaration to the Vet Office where it is forwarded to the Verification Office for verification/assessment;

The Verification Officer checks the declaration including attachments, invoices and duties paid (risk assessment)3 and if in order, generates a release order.

o If the verification officer detects irregularities, a query4 slip is issued to the CFA/importer for an amendment to be made on the declaration.

o Upon receipt, if the CFA agrees to the query, he makes amendments as required on the declaration form, signs the documents and returns it.

o The amendment is then done electronically at the DTI.

o If the amendment requires that additional duties are paid, the top up duty and penalty are paid at the cash office (the clearing agent pays a penalty of K10,000 (US$66) and the importer 50% of the additional duty as penalty). Where additional duty is not payable, the clearing agent pays a penalty of K10,000 (US$66).

o Once payment is made, then a release order is issued.

The documents will then be sent back to the Face Vet office for collection by the CFA.

CFA gives the driver the documents.

If foreign vehicle, driver pays toll fees, Insurance, Temporary Importation Permit (TIP)5.

Driver Shows his documents at the gate and proceeds into Malawi.

Inland Transit

If the importer opts to clear his goods inland e.g. Blantyre, there are two main transactions undertaken which are TIP application process for the truck and application for inland transit. The CFA makes an application for inland transit to the station manager. The CFA prepares a Carrier Authorization List (CAL) and attaches supporting documents (invoice,

3 Although the Risk Assessment System guides in terms of which consignments should be physically examined,

physical examination is carried on on almost all consignments irrespective of the risk assessment results.

4 A query can relate to any irregularity on the declaration including value, description, preferential classification without

backing papers, tariff, quantity or origin of goods.

5 Application and the issuance of a TIP at Mwanza takes long to process.

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packaging list, manifest and bill of landing) which are submitted with the application for inland transit. The request is then assessed based on importers historical record, thus a risk assessment of the consignment is done which includes checks on whether consignment is for an individual or a reputable corporate/ organization, the description of goods, if it is a container or open truck, integrity record of the clearing agent used etc. If approved the CFA prepares a declaration without itemizing the goods and submits it to DTI for data capturing. DTI then issues a computer generated printout which the CFA uses to pay processing fees ($30) at the bank. Physical examination of the truck is then done and a report is sent to Face Vet office where it is forwarded to the Verification Office. If the Verification Officer is satisfied with the declaration, he sends it back to Face Vet office where it is send to the Transit section where they issue a T1 (Transit document). The CFA provides a bond as surety for duty at the time of generating a bond. The CFA then proceeds with the T1 to register at the gate to show the truck has been cleared. The truck is then allowed to go through.

Through Country Transit

The procedure is the same as for inland transit traffic above and only differs on the point of discharge for the Transit form (T1) bond and Temporary Importation Permit (TIP) as these are discharged at the border of exit. In both cases, risk analysis is conducted to ascertain if the transit applicant is genuine, and has a clean record with regard to Customs offences. Other requirements are that:

There is need for sufficient bond to secure government revenue in case of default

Processing fees have to be paid to be issued with a Transit form T1

TIP should be processed for conveyance, if the truck is foreign registered.

Exports from Malawi

Most of the export shipment documents are processed inland in Blantyre. MRA at the border post in most cases is a check point. If the export documentation is in order, the CD1 form is captured into ASYCUDA as per the Reserve Bank requirement and the goods are released. The other agencies like agriculture, Veterinary, Forestry, Fiscal police make the necessary checks on goods they control to verify or enforce licenses and permits.

For consignments whose documents are not processed inland declarations are processed at the border. The driver submits the documents to the clearing agent to prepare an export declaration and then submits the declaration to the DTI for input into ASYCUDA. The declaration is submitted to MRA for risk assessment and if documents are in order, a release order is issued and goods proceed to exit.

Mwanza TIP Application/Issuance procedure

Foreign registered vehicles transporting goods into Malawi need a Temporary Import Permit which costs K5000 $30). The CFA/importer submits a TIP application with registration certificate to the Face Vet office. The face vet section officer may also request for the goods manifest. Face Vet Officer then takes the form to the inspection bay and the driver is asked to bring the truck to the inspection bay where its engine number and chassis numbers are verified. The examining officer then writes a report which the CFA

17


returns to face vet office. The Vet office then sends the report to the transit section to issue the TIP. The inspection of the vehicles takes long due to the low number of examiners who are also charged with the responsibility of conducting physical examination.

Clearance Procedures for Informal Cross Border Traders (ICBT)

Both Mwanza and Zobue borders have simplified manual procedures for clearing ICBTs. In most cases ICBTs transport their goods by bus, bicycles, cross border taxis or commercial trucks.6 On arrival at the border, all goods are offloaded from the bus and brought into the passenger inspection hall for clearance. ICBTs are cleared manually using a simplified declaration form (Form 47) and calculation of duties payable is done on form 49. On arrival, traders fill in the form 47 which is presented to the customs officer. The customs officer then conducts a physical inspection to verify the quantities and values of goods declared. The officer does a preliminary assessment to determine which goods should be subject to bill of entry and use of clearing agent. Valuation is a major challenge as some traders undervalue and understate or make false declaration of quantities of their goods. Once inspected the Officer calculates duties payable and the trader pays as guided. If the value of the goods exceeds MK100,000 (US$600), the trader is required to follow the procedures applicable to commercial goods and use a clearing agent to prepare the declaration. Duty is payable on goods valued above MK50,000 (US$300). A processing fee of MK5,000 (US$30) is applicable for each declaration processed regardless of the value of the goods. As the traders leave the passenger inspection hall to get back into the bus, the customs officer checks the form 49 against the passengers’ packages for verification of payment.

Delays are mainly caused by the fact that all goods have to be offloaded and physically examined as well as debates and negotiations for reduced duties by importers who want to avoid paying duties.

6.1.6. Challenges with Clearing Process at Mwanza

Apart from the lack of interagency coordination, the main challenge identified with the process of clearing goods at Mwanza is that no clearing agents (including PIL) have a direct link with ASYCUDA and therefore have to first do their declarations manually then submit the documents to DTI for data capturing into ASYCUDA. Due to the volumes Mwanza handles there is usually long queue at DTI office. This process takes longer as opposed to a system where CFAs can file their declarations into ASYCUDA electronically from their offices. Physical examinations by the different agencies is not coordinated and done at the same time. Different agencies carry out inspections on similar consignments at different times. The other challenge is that importers have to make payments at different pay points as required by the different agencies. The bank only receives money on behalf of Customs.

6 Buses with trailers are the most common means of transport used by ICBTs and an average of 15 buses pass through

Mwanza each week. Taxis and bicycles are also common, and are primarily owned/operated by men.

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6.1.7. Clearing Process at Zobue

Interviews were carried out with key agencies in Zobue to understand the process of clearing goods. Very few agents operate at the border, therefore only Immigration, Customs, Health Official, Insurance and Agriculture departments were interviewed. Most border agencies at Zobue enforce and facilitate ICBTs and do not interfere with commercial traffic as clearance for commercial trucks is done inland at Tete.. All imports into Mozambique with the value above US$1,500 is allowed to proceed inland to clear at Tete, and the border only clear goods valued below this threshold.

Trucks with goods destined for Mozambique are issued with a Memorandum (M76) at the border for inland transit to Tete. The Customs official at Zobue captures data for all the vehicle and goods into the computer and transmits it to the Customs office in Tete. The advance information assists in risk analysis, to know what to expect and to monitor compliance with transit time limitation. If the truck does not report within the specified time, intelligence officers are sent out to look for it.

For goods valued at US$500 or less, a simple declaration is completed where the importer presents cash receipt as declaration.

For goods valued at more than US$500 and up to US$1,500, the importer must present the goods invoice, Declaration Form from Mwanza and Certificate of Origin.

Goods originating from Malawi are only charged 17% VAT, however consignments without a certificate of origin although originating from Malawi are charged both duty and import VAT.. Goods carried by a foreign truck are required to have a TIP, pay for insurance, and toll fees. The CFA complete these procedures while the Customs official at Zobue issues the truck with a transit document (M14). All processes are completed within 15- 20 minutes.

Exports from Mozambique

There are very few exports from Mozambique as most of the goods coming through Zobue are Malawi Imports from Beira port, Durban port in South Africa and Zimbabwe.

Goods Transiting Mozambique into Malawi

Clearance documents for these goods are done at Beira port, from South Africa, Zimbabwe and they get insurance and TIP at their first port of entry to Mozambique. On arrival at Zobue, importer/driver take the TIP and bond documents to Customs counter for stamping, then driver surrenders them at the barrier where the barrier officer inspects the documentation, and if satisfied , allows the truck to exit Mozambique and proceed to Malawi.

Goods Transiting Mozambique from Malawi

On arrival at Zobue Mozambique, the importer/driver buys transit insurance, and uses an agent to process the TIP and bond for transit. Toll fees are paid in Tete. The clearance process is a very fast. In case of doubt the shipment is escorted to exit border, and bond is not required in case of escort.

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6.1.8. Agricultural products Traded Through Mwanza/Zobue

The movement of agricultural products in the SADC region is important to ensure adequate food security. Annex D shows the type of goods that are primarily traded through Mwanza and Zobue.

Trade in agricultural products is highly controlled /restricted by the different government agencies as per the mandates and responsibilities of each agency. This is meant to ensure that the quality of products is acceptable and to control the spread of disease. However, communication of these mandates and the requirements for specific goods is not readily available. Some of the officials at the border were not very clear on the requirements, which make it difficult for traders to comply. In addition, import permits for agriculture products are issued in Blantyre and the inspector at the border operates only as a check point and does not issue permits.

Despite the various controls, the borders are porous and therefore importers especially ICBTs have a way of taking goods across borders without going through the required formalities. Most of the maize in Mwanza is imported from Mozambique and is imported by the ICBTs. Exportation of Maize from Malawi is restricted, it means it require a license.

6.1.9. Informal Cross Border Trade

There were two types of ICBTs at the border, those crossing the border formally and those crossing informally. There were almost equal numbers of women and men involved in the trade. Some women travel with babies or when pregnant despite the difficult conditions encountered in their travel and at the borders. No preferential treatment is granted in these cases.

Despite the SADC Protocol on Trade, containing provisions that could benefit ICBTs in terms of reduced tariffs, the traders interviewed were not aware of the Protocol. In order to qualify under the Protocol, ICBTs must comply with the SADC rules of origin which require traders to produce a certificate of origin for the goods. The certificate of origin is usually issued in each capital and is endorsement by Customs Headquarters. This makes it difficult for small traders to comply since long distance travel is financially difficult.

The COMESA STR is a program designed to streamline the border clearance process for informal traders. Malawi is one of the countries implementing the STR, however it has not yet been introduced at Mwanza border.

ICBTs were also found to be not knowledgeable on how duties, excise and taxes were calculated.

Small traders are also required to pay a processing fee of MK5,000 (US$30) regardless of the value of their consignment. The combination of duties, taxes, and processing fees are considered to be too high by the smaller traders and hence the strategy adopted by these traders, especially women to address the challenge, is to reduce the quantities of goods imported to be within the duty free limits allowed to benefit from the allowable personal goods rebate7. Small traders interviewed do not belong to any ICBT association. Reasons given for not joining such associations were lack of knowledge of their existence, their limited outreach as well as their perceived ineffectiveness in representing the interests of

7 No rebate is allowed on commercial goods however ICBTs take advantage of personal goods rebate system to avoid

paying duty on their goods.

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traders. Not belonging to associations could partially explain their lack of knowledge of trade policies and processes.

6.1.10. Infrastructure

Parking Space

Mwanza border has a reasonably adequate parking space. However due to the slow process of clearance as compared to their counterparts in Mozambique, the parking is always congested. Zobue does not have enough parking area but the border is never congested due to their quick facilitation processes.

ICT and Modernized Equipment

Most of the public agencies in Mwanza lacked facilities such as phone, fax and computers for easier communication and sharing of information with other agencies. As indicated in the processes section, most of these public agencies are critical in the clearance of goods before they are finally cleared by MRA but have no means of sharing information with MRA. The ICT network for MRA was also reported to be a problem and therefore contributes to the delay in goods clearance.

Inspection Sheds, Warehousing, Inspection Equipment & Signage

Mwanza border has a very good drive in inspection shed that is well covered. In case of the rains or too much heat, work is not disrupted. There is however no proper equipment to handle heavy consignments when physical inspection is carried out e.g. forklifts. This results in delays as it takes longer to offload and reload goods back into the truck. There is a warehouse facility for safekeeping of confiscated goods.

Signage was found to be lacking/ inadequate at Mwanza border. Because buildings are not marked, it is difficult for first time visitors to know where to go.

6.2. Baselines – Crossing Times

Baselines of time and cost for goods crossing the border are required to measure the impact of Action Plans to improve border operations and reduce the cost of doing business. Baselines for time were determined as noted below and the baseline for cost will be determined by converting the time into cost in terms of vehicle cost and inventory costs using the World Bank determined formulae.

From the analysis, a total of 497 trucks (both loaded and empty) crossed through Mwanza and Zobue border in the 5 days from June 20-24, 2011. On average commercial trucks from Mozambique take 47 minutes to cross the Zobue border and another 6 hours 35 minutes to cross the Mwanza border into Malawi. Commercial trucks, in this case, include both loaded and empty trucks. The 6 hours 35 minutes crossing time at Mwanza is inclusive of clearance time and other miscellaneous delays at the border.

Commercial trucks from Malawi take an average of 3 hours 35 minutes to cross the Mwanza border and another 19 minutes to cross Zobue into Mozambique. Commercial trucks here also include both loaded and empty trucks. The 3 hours 35 minutes crossing time over Mwanza includes clearance times and other miscellaneous delays at the border.

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Table 2 shows average crossing times in Mwanza for imports and exports while Table 3 shows the the crossing trends for incoming traffic at Mwanza (entering Malawi).

Table 2: Crossing times across Mwanza border

Crossing time (Hours)

All traffic Incoming traffic

(to Malawi)

Outgoing traffic

(from Malawi)

Average 5hrs 5mins 6hrs 35mins 3hrs 35mins

Minimum 4mins 4mins 4mins

Maximum 37hrs 30 mins 36hrs 34mins 37hrs 30mins

Table 3: Crossing Trends for Incoming Traffic at Mwanza

Crossing time (hours)

All trucks Loaded Fuel Empty

Average 6hrs 35mins 7hrs 13mins 1hr 45mins 1hr 57mins

Minimum 4mins 4mins 0.28 0.57

Maximum 36hrs 34mins 36hrs 34mins 6.hrs 42mins 5hrs 16mins

Whereas average times appear reasonable, given the circumstances prevalent at the border, the 1 hour 57minutes average for empty trucks is quite high. In comparison to Zobue, t takes about 30 to 47 minutes for over 90% loaded trucks carrying transit exports from Malawi to Beira port, or to RSA, and 10 to 19 minutes for empty trucks from Malawi to cross Zobue.

6.3. Summary of Challenges/ Constraints

Below is a summary of the challenges identified at the Mwanza border.

Key challenges

There is lack of interagency coordination among agencies at the border resulting in duplication of inspections.

Most of the public agencies lack basic facilities and equipment such as phone, fax, internet and computers.

While most border agencies need access to the same information in order to assess consignments, there is no ICT connectivity between border agencies to share information.

Drivers/importers through CFAs have to make several payments at different pay points for services provided at the border.

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A lot of restrictions exist around the exportation and importation of agricultural products however communication of such information and the effective dates are not readily available or known at the border.

There is an inadequate infrastructure in place for physical examinations (no scanners8,).

Operating Hours for border agencies are not aligned to the border official hours.

Lack of facilities for remote filing by CFA results in long queues at the DTI hence delays the clearance process

Delays in bond acquittals results in trucks being detained at the border

Lack of traffic segregation to fast track empty trucks, tankers, buses, or transit cargo

Risk analysis profiles are not adhered to all the goods are inspected

Lack of scanners is a challenge to justify selectivity criteria, before issue.

Procedure for TIPs for commercial trucks requires physical examination of a truck

Additional challenges

Delays in goods clearance were attributed to a number of issues including MRA ICT network downtime and inadequate bond facilities by some CFAs and power failure despite having a generator fuel is in short supply.

Presentation of documents that are not genuine by some importers as well as reluctance to declare the correct values and quantities of goods, especially in the case of ICBTs, result in the need for a higher percentage of physical examinations.

The border is porous and officials do not have sufficient resources to secure the border adequately and have less staff to patrol.

The manual processing of ICBT declarations makes data collection and analysis difficult for government statistics.

The weighbridge has been out of order for more than 6 months yet trucks are still required to pass through weighbridges for government statistical purposes.

There was a high increase in Customs processing fees from MK1200 (US$7) to MK5000 (US$30) on 3 June 2011.

Physical examinations takes long due to the few officers assigned the function;

Lack of sensitization on requirements for restricted goods; lack of a list of all controlled commodities; this information is not publicized which makes it difficult for traders who want to trade in some of the controlled goods.

6.4. Recommendations

A number of measures can be implemented immediately as well as in the short and medium term to address the constraints or challenges identified at Mwanza

8 Machine packed consignments are currently unpacked at the border for physical examination which is difficult to re-

pack.

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Immediate

Establish a Joint Border Committee (JBC) for all agencies at the border to discuss operational issues on a more regular basis (monthly) and promote a systems approach to the clearing process. All agencies should understand that poor performance by one department affects them all and the overall outlook of their border.

Develop a JBC Action Plan to address challenges and allocate responsibilities and time for implementation of activities including the following:

o Identify and address overlapping inspections and information needs.

o Set up a system to regularly collect information for monitoring border performance and effectiveness of Action Plan activities.

o Agencies to improve the dissemination of information on their roles and requirements at the border, processes and applicable tariffs to importers including small traders through appropriate communication , including information desks at the border post and through the ICBT-focused Cross Border Trade Associations.

o Physical examination of machine packed consignments or heavy consignments to be conducted inland since there is no proper equipment at the border.

o Confirm and finalize infrastructure needs in order to approach funding sources.

o Review the TIP procedure to make it more effective.

o Health, Veterinary, M.B.S. to discuss ways of working as a team to avoid duplicating activities.

o All border agencies in the clearance process should align their working hours to the border official hours.

o Malawi Bureau of Standards to facilitate goods approved by Customs to proceed inland under transit bond, to collect samples and inspection fees inland, than hold trucks to get upfront payment.

Short and Medium Term

Connectivity of clearing agents to ASYCUDA to allow them to file declarations electronically would shorten the process currently taken for filing declarations through DTI.

Establish ICT connectivity between border agencies and their headquarters to facilitate issuing permits at the border where importer/exporter arrives at the border without permits.

Establish ICT connectivity between MRA and other Malawi agencies to allow for sharing ASYCUDA information to ensure other agencies have access to the needed information for their clearance processes, once connectivity has been achieved, consider having a single pay point for fees payable at the border.

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There is need for all agencies to have basic facilities and equipment such as phone, fax, internet and computers to facilitate connectivity and communication between agencies.

Introduce systems to capture and analyze data on ICBTs in terms of who is involved and the types and value of goods.

Create awareness and understanding about the SADC Trade Protocol and how these instruments can benefit traders and ICBTs.

All border agencies to wear uniforms with logos and name tags for transparency and security

SATH to promote the systematic inclusion of ICBT issues on the regional trade agenda of SADC, Corridor Management Institutions and JBCs.

SATH to collaborate with other donors to assist in addressing the challenges identified as delaying the movement of goods across the border.

7. WAY FORWARD

SATH, in collaboration with the Malawi Government (Ministry of Trade), will hold a national workshop as well as a workshop at Mwanza to bring together key stakeholders in border operations to share with them the Border Operations Assessment findings. These findings and recommendations are inputs in the development of an Action Plan for the Joint Border Committee to be established to address challenges found, that will be implemented with assistance of SATH and other donors.

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ANNEX 1: LIST OF PERSONS INTERVIEWED

Name Position/Institution Email Telephone Gender

MWANZA

Ronard Ching’anda

Station Supervisor- Malawi Revenue Authority

Rching’[email protected]

2651432248 Male

Mphatso Mandala

Verification and Entry Processing Section, MRA

265995883738

Male

Thandiwe Ndovi Passenger Section Supervisor, MRA

Female

Isaac Chaona Immigration Incharge

265992300135

Male

Moses Phiri Agriculture 265999118993

Male

Calista Banda Veterinary 265888625820

Female

Bruce E. Luhanga

Veterinary 265888363238

Male

Drake Chinangwa

Forestry Inspector 265999720988

Male

Lifred Maocha Forestry Inspector 265995725730

Male

Georgina Manyamba

Health 265999216344

Female

G.W. Magaleta Road Traffic Directorate

[email protected]

265888893735

Male

Peter Chiwanda Road Fund Administration

[email protected]

265888369334

Male

Mike Mbonga Road Fund Administration

[email protected]

265991191346

Male

Audrick Kadyaakapita

Clinical Officer, North Star Alliance

[email protected]

Male

Francis Khonje Iredex Freight International

+265999220750

Male

C. Nthani Cargomate LTD +265999631005

Male

C. Nandolo MANICA MW LTD +2651432281 Male

mailto:[email protected]




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Kettie Banda HEART Freight Services

+2651432240 Female

E.M. Sibale COMBINE Cargo +265999460263

Male

Henry Sapala FREIGHT Logistics +265995450888

Male

Nicholas Chimbuna

Mack Freight International

+265999510334

Male

ZOBUE

Jose Francisco Xavier

Immigration Officer 258828638330

Male

Senesio Mario Cherene

Health officer 258828471014

Male

Estrela de Assuncao

Government Insurance

Female

Fogueti Joao Xavier

Global Alliance Insurance

Male

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ANNEX B: Border Operations Assessment: Guiding Questionnaire

1. COORDINATION

a. Is there an overall Coordinator of all border operations?

b. Do you have meetings for all border agencies to discuss your operational issues and how often do you meet? Who calls the meetings?

c. If there are conflicts between border agents, how are they resolved?

d. What action would you follow if other agencies operations at the border affect the effectiveness of your own work?

e. What process is followed when inspecting cargo? Is it agency by agency or one inspection during which all agencies necessary are available?

2. CLEARANCE

a. What documents are required for importing, exporting and transit of goods

b. What problems are encountered in clearing general cargo?

c. Where does the transporter start the clearance of goods process when arriving at the border post?

d. How long does it take truckers to clear the border?

3. INFRASTRUCTURE

a. Is parking sufficient?

b. Is there signage to guide persons or transporters to cross the border?

c. Is the language used on sign boards and information boards understood by most people crossing the border?

d. Are there toilets with running water?

e. Are your systems for clearing cargo computerized? Scanners or physical inspection?

f. If yes do you have email and internet for exchanging information amongst you at the border? (Telecommunication & ICT connectivity)

4. AGRICULTURAL PRODUCTS AND STAPLE FOOD CROPS

a. What agricultural products are transported across the border?

b. Mostly which countries are they transported from? From where in the country and to which destination?

c. What special documents are required for clearance of agricultural products?

d. How to you disseminate information on the special requirements for clearance of agricultural products?

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e. What process is followed if the transporter does not have the special documents for clearance of agricultural products?

f. What other general challenges do you encounter with the clearance of agricultural products?

5. INFORMAL TRADE

a. How many small/informal traders cross the border per day? In most cases from where?

b. What type of goods are they trading?

c. What procedures must they follow to cross the border with the goods?

d. Are those traders aware of the procedures? How does the border convey these requirements to the traders?

e. What fees must they pay and for what?

f. What mode of transport do they usually use?

g. Are they typically male or female? Ages?

h. Are there coordination mechanisms/consultations forums between ICBT Associations and border agencies? On what issues?

i. Is the COMESA Simplified Trade Regime (STR) being implemented at the border?

j. There are allegations of harassment of ICBT’s at border crossings, are such reports ever officially filed? If so what actions are taken against perpetrators?

6. WEIGHBRIDGE

a. What are the weighbridge operating hours?

b. What is the process followed when a truck is overloaded?

c. What is the maximum GVM per axle?

d. How often does your weigh bridge breakdown? How long does it take to fix?

e. What happens when the weighbridge is out of order?

7. GENERAL

a. On average how many commercial vehicles get cleared per day?

b. How do you communicate changes in information on regulations or processes for border clearance to the operators?

c. What charges are levied on trucks crossing the border apart from customs duty and VAT?

d. What software system is used for customs clearance of cargo?

e. Does the system allow for sharing of information with other border agencies at the border? Can other agencies access the data?

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f. What are the operating hours for all agencies at the border?

g. How long do commercial vehicles take to clear the border?

30


ANNEX C: Summary of Fees Identified

Type of Fees Cost Songwe Collecting Authority

Customs Handling fees (per declaration)

MK5,000 (US$30) MRA

Clearing Agent Fees (Per declaration)

Approx. MK10,000(US$60) per declaration per truck

Min MK5,000 (US$30) for small traders

Private

Transit Charges Up to 3 axles - US$8/100km

Multiple axles - US$16/100km

Road Fund Administration

Road Permit Fees

Forestry Export License MK10,000 (US$60) per annum Forestry

Veterinary Health Certificate MK5,000 (US$30) per consignment Veterinary

Veterinary Export Permit MK12,000 (US$72)

Bureau of standards Inspection Fees

Values more than MK100,000, 0.65% 0f FOB value +VAT with max of MK300,000 is used;

Values<100,000 but > 50,000, 5%of FOB value +VAT is used;

Below MK50,000, 2.5% of FOB + VAT used

MBS

Fumigation Certificate Fees (Agric. Products)

Phytosanitary Certificate Fees (Agric. Products)

K500 (US$3) for>30 metric tons (currently free due to unavailability of revenue officer)

Agriculture Import Permit Agriculture

Agriculture Export Permit Agriculture

Declaration Amendment penalties

CFA pays K10,000 (US$60)

Importer pays 50% of additional duties payable.

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Annex D: Agricultural Exports from Malawi through Mwanza /Zobue

Formal Traders Informal Traders -ICBTs

Product Destination Product Destination

Maize Zimbabwe / Kenya Rice South Africa

Cotton South Africa Beans South Africa

Tobacco Egypt Dry fish South Africa

Tea United Kingdom Curios South Africa

Pigeon Peas China Sweet Potatoes South Africa

Soya Zimbabwe

Sunflower South Africa

Macadamia nuts United Kingdom

Wheat bran Zimbabwe

There are very little imports of Agriculture products into Malawiimported by Shoprite checkers and a few ICBTs that bring in onions carrots and fruits like apples pears and grapes.

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Annex E: Baselines Study Report

In identifying the baselines, there was broad coverage in the data captured to enrich the data analysis and to establish various factors contributing to the time procedures take to facilitate trade. This appendix covers some of the data from baselines data collected as well as other details from interviews with ICBTs.

Results presented below represent an analysis of 497 trucks that arrived at the border from 20-24 June 2011. As noted above, not all trucks that arrived or crossed these borders during this period were recorded, especially those that crossed between 18 to 21 hours.

Volume of traffic

A total of 497 trucks arrived at Mwanza border during the times specified above. Of these 497, 338 trucks crossed during the times specified above. The remaining 159 either crossed outside recording times or were still at the border by 2pm on 24 June.

Table 1: Crossing Trends for Incoming Traffic at Mwanza

Crossing time (hours) All trucks Loaded Fuel Empty

Average 6.58 7.21 1.75 1.95

Minimum 0.07 0.07 0.28 0.57

Maximum 36.57 36.57 6.7 5.27

This border operates for 15 hours daily and the average crossing time for loaded trucks is almost half of that time. Higher efficiencies can be attained in the clearance of goods to reduce the average crossing time from 7.21 hour.

.

Table 2: Volumes of Commercial Traffic

Date

Malawi to Mozambique Mozambique to Malawi Total

All trucks Loaded Empty All trucks Loaded Empty

20-Jun 13 6 7 20 20 0 33

21-Jun 58 34 24 71 58 13 129

22-Jun 70 54 16 46 40 6 116

23-Jun 52 36 16 79 71 8 131

24-Jun 36 27 9 52 46 7 88

Total 229 157 72 268 235 34 497

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Mwanza

Figure 1

Source: Adapted from Google Maps

MO

ZA

MB

IQU

E

Figure 7: Crossing Patterns for Incoming Traffic at Mwanza

30% of incoming empty trucks take 2-6 hours to cross the border. Most of them take 2 hours or less but there is room to improve the crossing times. Only a small number of all trucks take more than 24 hours to cross the border

The trucks entering or exiting both Mwanza and Zobue were captured from 20 to 24 June 2011 to measure the time it takes to transit the two borders. The data covered vehicle details, arrival and departure time, loaded or empty

The above table shows the volume of traffic going in both directions at the Mwanza border. Mwanza volumes were used as more traffic was recorded at this border than at Zobue. The data presented shows proportions of traffic going in and out of Malawi, not volumes of traffic cleared to cross the border. The table shows that more traffic moves from Mozambique to Malawi than the reverse direction. The flow of empty trucks is also greater from Malawi to Mozambique and South Africa. It must be noted, however, that the Southern part of Malawi- at which the Mwanza border is located- is locked within the perimeters of Mozambique. Some trucks therefore transit from Mozambique through Malawi to other parts of Mozambique. Figure 1 illustrates this scenario.

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Types of Commodities

Some of the imports from Mozambique to Malawi are largely transported from the port of Beira, Zimbabwe and South Africa to Blantyre or Lilongwe in Malawi. Malawi’s main exports through this outlet are consignments from Malawi to the Beira port in Mozambique and some to South Africa. Table 2 summarizes the types of goods transported.

Table 3: Types of Goods Transported

Malawi to Mozambique Beira Port Mozambique to Malawi

Goods Number % of total Goods Number % of total

Maize 76 48% Fertilizer 42 18%

Tobacco 21 13% Fuel 36 15%

Tea 15 10% Clinker 31 13%

Other goods 45 29% Other goods 126 54%

Total 157 100% Total 235 100%

Food 120 76% Food 17 7%

Maize dominates goods that exit Malawi, accounting for almost half of all goods going in this direction. It is important to note that food items, including maize, tea, beans and other items account for more than 75% of all goods leaving Malawi for Mozambique via the Beira port through the Mwanza/Zobue border crossing. Food is given special attention because of its influence to the general livelihoods of residents in the SADC region and because of its position as a key focal area for SATH.

The composition of goods moving in the opposite direction is quite different. There is less quantities of food inflow and the type is processed food packed or tinned food from South Africa imported into Malawi. However, fertilizer, fuel and clinker (a substance used in the manufacturing of Portland cement) form the main categories.