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TRANSPORT AND TRADE

FACILITATION ISSUES IN AFRICARobert Tama Lisinge

Economic Commission for Africa

Tunis

2 June 2015

OUTLINE

� Historical Perspective of Regional Transport

Development in Africa

� Rationale for Regional Transport Corridors

� Achievements and Challenges of Regional

Transport Development

� Status of Trade Facilitation in Africa

� ECA’s Contribution

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HISTORICAL PERSPECTIVE

� Early 1970s: Trans-African Highways (TAH) network

� 1978-1988: First UN Transport and Communications Decade in Africa (UNTACDA I)

� 1987: Sub-Saharan African Transport Policy Programme launched (SSATP)

� 1990-2000: Second UN Transport and Communications Decade in Africa (UNTACDA II)

� 2002-2010: NEPAD Short Term Action Plan (STAP)

� 2010 – 2015: AU/NEPAD African Action Plan

� 2010: NEPAD Presidential Infrastructure Champion Initiative (PICI)

� 2012: Programme for Infrastructure Development in Africa (PIDA)

WHY REGIONAL TRANSPORT CORRIDORS IN

AFRICA?

TAH UNTACDA PIDA

(a) Provide direct road

links between capital

cities of the continent

(b) Contribute to the

political, economic and

social integration and

cohesion of Africa; and

(c) Ensure road

transport facilities

between important

areas of production and

consumption

(a) Establish an

efficient and integrated

transport system to

promote the physical

integration of Africa,

facilitate trade, and

ultimately achieve self-

sustaining economic

development.

(b) Ensure Africa’s

participation in the

globalisation process

and

© contribute to poverty

alleviation on the

continent

(a) Slash transport

costs and boost intra-

African trade

(b) Link major

production and

consumption centres

© Provide connectivity

among major cities in

Africa

(d) Open landlocked

countries and improve

their contribution to

sub-regional and

continental trade11/06/2015 4

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PROGRAMME FOR INFRASTRUCTURE

DEVELOPMENT IN AFRICA (PIDA)

� Endorsed by Heads of State in 2012

� Developed through extensive consultations

� Strong analytical base

� Short (2020), Medium (2030) and Long term

(2040) view

� Priority Action Plan (PAP)

� 51 projects

� 24 in Transport Sector

� Dakar Agenda for Action

� 16 priority projects

� Resource mobilisation for project implementation

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(2010-2015)

Congo-DRC

RRB

Rep. du

Congo

Nigeria-

Algeria Gas

pipeline

Nigeria

Dkr-

Ndjamena-

Djibouti RR

Senegal

North-South

(Cape to

Cairo)

Corridor RR

South

Africa

Missing links of

the trans-

Saharan

highway and

Optic Fibre

Algeria

Great lakes

optical fibre

network

Rwanda

Adama Deen, Head of Infrastructure

Programs & projects, NPCA/NEPAD,

South Africa

EgyptNavigational

Line between

lake Victoria

and the

Mediterranean

sea

ACHIEVEMENTS

� Abidjan-Lagos Corridor� Treaty signed by Heads of State

� USD 50million Seed Fund

� Creation of Corridor Management Organisation

� Navigable waterway between Lake Victoria and the Mediterranean Sea� Pre-feasibility study completed by Egypt

� LAPSSET Corridor� Initiative involves port, railway, highway, and oil pipeline

� Detailed engineering design completed for port

� Part of the road in Ethiopia and Kenya is completed and construction is ongoing in other sections

� Railways development is on track

� Revamping Regional Railways� Djibouti-Addis Ababa

� Mombasa-Nairobi

� Dakar-Bamako

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CHALLENGES: LOW IMPLEMENTATION

RATE OF INITIATIVES

Infrastructure Programme Progress in Implementation

Trans-African Highways • More than 20% remains as missing

links

UNTACDA II (1991-2000) • 354 out of the 708 projects (50%) were

completed

• 112 (16%) were partly completed

• 202 (28%) were unimplemented

• 40 (6%) were abandoned

NEPAD STAP • 15.3 % completed.

• Completion rate varied across

categories of projects: 0 % for capacity

building; 20% for investments; 33.3%

for studies; and 6.9% for facilitation

projects.11/06/2015 9

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THE IMPLEMENTATION PROBLEM

Finance Political Technical

Capacity

Institutions

Project

development

&

implementatio

n

Lack of

political

determination

Choice of

projects

Prepare &

package

projects

Develop

bankable

projects

Operate/maint

ain existing

projects

Unclear roles

&

responsibilitie

s

Integration of

regional &

national plans

Inadequate

coordination

Country-

specific

regulatory &

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STATUS OF AFRICA’S TRADE� Africa’s share of world exports is still low�The share of Africa’s export in global merchandise exports was 3.3% in 2013 compared to 17.8% for East Asia

�Africa’s share of global exports in 1970 and 1980 (4.99 and 5.99%) was higher than that of East Asia (2.25 and 3.74%)

� Intra-African trade was 16.3% of the continent’s total trade in 2013�Which is an improvement compared to previous years

11

EVIDENCE OF AFRICA’S HIGH TRADE

COSTS

12

0

5

10

15

20

25

30

35

40

0

500

1,000

1,500

2,000

2,500

3,000

East Asia &

Pacific

Eastern

Europe &

Central Asia

Latin

America &

Caribbean

Middle East

& North

Africa

OECD high

income

South Asia Sub-Saharan

Africa

Da

ys

US

D p

er

con

tain

er

Transaction Costs in International Trade by Region, 2012

Cost to export (US$ per container) Cost to import (US$ per container)

Time to export (days) Time to import (days)

Time required to export &

import (days)

�Obtaining all the

documents

�Inland transport &

handling

�Customs clearance &

inspections

�Port & terminal handling

�Does not include ocean

transport time

Cost required to export &

import

( US$ per container)

�All documentation

�Inland transport &

handling

�Customs clearance &

inspections

�Port & terminal handling

�Official Costs only, no

bribes

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COSTS OF EXPORTING ONE STANDARD

CONTAINER FROM AFRICAN COUNTRIES, 2012

13

$ 0

$ 1,000

$ 2,000

$ 3,000

$ 4,000

$ 5,000

$ 6,000

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Document Preparation Customs Terminal Handling Inland Transportation

TRADE COSTS IN AFRICA

14

0%

20%

40%

60%

80%

100%

120%

140%

160%

Document

Preparation

Customs Terminal

Handling

Document

Preparation

Customs Terminal

Handling

Time to export Time to import

Africa's performance relative to world average;

2012

AFRICA

AVERAGE

AFRICA

MEDIAN

0%20%40%60%80%

100%120%140%160%

Document

Preparation

Customs Terminal

Handling

Document

Preparation

Customs Terminal

Handling

Costs to export Costs to import

Africa's performance relative to world average; 2012

Import-export activities

in Africa take ≈ 37%

longer and are ≈ 31%

more costly than the

world average.

Custom procedures are

particularly costly for

exporters.

This creates a

competitive wedge

penalizing African firms.

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WHY TRANSPORT COSTS ARE HIGH IN

AFRICA

� Geography� 16 landlocked countries

� Remoteness

� Isolation

� Low traffic volumes

� Poor road condition � Only 38% of cross-border TAH links are paved roads in good or fair condition, 16% are paved roads in poor condition, and 33% are unpaved roads.

� Regulation of transport services� Transport prices are lower in competitive environment, e.g. Eastern & Southern Africa

� Transport prices are higher in regulated environments e.g. West & Central Africa

o Fuel prices

o Delays at borders and weighbridges

o Informal payments

AFRICAN AND GLOBAL RESPONSE

16

� African Union Heads of State and Government

Decision in 2012� To establish a Continental Free Trade Area (CFTA) by 2017

� Action Plan for Boosting Intra-African Trade

� RECs have Trade Facilitation (TF)

Programmes� Complementing the establishment of CFTA with TF measures

could increase Africa’s total trade by over 10% and the share

of intra-African trade to about 22% by 2022 (ECA research)

� Conclusion of WTO Negotiation of an

Agreement on Trade Facilitation � Heralded as a major success of 2013 Bali Ministerial

Conference

� Provide framework for removing trade bottlenecks

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RECS TRADE FACILITATION MEASURES

COMESA SADC

• Harmonised axle load limits

• COMESA carrier license and

transit plates

• Harmonised road transit

charges

• Customs Regional Bond

Guarantee

• Third Party Motor Insurance

(Yellow Card)

• Advanced Cargo Information

System

• Automated System for

Customs Data (ASYCUDA)

• Single Customs declaration of

goods

• Harmonisation of weight

limits and vehicle dimensions

• Harmonisation of road transit

charges

• Adoption of community

insurance scheme

• SADC road design standards

• SADC Driver Licensing –

harmonised training of drivers

and delivery of driving

licensing

ONE STOP BORDER POSTS� Chirundu OSBP between Zambia and Zimbabwe

� Widely cited as best practice

� South Africa and Zimbabwe working towards the

establishment of OSBP at Beitbridge

� East African Community (EAC) bill on OSBP

� There are OSBPs involving Kenya and Uganda;

Tanzania and Uganda; Rwanda and Uganda

� OSBPs are also being established in West Africa

� Cinkase OSBP between Burkina Faso and Ghana

� UEMOA resolution on creation of OSBP

� OSBPs in the Abidjan-Lagos Corridor supported

by World Bank

� EC support to OSBPs in West Africa

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SINGLE WINDOWS

� SWs are being introduced across Africa

� Senegal (GAINDE 2000)

� Ghana (GCNet)

� Tunisia (Tunisia TradeNet)

� Cameroon GUCE

� Regional level efforts

� 16 out of 19 COMESA countries use ASYCUDA

� COMESA engaging member states to upgrade to

ASYCUDA World and to interconnect their systems

� EAC is involved in a Regional SW project

� African Union has a Roadmap and Strategy for

interconnecting customs information systems

ECA INTERVENTIONS AND ACHIEVEMENTS

�Policy research

� Improving understanding of challenges

to implementation of regional projects

�Dissemination of the knowledge

�Capacity building of African officials

�Advocacy for global support for Africa’s

infrastructure development

�Achievements

�African Alliance for Electronic

Commerce

�Africa Corridor Management Alliance

�Feasibility Study of Dry Ports in

Ethiopia

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CONCLUSION

� African countries and RECs have developed

frameworks for regional transport development

and Trade Facilitation

� Achievements have been recorded, but there are

many challenges in implementing activities in

regional programmes

� ECA continues to assist African countries to

address these challenges.

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THANK YOU

tlisinge@uneca.org

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