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Unlocking Trade for Low-Income Countries: Report of the Trade FacilitationFacility, 2009–2015

October 2015

Dominique Njinkeu and Olivier Hartmann

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©2015 The World Bank Group 1818 H Street NW Washington, DC 20433 Telephone: 202‐473‐1000 Internet: www.worldbank.org

All rights reserved.

This volume is a product of the staff of the World Bank Group. The World Bank Group refers to the member institutions of the World Bank Group: The World Bank (International Bank for Reconstruction and Development); International Finance Corporation (IFC); and Multilateral Investment Guarantee Agency (MIGA), which are separate and distinct legal entities each organized under its respective Articles of Agreement. We encourage use for educational and non‐commercial purposes.

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Report cover photo credit: Port at Tema, Ghana © Jonathan Ernst / World Bank

About the Trade Facilitation Facility (TFF)

The Trade Facilitation Facility is a multi‐donor trust fund launched in April 2009 to help developing countries improve their trade facilitation systems and reduce trade costs. It is designed to respond to government requests for assistance in improving infrastructure, institutions, services, policies, procedures, and market‐oriented regulatory systems that enable firms to conduct international trade on time and at lower costs. For more information, visit http://web.worldbank.org/WBSITE/EXTERNAL/TOPICS/TRADE/0,,contentMDK:23190085~pagePK:210058~piPK:210062~theSitePK:239071,00.html.

Acknowledgements

This report summarizes the outcomes of the Trade Facilitation Facility (TFF) between its establishment in 2009 and its end in 2015. The report highlights and reviews the accomplishments and lessons learned of TFF; it also discusses and reflects the perspective of Task Team Leaders and relevant World Bank Group officials on the Bank Group’s continuing work in the trade facilitation sphere.

The report presents results of TFF‐funded activities and programs managed by staff from a large cross section of Bank Group sectors, including Transport, Agriculture, Governance (Customs), International Trade, and Private Sector Development. The Bank group would like to acknowledge the following individuals for their inputs, suggestions, and contributions:

Haileyesus Adamtei, Hamid R. Alavi, Rene Bessin, Daniel Kwabena Boakye, Paul Brenton, Anne Brockmeyer, Colin Bruce, Jasmin Chakeri, Julian Latimer Clarke, Souleymane Coulibaly, John Mason Denton, Shantayanan Devarajan, Henry Des Longchamps Deville, Nora Carina Dihel, Ibou Diouf, Calvin Zebaze Djiofack, Vincent Vesin, Willem Douw, Anca Cristina Dumitrescu, Michael Olavi Engman, Mohammed Dalil Essakali, Enrique Fanta, Thomas Farole, Michael J. Fuchs, Magaly Annabel Clavijo Garcia, Jaun Gaviria, Pierre Graftieaux, Jean‐Noel Guillossou, Tugba Gurcanlar, Fowzia Hassan, Johannes Herderschee, Barak Hofmann, Mombert Hoppe, Richard Martin Humphreys, Atsushi Iimi, Marc Juhel, Austin Francis Louis Kilroy, John Litwack, Julie Saty Lohi, Gerard McLinden, David Cal MacWilliam, Marie Francoise Marie‐Nelly, Eneida Fernandes Mateev, Tadatsugu Matsudaira, Cedric Mousset, Brian G. Mtonya, Thilasoni Benjamin Musuku, Martien Van Nieuwkoop, Maria Claudia Pachon, Maria Perisic, Nicolas Pelletier, Duc Minh Pham, Christine Zhenwei Qiang, Gael J. R. F. Raballand, Anand Rajaram, Ganesh Rasagam, Cordula Rastogi, Richard James Lowden Record, Zeina A. Samara, Yeyande Kasse Sangho, Andreas Schliessler, Rashmi Shankar, John Speakman, Uma Subramanian, Peter Ngwa Taniform, Fulbert Tchana Tchana, Supee Teravaninthorn, Abdoulaye Toure, Volker Treichel, Paul Noumba Um, Smita Wagh.

About the authors:

Dominique Njinkeu managed the TFF and is an active member of the African trade and development community including through the African Economic Research Consortium (AERC) and the Trade Policy Centre for Africa (TRAPCA).

Olivier Hartmann is a senior trade facilitation specialist with the World Bank Group. Previously he was Secretary General of PMAESA, the port industry association for Eastern and Southern Africa.

John Diamond oversaw the editing and publishing of this report, building on the initial editorial work of Rune Lindholm. The final draft of the report was peer reviewed by Virginia Tanase, Daniel Saslavsky, and Manuel Henriques.

Table of Contents

Acknowledgements………………………………………………………………………………………………………….……….3

Message from the Senior Director………………………………………………………………………………….…………9

1. Introduction……………………………………………………………………………………………………………….………..10

2. Overview of the TFF Portfolio………………………………………………………………………….………..….……..14

A Broad Definition of Trade Facilitation for a Complex Agenda Wide‐Ranging Scale of Operations Focusing on Sub‐Saharan Africa and Regional Issues Complementing Other Trade Facilitation Delivery Instruments

3. TFF as an Enabler of Deepening Regional Integration…………………………………………….…..…..…..20

TFF’s Structure and the Advancement of a Broad‐based Trade Facilitation Agenda Region‐Specific Achievements and Lessons

Eastern Africa Eastern Africa Results: Fewer Overloaded Trucks, Increased Regional Integration Southern Africa Southern Africa Results: Cross‐Border Trade Charter Shields Against Arbitrary Treatment Central Africa Central Africa Results: Republic of Congo as Gateway to Congo Basin West Africa West Africa Results: Enhancing Efficiency of Abidjan‐Lagos Corridor East Asia East Asia Results: Lao PDR National Single Window East Asia Results: Second Wave of Trade Growth in Vietnam Latin America and the Caribbean Central America Results: Deepening Regional Integration Caribbean Results: Trade Helps Rebuild Haiti’s Fragile Economy Europe and Central Asia Central Asia Results: Market Analysis for a New Silk Road

Interregional Coordination: Inter‐REC Trade Harmonization of Instruments and Policies Border Management Agencies and Facilities Inter‐Regional Results: Trade Between Nigeria and Cameroon

4. Expanding Thematic Insights……………………………………………………………………………………………….55 Enhancing Evidence‐based Policy Formulation for Trade

Instruments for Collecting the Evidence Trade and Transport Facilitation Assessment (TFFA)

Addressing the Logistics Service Dimension of Trade Facilitation Trucking Surveys New Light on Price and Cost Dynamics Implications for Design of Reform Programs for the Trucking Industry Logistics Strategy for a Landlocked Country

Harnessing TFF to Inform the Broader Trade Agenda

Informing the Multilateral Agenda Building Regional Success Supporting Customs Unions Supporting Implementation of the Economic Partnership Agreement (EPA) Informing the Landlocked Developing Countries Plan of Action

Improving Border Management at Gateways and in the Hinterland Promoting Compliance and Ethics at the Border Increasing Efficiency of Customs Administrations Building Effective Single Windows Joint Border Posts Developing Transit Regimes Support to the CEMAC System Trade Facilitation and Road Safety

Enhancing Trade in Agricultural Products Competitiveness Strategies

Customs Capacity Development Enhancing Free Movement of Professionals

Professional Services Platform for Africa Southern African Development Community Visa Facilitation Initiative Promoting Gender‐oriented Trade Facilitation

Expanding Economic Opportunities for Women in Burkina Faso and Mali 5. TFF Significant Milestones and Lessons Learned………………………………………………………………...84 Mainstreaming Trade Facilitation in the Development Agenda Catalyzing Broader Reforms Leveraging Bigger Investments Building Consensus

6. Annex: TFF Activities by Region………………………………………………………………………….……………….90 TFF Activities in Eastern Africa TFF Activities in Southern Africa TFF Activities in Central Africa TFF Activities in West Africa TFF Activities in East Asia TFF Activities in Latin America and the Caribbean TFF Activities in Europe and Central Asia Boxes Box 2.1 TFF Working in Concert with Trade Facilitation Support Program………….……………..……….18 Box 3.1 Deepening Regional Integration Using a Programmatic Approach to Corridors…………....24 Box 3.2 Reducing Logistics Costs in the East African Community (EAC)………………………………….….27 Box 3.3 Stakeholder Views on TFF in Eastern and Southern Africa………………………………….……….…30 Box 4.1 Time Release Studies………………………………………………………………………………………...…………59 Box 4.2 Spillover Effects of the Professionalization of the Trucking Industry…………………….……..…62 Figures Figure 2.1 Donor Contributions to the TFF……………………………………………………………………..…….…..14 Figure 2.2 Scope of Trade Facilitation……………………………………………………………………………..…….….15 Figure 2.3 Thematic Overview of the TFF Portfolio………………………………..………………………………....16 Figure 2.4 Evolution of the TFF Portfolio………………………………………………….………………………….…...16 Figure 2.5 Geographic Spread of the TFF Portfolio, Based on Grant Amount per Region……..…….17 Figure 2.6 National versus Regional Focus of the Africa TFF Portfolio……………………………..………...18 Figure 3.1 The Three Emerging Pillars of the TFF Portfolio……………………………………………..……….…21 Figure 3.2 Structure of Freight Logistics Facilitation Agenda along the Corridor………………….…...22 Figure 3.3 The Complex Logistics Agenda………………………………………………………………………….…..….24 Figure 3.4 Interregional Trade Flows in Central Africa………………………………………………………….…..51 Figure 3.5 Trans‐African Highway Network……………………………………………………………………………….52 Figure 4.1 Increasing Granularity of Data Collected for Diagnostic Purposes………………………….…56 Figure 4.2 The Shape of Policy Dialogue…………………………………………………………………………………...67 Figure 4.3 The Continuous Improvement Cycle………………………………………………………………………...72 Figure 4.4 Central and West African Livestock Trade Flow………………………………………………………..77 . Maps Map 3.1 Eastern Africa……………………………………………………………………………………………….....………..26 Map 3.2 Central Africa……………………………………………………………………………………………………………..34 Map 3.3 Western Africa……………………………………………………………………………………………………………39 Map 3.4 East Asia………………………………………………………..……………………………………………………………41 Map 3.5 Latin America and Caribbean………………………………………………………………………………………45 Map 3.6 Europe and Central Asia…………………………………………………………………………………...………..49

Map 4.1 TFF‐Supported Trade and Transport Facilitation Assessments……………………..…………….57 Map 4.2 Trucking Surveys Undertaken……………………………………………………………………………………..61 Map 4.3 Support to single Windows and Trade Information Portals…………………………………………71 Tables Table 4.1 TFF Interventions Related to Trade Facilitation Agreements………………………………….…..65

Acronyms and Abbreviations AACE AEO

African Alliance for Electronic Commerce authorized economic operator

AU African Union ASYCUDA Automated System for Customs Data CAADP Comprehensive Africa Agriculture Development program CAR Central African Republic CATT Customs Assessment and Trade Toolkit CEMAC Commission de la Communauté Economique et Monétaire COMESA Common Market for Eastern and Southern Africa CMI corridor management institution DRC Democratic Republic of Congo EAC East African Community EATTFP East Africa Trade and Transport Facilitation Program ECCAS Economic Community of Central African States ECOWAS Economic Community of West African States IDA International Development Association JICA Japan International Cooperation Agency KTA Kenya Transporter Association LDC least‐developed country LLDC landlocked developing country LRA Lesotho Revenue Authority MCLI Maputo Corridor Logistics Initiative NCTTCA Northern Corridor Transit and Transport Coordination Authority NTM nontariff measure OECD‐DAC Organization for Economic Cooperation and Development–Development

Assistance Committee OGA other government agency OSBP one‐stop border post REC Regional Economic Community SACU Southern African Customs Union SIECA Secretaría de Integración Económica Centroamericana SADC South African Development Community

SPS sanitary and phytosanitary SSATP Sub‐Saharan Transport Policy Program TAH Trans‐Africa Highway TCC Transport Coordination Committee TFA Trade Facilitation Agreement TFW Transit Facilitation Week TMEA TradeMark East Africa TIRP Tanzania Intermodal and Rail Development Project TRS time release study TTFA Trade and Transport Facilitation Assessment TTFP Trade and Transport Facilitation Program UEMOA West African Economic and Monetary Union WAAPP West Africa Agricultural Productivity Program WCO World Customs Organization WTO World Trade Organization

Message from the Senior Director

For developing countries to participate fully in the global economy, they must participate fully in international trade. Economists like to talk about natural laws of markets and exchange, but trade at the high level of globalized markets does not happen of its own accord. Countries need to have in place the physical, procedural, regulatory, and legal structures that make produce, goods, and services flow smoothly from field and factory across borders to customers.

This is the work of trade facilitation, and for the past five years, the World Bank Group’s Trade Facilitation Facility (TFF) has been helping low‐income countries overcome the obstacles and challenges to robust participation in trade. The TFF provided critical support to countries and regional economic communities in developing integrated strategies so they can achieve the economic benefits of trade—including sustainable growth and good jobs.

Poor trade facilitation can be a truck sitting idle for days at a border while its cargo deteriorates. It can be a customs official demanding a bribe from a female merchant. It can be inadequate road and port facilities or cumbersome customs clearance rules that pile on costs and delays. It can be goods that fail to meet the quality and safety standards set by major international markets.

TFF has provided the World Bank Group with valuable lessons in how to address these challenges in some of the poorest countries in the world. Along the way the Facility has spread the word about the vital importance of sound trade facilitation strategies to economic wellbeing. Taking a broader view of trade facilitation, TFF helped many developing countries participate in and prepare for the World Trade Organization’s Trade Facilitation Agreement. And since its adoption, TFF has helped client countries develop strategies to implement its provisions. Equally important, TFF has provided critical support to African countries in working toward establishing a Continental Free Trade Area. I would like to thank Bernard Hoekman and Jeffrey Lewis who previously chaired the TFF steering Committee for their leadership of the TFF endeavor. I am confident that the lessons learned and experience gained, which are described in this report, will pay dividends in the coming years as the Bank Group continues, with its partners, to ensure that developing countries are full participants in international trade.

Anabel Gonzalez Senior Director Trade and Competitiveness Global Practice World Bank Group

1. Introduction

Trade is one of the indispensable engines of growth. While international trade can be a contentious political issue, both domestically and between national governments, it contributes significantly to economic development and poverty reduction in poorer countries. It does so by creating job opportunities and promoting competition. It also stimulates technological development and diffusion and stimulates the structural changes necessary to ensure more efficient uses of natural resources.

During the past several decades, most developing countries have introduced measures to enhance trade liberalization, long seen as an important element of an effective and sound economic policy. Despite these improvements, however, poor trade facilitation presents considerable challenges that hinder many developing countries from achieving the benefits of open trade. The domestic market size in these countries is often too small for firms to reach levels of production and operation to compete internationally.

Regional integration thus serves as a means for firms in developing countries to learn to compete and build a basis for participating in the global economy. Strong trade facilitation ensures the movement and clearance of goods across borders within the shortest possible time at the lowest cost, making it a critical step toward achieving the benefits of trade liberalization.1

To help developing countries take better advantage of global trade opportunities, the World Trade Organization (WTO) Hong‐Kong Ministerial Conference in December 2005 launched the Aid for Trade initiative. Its implementation would address the development dimension of the WTO Doha Development Agenda. The conference declaration stated that “Aid for Trade should aim to help developing countries, particularly [least‐developed countries] LDCs, build the supply‐side capacity and trade‐related infrastructure necessary to assist them to implement and benefit from WTO Agreements and more broadly to expand their trade.” The United Nations also adopted the Programme of Action for Landlocked Developing Countries for the Decade 2014–2024 that seeks to foster the development and boost trade at national, regional, and international levels.

Similar efforts to enhance trade liberalization have been initiated to address particular regional or other challenges. For example, in Africa, while countries did not reject the multilateral agenda, the priorities were in dismantling intraregional trade barriers and deepening regional integration through customs unions structures that would enable the formation by 2017 of a Continental Free Trade Area. The limited capacity of developing countries points to the need for a program offering a coherent package of services enabling effective implementation of the international

1For the purpose of this document, the term trade facilitation refers broadly to the infrastructure, institutions, regulations, policies, procedures, and services that allow firms to conduct international trade transactions in either goods or services on time and at low cost.

agreements (e.g. WTO TFA, Vienna Plan of Action) through modern trade facilitation instruments that also support the regional integration agenda.

The Trade Facilitation Facility (TFF) was launched to help low‐income countries improve their competitiveness by reducing the costs of engaging in international trade, thus supporting their efforts to reduce poverty and achieve the Millennium Development Goals. It was designed to complement other trade‐related programs of the World Bank and development partners as these institutions respond to requests from developing countries needing both technical support and financial assistance to maximize gains from international trade agreements.

A demand‐driven approach was the guiding principle at the outset, and client country needs played a central role throughout the entire cycle of the facility. But the purely demand‐driven approach gave way gradually to one that took into account other factors, such as the potential for improving trade flows through regional and corridor approaches. One of the biggest challenges for developing countries with regard to trade facilitation was the lack of sufficient assistance to meet their obligations under trade agreements. To fill this gap in assistance the United Kingdom, the Netherlands, Sweden, and Canada partnered with the World Bank in 2009 to create the TFF program for developing countries, with financial resources totaling $52 million. Consistent with its mandate, the program has provided support to countries and regional economic communities that leads to increased trade, investments, and jobs. Ensuring customs compliance through a regional as well as national approach creates a more effective environment for learning than a country by country approach. In this respect, TFF has filled an important vacuum in aid‐for trade delivery.

The TFF began in 2009 and concluded successfully in July 2015. This report is intended to provide a comprehensive overview of the operational activities and highlight some of the main achievements and lessons learned through the support of the Facility.

This report was prepared through wide consultations and contributions from World Bank Group colleagues and other stakeholders. The TFF management team developed an impact assessment program through which several project‐specific and thematic areas where reviewed, with achievements and lessons learned summarized in policy papers. Consultations were also held with Bank staff in July 2014 at headquarters and staff and stakeholders in the field. The process also addressed the efficiency of gateway ports and the implementation of the WTO Bali Trade Facilitation Agreement (TFA) through a meeting that brought together participants from all African sub‐regions as well as Asia in September 2014 in Douala, Cameroon. An earlier draft of this report served as input into the independent evaluation commissioned jointly by TFF donors

and the World Bank Group and undertaken by Saana Consulting between October 2014 and May 2015.2

The TFF program deliberately adopted a broad definition of trade facilitation and did not put a ceiling budget of individual activities. Such flexibility proved useful as it enabled the design of each activity to be driven to addressing the development challenges being considered such as to have the maximum impact, learning from experience and adjusting if necessary. Providing funds to projects in this manner enabled clients to pursue their own trade and development plans while complying with their international obligations. The demand‐driven approach led to activities that could appear to be ad‐hoc and not sufficiently focused, leading to an overall portfolio that looks fragmented. This report summarizes the main results and shows how these activities, taken altogether, do in fact provide a coherent narrative and show that the Facility has succeeded in a number of ways. TFF was instrumental in nurturing the regional integration agenda as well as fostering the integration of low‐income countries into the international trading system. The program contributed in unique ways by (i) mainstreaming the trade facilitation agenda in World Bank operations, (ii) fostering catalytic forces that enabled critical reform initiatives, (iii) leveraging resources either within the World Bank or the wider development partners community, (iv) building consensus and providing leadership for stakeholder agreement, and (v) filling critical analytical and technical gaps in project preparation and execution.

The flexible delivery model, together with the program’s concentration on Africa, was instrumental in furthering regional integration, particularly in those regions with lowest trade facilitation performances whether measured by the logistic performance index or the World Economic Forum’s Enabling Trade index. A case in point is in West Africa where the Facility is supporting the initial phase of the implementation of new agreed Common External Tariff (CET) or the Economic Partnership Agreement (EPA). In East Africa working in partnership with other donors through TradeMark East Africa (TMEA) the Facility is contributing to the broader regional integration agenda that has gained significant momentum recently. African countries have supported TFA but expressed concerns about inadequate attention to regional integration. TFF, working through the Common Market for Eastern and Southern Africa (COMESA), the Economic Community of West African States (ECOWAS), and the West African Economic and Monetary Union (UEMOA), is addressing this concern, for example, by devoting increased attention to regional public goods, such as infrastructure and policy reform, and to externalities such as conflict. The Bank Group and the United Nations are leveraging their relative expertise in a new “development diplomacy” that promotes political cooperation and regional development, particularly in regions with protracted conflict and environmental degradation. Initiatives are under way in the Great Lakes, the Sahel, and the Horn of Africa, among other regions. TFF has

2World Bank Group, “Helping Low‐Income Countries Unlock Their Trade Potentials: Achievements of and Lessons from the Trade Facilitation Facility (TFF),” February 2015.

supported initial preparatory activities that have informed the design of such program; these are followed through during the implementation.

Four parts follow the introduction to this report. Chapter 2 provides an Overview of the TFF Portfolio. Chapter 3 looks at “TFF as Enabler of Deepening Regional Integration,” highlighting some of the Facility’s accomplishments from a geographic and thematic perspective, particularly the extent to which TFF complemented Bank infrastructure operations and nurtured progress on trade facilitation instruments that countries and regional economic communities (RECs) have adopted but failed to implement. Chapter 4, Expanding Thematic Insights, addresses conceptual themes in trade facilitation. Chapter 5, Conclusions and Contributions, sums up the areas in which TFF has contributed to moving the regional and multilateral trade facilitation agenda.

2. Overview of the TFF Portfolio

The TFF program complemented other, primarily country‐specific and analytical trade facilitation support instruments of the World Bank by responding to demand for interventions involving multiple countries or regions. This approach went gone beyond the traditional focus on transport, logistics facilities, regulatory environment, and customs and border challenges by addressing industry‐ and commodity‐specific trade facilitation challenges. And TFF afforded easy and timely access to resources by World Bank managers, including a clear and relatively simple application mechanism that allowed for long‐term dialogue with the client countries and enabled challenges to be addressed through a phased approach.

Figure 2.1 shows the distribution of donor support to the combined financial contribution of $52 million from Canada, the Netherlands, Sweden, and the United Kingdom.

Figure 2.1 Donor Contributions to the TFF (100 percent = $52 million)

TFF supported operational activities that have helped developing countries derive benefit from the gains and opportunities of regional and global trade by reducing trade‐related transaction and logistical costs. The TFF was also instrumental in mainstreaming both financial and technical assistance from donors to help developing countries meet their trade facilitation obligations. All low‐income

countries and their regional economic communities are eligible for support from the facility; the emphasis has been on least developed countries (LDCs) and Africa.

TFF has been effective in strengthening country ownership, building more effective and inclusive partnerships, and delivering and accounting for development results as set out in the Paris Declaration on Aid Effectiveness and the Accra Agenda for Action.

While the main regional focus of the program has been Sub‐Saharan Africa, TFF has supported activities in other geographical regions. Composition of the portfolio has evolved to optimize facility resources. TFF’s portfolio can be characterized by four salient features: (i) defining the purpose of trade facilitation as adapted to address development challenges in target countries; (ii) interventions tailored in size to meet client needs; (iii) a focus on regions with low trade facilitation performance; and (iv) flexibility and adaptability to complement other World Bank development instruments.

A Broad Definition of Trade Facilitation for a Complex Agenda

The definition of trade facilitation underpinning TFF activities was deliberately broad to accommodate the range of constraints faced by low‐income countries. The term trade facilitation refers to the infrastructure, institutions, regulations, policies, procedures, and services that allow firms to conduct international trade transactions in either goods or services on time and at low cost. TFF activities thus cover the 2013 WTO Trade Facilitation Agreement that primarily dealing with procedures, but also goes well beyond TFA. This broad definition opened the way for an explicit focus on reducing trade transaction costs pertaining to border crossing and international gateways, with the goal of simplifying and harmonizing trade procedures. The definition provides a holistic view of international trade, spanning all dimensions of the supply chain from production to final delivery. Trade facilitation encompasses the role of the physical infrastructure supporting trade such as roads, gateways, and border posts as well as the quality, availability, and affordability of logistics and transport services. And trade facilitation includes dimensions impacting trade such as payment systems and telecommunication networks (see Figure 2.2).3

Figure 2.2 Scope of Trade Facilitation

Grant funding in the TFF portfolio goes toward a range of issues such as agriculture, competitiveness, customs and border management, transport, and logistics.

3The focus on physical trade transaction costs means that the concept of trade facilitation is usually applied to trade in goods, although there are also strong arguments in favor of facilitating trade in services.

Figure 2.3 Thematic Overview of the TFF Portfolio

Even in the core transport and logistics grants, several TFF interventions cover the “fringes” of the agenda, focusing on logistics service efficiencies, professionalization of the logistics service providers, or the trade facilitation angle of road safety for freight.

Wide‐Ranging Scale of Operations

TFF imposed no restrictions in the budget allocation to particular activities, enabling TFF management to focus on aligning budget with the needs at hand. By the end of 2014, TFF’s portfolio consisted of 70 grants, each corresponding either to a single activity or related activities. Evolution of the portfolio over the life of the trust fund is depicted in Figure 2.4.

Figure 2.4 Evolution of the TFF Portfolio

The median grant amount was a relatively modest $430,000. The largest grant was a $4 million supporting Regional Economic Community (REC) and corridor management institution programs. The second largest was a $3 million contribution to a program for senior managers

in customs administrations in Sub‐Saharan Africa. These two large grants where implemented through special arrangement with the World Bank–managed Sub‐Saharan Transport Policy Program and the World Customs Organization.

Focusing on Sub‐Saharan Africa and Regional Issues

The World Bank Group has played a leading role in regions such as West and Central Africa that traditionally lagged behind other parts of the continent. TFF followed the guidance of the WTO Hong Kong Ministerial Declaration that aid for trade should go to developing countries,

particularly least‐developed countries, to help build trade‐related infrastructure and supply‐side trade capacity. LDCs, countries in the International Development Association, and countries with low per‐capita income have been a priority for TFF, in keeping with the Bank Group’s Twin Goals of eliminating extreme poverty and boosting shared prosperity. These priorities all pointed to Sub‐Saharan Africa as the key region for TFF.4 The result, as Figure 2.5 shows, is that Africa has indeed been the main beneficiary, with 79 percent of the Facility’s portfolio.

Figure 2.5 Geographic Spread of TFF Portfolio, Based on Grant Amount per Region

Figure 2.6 illustrates categories of the African portfolio broken down by single country, multi‐country, regional projects involving RECs or other regional institutions, and continental. A majority of the interventions had a regional or continental focus, as TFF helped several RECs deepen their involvement in trade facilitation activities.

4The World Bank classifies countries according to per capita income, calculated using the World Bank Atlas method. Currently the income groups are the following: low‐income, $935 or less; lower middle income, $936–$3,705; upper middle income, $3,706– $11,455; and high income, $11,456 or more. More information, including the list of IDA countries, is available at http://go.worldbank.org/K2CKM78CC0. The OECD‐DAC list uses the same per capita income thresholds and can be found at www.oecd.org/dac/stats/daclist>. The United Nations classifies countries as LDCs based on income, human resource constraints, and economic vulnerability. The list of LDCs can be found at http://www.un.org/special‐rep/ohrlls/ldc/list.htm.

Figure 2.6 National vs. Regional Breakdown of the Africa TFF Portfolio

The focus on regional rather as opposed to country‐specific activity grew over time. In TFF’s first year, all applications were confined to single countries by design. That proportion dropped to half of the applications the second year. Since then, the regional dimension has been dominant.

Complementing Other Trade Facilitation Delivery Instruments

TFF activities were implemented either by World Bank project teams or the recipients of TFF support—countries, RECs, and associations. When working with external partners, TFF ensured close involvement of client countries in the project cycle. Bank Group project teams appreciated the straightforward application mechanism for TFF support and its ability to respond rapidly.5 The resulting dialogue with client countries and regions has led to strategies to effectively address trade facilitations challenges, often resulting in a series of TFF grants expanding from an initial diagnosis to a program of interventions.

Box 2.1 TFF Working in Concert with Trade Facilitation Support Program

The Trade Facilitation Support Program (TFSP), managed by the World Bank Group’s Trade and Competitiveness Global Practice (T&C), enables the Bank Group to respond rapidly to requests for assistance to help countries plan for implementation of the WTO Trade Facilitation Agreement. Assistance under the program is thus tightly focused on issues relating to implementation of the Bali Agreement and responds to requests from national officials in client countries, or Geneva, or in places where the Bank Group already has trade facilitation programs in place. Approved projects are supported by Bank Group country teams, with 33 technical assistance projects in various stages of design or implementation receiving TFSP support.

5One criterion set for the TFF was that decisions on applications should take a maximum of six weeks, but for most applications the timing was in practice shorter.

The Trade Facilitation Facility and TFSP thus complement one another. TFF enables the Bank Group to respond to a broader range of trade facilitation issues, including regionally focused initiatives and transport logistics challenges faced by developing countries. TFF has become an important instrument of support for the regional integration agenda in low‐income sub‐regions. Accordingly, TFF adopts a broad definition of trade facilitation that goes well beyond the boundaries of the WTO TFA. Overall the TFF and the TFSP provide different flexibilities and capabilities to Bank Group teams and clients. Given that both programs focus on trade facilitation reform there is some overlap in mandate. In practice, however, the programs operate quite differently and focus on different elements of the trade facilitation, transport logistics, and regional integration agenda. TFF’s role in relation to the Bali Agreement predates the signing of the accord in 2013. Assistance to a number of developing countries enabled a pro‐active participation in the lead‐up to and at the Bali ministerial conference.

3. TFF as an Enabler of Deepening Regional Integration

TFF has emerged as an essential instrument for deepening regional integration. At the outset, it supported and complemented transport corridor projects in all regions, helping to boost the trade facilitation and policy dimension often neglected by infrastructure investments. A range of softer trade facilitation activities complemented the hard infrastructure corridor projects. As a result of TFF’s mid‐term evaluation, greater attention has been paid to consolidating these activities with the broader regional integration agenda.6 Approaches to advancing trade facilitation in different geographical regions have necessarily varied, due to the specific client needs and circumstances. In Eastern Africa, for instance, TFF has taken a broad approach to advancing the trade facilitation agenda, whereas in Central Africa, TFF’s support has unfolded gradually, as the insights and success of one TFF activity led to follow‐up activities with broader scope. Similarly, in West Africa the approach moved from discrete and unrelated interventions to a more comprehensive approach.

The following sections illustrate TFF’s interventions in different geographical regions, highlighting some of TFF’s accomplishments over the first five years. The stories illustrate how the facility played an important complementary role by supporting intervention areas that, in many cases, needed flexible and fast‐moving support not readily available through other trade facilitation programs. Before discussing the achievement of individual sub‐regions, the report considers a framework for advancing the broad definition of trade facilitation as required by the complexity of the challenges facing low‐income countries.

TFF’s Structure and the Advancement of a Broad‐based Trade Facilitation Agenda

The TFF was built upon the principles of strengthening country ownership, building more effective and inclusive partnerships, and delivering and accounting for development results as set out in the Paris Declaration on Aid Effectiveness and the Accra Agenda. A demand‐driven approach served as the guiding principle during review of applications for support from countries. Over time, applications for TFF support started to show certain patterns. A framework emerged that adopted three vantage points on the trade facilitations agenda: (i) a regional perspective, with a cluster of interventions supporting the integration efforts of RECs; (ii) a corridor perspective, with a cluster of interventions supporting logistics efficiency and performance along corridors and networks; and (iii) a trade flow perspective, with a cluster of activities addressing commodity‐ or industry‐specific challenges for enhanced competitiveness of trade (Figure 3.1).

6Luc de Wulf, “TFF Midterm Review,”, World Bank, 2013.

The mid‐term evaluation of the program recommended that TFF consolidate a then‐fragmented portfolio arising from the purely demand‐driven approach in favor of a partially programmatic approach for a coherent set of activities that would address systemic impediments to trade in client countries. This shift nurtured dialogue with relevant World Bank units that identified gaps in the trade facilitation agenda at the regional level, and encouraged interventions that helped bring coherence to the portfolio. This approach has been successfully applied to West and Central Africa, two traditionally under‐served regions. For Eastern and Southern Africa, the dialogue also involved partners external to the World Bank, notably TradeMark East Africa (TMEA).7

Figure 3.1 Three Emerging Pillars of the TFF Portfolio

Three thematic clusters provide a framework for TFF work: regional integration, corridor, and competitiveness. The regional integration cluster focuses on supporting the deepening of integration in RECs. Activities in the corridor cluster concentrate on logistical performance along trade corridors. The competitiveness cluster focuses support on agribusiness. Regional integration is founded on a coherent and modern set of trade facilitation instruments. Support areas include (i) articulation of national and regional strategies, (ii) evolution and update of regional instruments, and (iii) implementation of regional instruments at the national level. The resulting trade facilitation agenda enabled the TFF to address systemic issues concerning all aspects of the trade environment.

A single approach might focus on the hurdles faced by a trader moving goods along a physical route—be it by land, sea, or river. The trader’s problems might be based on physical infrastructure defects that encompass the succession of modes and nodes between maritime gateway and inland terminal, or on administrative defects, such as cumbersome documentation

7 TradeMark East Africa (TMEA) is a multi‐donor program supporting regional integration for the East Africa Community (EAC).

processes and bureaucratic inefficiencies associated with financial and information exchange between relevant actors.

The focus on the logistics elements of trade have addressed the international supply chain, particularly the complex succession of operations and procedures involving logistics operators, control agencies, and trade auxiliaries, such as banks. From a trader’s perspective, what matters is the efficiency of the process: How much does it cost to get across a border? How long does it take? Are these costs and transit times consistent from trade transaction to trade transaction? The efficiency of the supply chain can be measured along three critical dimensions: (i) price, (ii) duration, and (iii) reliability. Poor performance in any of these dimensions identifies inefficiencies that need to be addressed. There are elements of price, duration, and reliability in all components of an international supply chain, but not all components have the same potential for improvement. In addition, not all components carry the same weight, or importance, in a trader’s bottom line. To improve on the efficiency of logistics, it is important to analyze the stages of the international supply chain in pieces—to disentangle the causal relation between problems and symptoms. Only then can one examine the underlying problems that are increasing prices or duration or decreasing reliability.

Analysis examined freight logistics along transport corridors, defined as overland systems linking maritime gateways to the hinterlands or to inland areas that are often rural or economically isolated. Optimizing each segment of the corridor in isolation is insufficient. It is essential to improve on the corridor as a whole. Thus, the corridor policy dialogue focused on both the institutional environment in which trade occurs and the tools policy makers use for monitoring and diagnosis of trade facilitation‐related problems (Figure 3.2).

Figure 3.2 Structure of Freight Logistics Facilitation Agenda along Corridors

Maritime gateways connect countries—including landlocked countries—and regions to the rest of the world. They are centers of the physical transfer of goods between shipping and land transport, and vice versa. They are also centers of information and financial exchange and for defining the status of goods. A wide range of operators engage in these processes. This complex array of activity takes time, and the amount of time a shipment waits at the port (technically, its dwell‐time at the gateway) represents a significant portion of the total delivery time from the arrival of a ship in port to the delivery of goods to their final destination. Moving goods through a gateway requires significant paperwork. Documentation includes the transfer of information and money between all the different actors. It is an iterative process in which most of the information on the goods traded is shared among agencies (clearance by customs, release by shipping agent, release by terminal operator, etc.). In this process, customs administration play a pivotal role and has generally been perceived as the most important obstacle or source of delay (see Box 4.1 in the next chapter on time release studies). Accordingly, most efforts to reduce port dwell‐time have been oriented toward improving customs efficiency, notably through the introduction of information technology (IT) systems to assist in the clearance process.

The inland transport segment of the corridor enables the physical movement of goods between the maritime gateway and the inland terminal. Along the way are more potential bottlenecks; if a shipment does not have documents indicating it has passed through customs, it will be held up at the border crossing. Competition between inland transportation firms, particularly in the trucking industry, can reduce delays without compromising customs revenues and can be achieved through reform of road transport policy. Effective reforms, including the establishment of inland terminals, lead to more efficient and safer multimodal transport systems.

There are two reasons to establish inland terminals: (i) to serve a densely populated area receiving imports, such as capital cities and economic centers, and (ii) to expand local economic activities, for example, in areas dependent on mining or agricultural exports. The challenges for international trade logistics differ according to the characteristics of each of these scenarios. For the main consumption centers, inland terminals provide facilities required for clearance of high volumes of goods prior to final distribution. Goods are transported along the corridor to their destination under a customs transit regime. Delivery requires an import declaration for final customs clearance. For large shippers with available storage space and adequate handling equipment, the customs clearance process can take place rapidly on their property. However, the majority of shippers must clear their goods at a customs bonded area at the destination bureau. These inland terminals must accommodate two types of processes. One allows customs clearance and onward delivery on the same truck, where only the efficiency of the clearance process matters. But terminals must also accommodate offloading and warehousing of the goods for customs clearance and onward delivery on a different truck. In these cases, adequate handling equipment and storage facilities are critical. Inland terminals must therefore combine physical facilities with border agency operations.

To further accommodate the challenges of low‐income countries, the conceptual model underpinning TFF activities focused on harmonizing the interactions of institutions, logistics services, and infrastructure in the interest of trade facilitation supporting regional integration. Whereas most transport and trade facilitation programs focus on infrastructure and at varying degrees on institutions, TFF interventions enabled work in logistics services to be coordinated with other elements of the broader agenda, including infrastructure and legal and regulatory institutions, as depicted in Figure 3.3.

Figure 3.3 The Complex Logistics Agenda

This approach avoided a one‐size‐fits‐all strategy in favor of one that accommodated both limited single‐country programs and much more ambitious agendas being advanced by RECs. Activities could be consolidated to serve coherent sets of countries with common challenges and a willingness to make progress, such as those sharing the same corridor (see Box 3.1). Several TFF interventions directly supported the competitiveness of specific trades, notably in agricultural product and agribusiness, through interventions that targeted the specific bottlenecks. For instance, rural logistics for agricultural produce and agribusiness can be significantly improved through the availability of adapted transport services, warehousing and packaging facilities, improved market information, and so forth. Trade facilitation alone is not always sufficient to make export commodities competitive on the world markets. In such cases, processes to increase their value can make them less sensitive to transport costs.

Box 3.1 Deepening Regional Integration Using a Programmatic Approach to Corridors A corridor facilitation program in Sub‐Saharan Africa in early 2011 focused on corridor performance monitoring and inclusive policy dialogue to support the trade facilitation and

regional integration agenda. This program addressed not only diagnosis and data collection, but also stakeholder engagement. The program extended to solution‐oriented activities when stakeholders agreed on the diagnosis.

• Corridor performance monitoring. Transport observatories and targeted surveys are critical to defining comprehensive policy reform programs, which tackle the real bottlenecks and not only their symptoms. These mechanisms are critical in the effort to better understand the needs of industry. They facilitate efficient logistical delivery. And they are critical to rebalancing the need to improve physical infrastructure and policy reforms to facilitate cross‐border movements.

• Inclusive policy dialogue. Transport Coordination Committee of the RECs (comprising RECs, corridors authorities, logistics industry regional federations, and development partners) is essential for aligning and harmonizing policies across countries and regions as well as fostering deeper regional integration. The adoption of norms and intergovernmental agreement for the Trans‐African Highways (TAH) is one among several examples of the continental convergence supported by the program.

In East Africa, cooperation between corridor authorities and the trucking industry began with surveys in Kenya, Rwanda, and Tanzania and road safety programs in Tanzania. This set the stage for a voluntary compliance plan with axle load regulation through a charter ratified by 14 private industry associations and public regulatory and enforcement agencies. In West Africa, the program helped support performance monitoring through a pilot transport observatory on the Abidjan Lagos and Abidjan Ouagadougou corridors and provide critical input in the preparation of a complex reform agenda for trucking and logistics along the Abidjan Ouagadougou corridor.

Region‐Specific Achievements and Lessons

The application of the TFF’s approach in various regions, primarily in Africa, illustrates the complementary role the Facility has played. The diversity of projects highlights the TFF’s flexibility and adaptability to challenges on the ground.8

Eastern Africa

In Eastern Africa, TFF funded nine projects totaling $4.2 million covering a range of issues from assessing Tanzania’s railway system to corridor projects to a study of intermodal transport issues. The projects benefited regional organizations, including COMESA and EAC, as well as individual countries, including Djibouti, Rwanda, and Tanzania.

TFF has enabled key stakeholders to engage in addressing regional trade facilitation issues in a more comprehensive way. TFF achievement’s in Eastern Africa is best exemplified by its

8 See Annex for tables providing TFF project details by region.

contribution to the implementation of the East Africa Trade and Transport Facilitation Project. Examples of country‐level activities supported by TFF include assessments of customs operations in Djibouti and Ethiopia, development of a logistics services strategy for Rwanda, and technical assistance to railways in Tanzania. Work with RECs has included developing customs union instruments for the Common Market for Eastern and Southern Africa (COMESA) and work on trade finance and intermodal transport in the East African Community (EAC).

TFF has also opened up opportunities for private sector participation through work with industry associations and transport corridor stakeholders in areas such as road safety with the trucking

industry. TFF helped with developing a charter for small‐scale traders that ensures fair and adequate conditions when crossing borders. The implementation of regulatory and legal instruments was more effective when the relevant actors at different levels, including the private sector, supported and actively participated.

Support to the region has also come in the form of analytical work and technical assistance, mainly related to three major investment projects: (i) the East Africa Trade and Transport Facilitation Program (EATTFP), which includes Kenya, Rwanda, Tanzania, and Uganda and their connections to the ports of Dar es Salaam and Mombasa (see Box 3.2); (ii) the Tanzania Intermodal and Rail Development Project (TIRP); and (iii) the initiative for Integrated Corridor Development in the countries of the EAC, which is still in its early stages.

In East Africa, TFF‐funded activities had notable spillover effects on the implementation of other EATTFP projects. The impact assessment of the project was instrumental in facilitating a dialogue with the Kenyan government. Some TFF‐supported achievements under EAATFP include surveys of the trucking industry that provided detailed information on the supply of trucking services, costs, and prices that prompted road sector reforms. TFF funding supported corridor authorities in developing transport observatories as tools for monitoring and diagnosing barriers to trade along corridors. TFF’s support to project preparations of TRIP was crucial to the dialogue with the Tanzanian authorities on introducing relevant institutional reforms; it also helped secure additional IDA) funding of $100 million.

Box 3.2 Reducing Logistics Costs in the East African Community (EAC)

TFF‐supported activity in EAC significantly reduced logistics costs. The work included efforts to enhance governments’ appreciation of key trade facilitation issues, a general trend toward privatization, and preparatory work toward improvements in rail transport and intermodal systems.

Main Achievements of the East Africa Trade and Transport Facilitation Program (EATTFP)

Revenue authorities introduced soft reforms ahead of infrastructure construction. This new approach was especially successful in Southern Africa.

Clearance times significantly decreased and are now among the lowest in the region. Reliability of clearance times has also improved. The improvements have increased vehicle utilization rates and therefore efficiency of transport services. There have been significant reductions in logistics and operator costs.

Program has deepened country appreciation of trade facilitation and links between hard and soft interventions. Railway operations have been privatized. Though rail traffic volumes declined during project implementation, governments no longer

subsidize the railways and instead receive concession fees. Infrastructure investments and operations are now fully financed by the private sector.

Coordination on transport and trade facilitation has improved among EAC countries through the Seamless Transport Committee.

Achievements of TFF‐funded Institutional Assessment of Tanzania’s Railway System

Successfully informed the design of institutional development and capacity‐building interventions for transforming the system.

Helped establish a dialogue with Bank Group counterparts in Tanzania to introduce institutional reforms in the sector.

Preliminary design and technical specifications for the infrastructure informed the design and cost estimation of specific physical investments.

The financial and economic assessment results helped secure an additional $100 million in IDA funds for TIRP.

Helped in preparation of an investment lending operation expected to enhance cost‐effective, efficient, and reliable intermodal rail operations along the Central Corridor.

Benefited Tanzania’s landlocked neighbors Burundi, Rwanda, and Uganda through greater trade and transport development and created potential for future investment operations to develop rail and intermodal services along the central and northern trading corridors in the East Africa region.9

Eastern Africa Results: Fewer Overloaded Trucks, Increased Regional Integration

Heavily overloaded trucks are part of the traffic pattern in many developing regions of the world, East Africa being no exception. But overloaded trucks are bad for business, bad for the economy, and bad for roadway safety. Not only are overloaded trucks one of the main reasons for deteriorating road conditions in the region, they also contribute to increasing numbers of accidents involving vehicles and pedestrians. Overloaded trucks are more difficult to steer, take longer to stop, and are less stable.

Road transport is the dominant mode of transportation in East Africa. In Kenya for instance, 95 percent of the county’s export and import trade travels by road. The region’s transport industry is thus central to development and economic growth. While the individual transport company might benefit from overloading, the associated costs to the industry and society are extremely

9 Sevara Melibaeva, TFF Support in Trade and Transport Facilitation in Eastern and Southern Africa, World Bank, 2014.

high. These high costs will eventually have an effect on the prices and costs of transport services, which in turn will negatively affect a country’s competitiveness and trade.

Overloading had plagued the region’s roads for decades despite persistent efforts to eliminate it. In May 2013, with TFF support, the EAC Legislative Assembly adopted the Overload Control Bill, establishing a legal framework has been established to reduce the practice. As with any approved legislation, only through effective enforcement of the law can the desired effects be achieved. Experience shows that addressing only the enforcement side of axle load legislation is not enough to eliminate the problem. Central to significantly reducing the practice is to ensure compliance by private sector operators—traders and logistics companies.

In Kenya, the trucking industry is well aware that adequate road infrastructure is essential to enhanced business performance. There is a convergence of interest between the private sector and regulatory agencies. As a forum for policy dialogue among all stakeholders, the Northern Corridor Transit and Transport Coordination Authority (NCTTCA) together with the Kenya Transporter Association (KTA) developed a private‐sector‐focused program seeking commitment by shippers and logistics operators to voluntarily comply with axle load limits.

To formalize the commitment, TFF supported the NCTTCA and KTA as they formulated the Self‐Regulatory Vehicle Load Control Charter. Through case studies, reviews of best practice guidelines in Eastern and Southern Africa, trucking surveys, advocacy papers, and regional workshops, TFF’s assistance provided the analytical underpinnings to the process, which contributed to a focused dialogue on axle load control between the regulatory agencies, shippers, and industry. The charter spells out the commitments and roles of each stakeholder in promoting voluntary compliance with the axle load regulations.

On October 13, 2014, fourteen stakeholders signed the charter. All Northern Corridor countries were represented at the signing, including a delegation from Uganda that has indicated a willingness to become the second country after Kenya to adopt the charter as a first step to its regional roll‐out.

The creation of the charter and its acceptance is an achievement that holds a number of potential benefits, both for the countries where the stakeholders are willing to embrace it and for the region. (For more on stakeholder views of overall TFF activities, see Box 3.3.)

Adherence to the charter will save the trucking companies money in maintenance costs and contribute to healthier competition between them. It will also reduce wear and tear on the main roads, increase the life span of roads, and decrease maintenance costs. Promoting compliance with axle load limits pays off in several ways: it prevents premature road deterioration, avoids the expense of reconstructing the entire infrastructure, and averts adverse impacts on trade from poor infrastructure. Overload control has been a major concern among all donors involved in road network rehabilitation and development—the European Union, African Development Bank, and the World Bank. The charter represents a critical milestone in the effort to ensure that scarce

resources are not wasted on premature rehabilitation of road networks. Eliminating overloading practices will also contribute to improved road safety.

The charter has the potential to contribute to deepening regional integration. As similar private sector–led initiatives for self‐regulation of axle load control are being promoted in Southern Africa, the first steps have already been taken to develop an action plan for overload control in Eastern and Southern Africa under the leadership of NCTTCA. Moving to a region‐wide charter for self‐regulatory vehicle load control will have implications for the trucking and logistics services throughout the region. The ultimate goal is a uniform trucking industry operable across the region with positive consequences for trade and commerce.

Box 3.3 Stakeholder Views on TFF in Eastern and Southern Africa

From August 18 to 20, 2014, TFF stakeholders met in Kampala to review main achievements and lessons from TFF in Eastern and Southern Africa. Some of the main conclusions are summarized below.

The soft activities supported by TFF were useful in scaling up investment along the East African region through close coordination with the task team leader of the EATTFP. Improvement in trade facilitation had notable spillover effects on the implementation of the project. The impact assessment of the project funded by TFF was likewise instrumental and has facilitated dialogue with the Kenyan government.

Work undertaken independent of EATTFP, particularly supporting the Northern, Central and Dar es Salaam corridors, had major spillover effects. The Kampala meeting highlighted selected contributions of the TFF, especially when combined with other partners. For example, funding from TFF and TMEA was catalytic in enabling the Central Corridor Transit and Transport Coordination Authority CCTTFA and the Northern Corridor Transit and Transport Coordination Authority (NCTTCA) to collect detailed data relevant to impact evaluation, including the following:

i. A trucking survey provided detailed information on the supply of trucking services, costs, and prices in Kenya, Rwanda, and Tanzania.

ii. Building on corridor performance monitoring, TFF funded the design and collection of data as part of observatories on northern and central corridors. NCTTCA now operates one of the most systematic data collection and dissemination systems on any corridor in Africa.

iii. Port process diagnostics provided detailed data on movement of cargo and document processing in the ports at Mombasa and Dar es Salaam.

iv. Border post surveys provided detailed monitoring of border processes and clearance times at key regional border posts such as Malaba, Gatuna/Katuna, and Mutukula, with the Japan International Cooperation Agency (JICA) also contributing.

v. The Sub‐Saharan Transport Policy Program (SSATP) funded data collection for the Northern Corridor Transport Observatory and border crossing time surveys. The data provided a foundation for discussions on the development of trade facilitation in EAC.

The meeting also took note of extended coordination between the SSATP and other partners, particularly TMEA. The coordination between them was based on their respective advantages, with SSATP bringing to bear its experience in engaging logistics operators to define the relevant performance monitoring framework. This experience has been leveraged to benefit other RECs in Africa through the REC Transport Coordination Committee (TCC).

Southern Africa

Ten project grants supported by TFF for Southern Africa totaled $5.2 million and took on issues ranging from regional customs collaboration and modernization to transport facilitation and streamlining of visa processes. The Southern African Customs Union (SACU) and South African Development Community (SADC) were among the regional organizations that benefited from TFF interventions, and the Facility supported individual country projects in Lesotho, Mozambique, Swaziland, Zambia, and Zimbabwe.

In Southern Africa, TTF has supported a range of activities that have enabled effective engagement by the Bank Group. These include such things as technical assistance for customs modernization in Lesotho and Swaziland, trade and transport facilitation assessments in Zimbabwe, and in the framework of the Southern African Customs Union (SACU). Capacity building and analytical work supported by TFF has been critical in many ways to laying small but important steps toward future work. For example, in Zimbabwe where the World Bank has had minimal engagement for more than a decade, agreement on prioritized infrastructure investments have been reached and priorities for addressing border constraints have been identified. TFF has provided support to Lesotho for harmonizing customs and border procedures with South Africa in order to promote trade and foreign direct investment between the two countries. TFF supported a pilot for the Southern African Development Community Visa Facilitation Initiative—UNIVISA. This pilot, covering Zambia and Zimbabwe, is expected to minimize the time and cost required to obtain visas and increase tourism.

Southern Africa Results: Cross‐Border Trade Charter Shields Against Arbitrary Treatment

In many African countries, informal traders form an integral part of the busy border‐zone landscape.10 Estimates show that informal cross‐border trade in some areas may equal one‐third or more of the total formal trade. In Southern Africa, for instance, this would entail informal trade flows of $20 billion per year, equivalent to almost half the total development assistance to the all of sub‐Saharan Africa. For small traders, crossing the border remains a bureaucratic obstacle course. But if properly managed, informal cross‐border trade has the potential to support Africa’s efforts at reducing poverty. With assistance from TFF, a first step has been taken to improve the conditions under which these informal traders operate.

Informal cross‐border trade has positive macroeconomic consequences and plays an important role in food security and income creation, particularly for rural populations that would otherwise suffer from social exclusion. Moreover, for about 43 percent of Africa’s population, informal cross‐border trade is a source of income, with the majority of the traders at many borders being women. The traders include other vulnerable groups, such as handicapped people. Most informal traders have no education and raise capital from their own resources or through loans from friends and relatives. Traders are generally not bankable, nor do they have assets that banks would accept as collateral.

It is important to recognize that this informal cross‐border trade is not illegal. Many traders cross the border through established border posts and are processed by government officials. But the small traders, especially women, face a number of challenges. In some areas women make up close to 70 percent of the traders. Surveys indicate that women face substantial risks when crossing borders, with more than half having endured acts of violence, threats, and sexual harassment; 60 percent report being fined; and over 80 percent say they have been forced to pay bribes.

The web of obstacles facing small traders crossing borders pushes them, regardless of gender, into the shadowy areas of illegal trading. Apart from the serious sexual harassment and other gender‐related abuses faced by women, all small traders are burdened by tedious administrative procedures, long border processing times, and complex and costly requirements in the form of different kinds of certificates and permits. They also have limited access to information on specific requirements and regulations and are frequently faced with demands for bribes and other forms of corruption.

10Scholarshaveofferedawidevarietyofdefinitionsofinformalityintradingandotherbusiness.Therearedifferentgradationsofinformality,andinformalbusinesses,whileusuallysmallone‐ortwo‐personconcerns,cansometimesbequitelarge.Theterminthisreportfollowsthegenerallyaccepteddefinitionthatidentifiesasinformalthosetraderswhoarenotregisteredwiththegovernmentanddonotpaytaxes.Informaltradeisnot synonymous with illegal trade, which would include arms and drug smuggling, but often involvesindividualsbringingsmallquantitiesofproducetomarket.

Recognizing the importance of informal cross‐border trade, and especially its benefits to poorer segments of a society and less developed regions of a country, TFF supported the development of a charter for cross‐border traders. Working with border authorities, trader associations, and other stakeholders, the activity resulted in a charter that spells out rights and procedures for small traders. The charter rests on a set of basic principles such as efficient processing and no discrimination, abuse, or harassment; transparent duties, fees, and taxes; clear documentary requirements; and no bribes. The charter is backed by a mobile phone short‐message service and voice‐based complaint mechanisms and performance indicators, and it has been widely disseminated in English and local languages.

The charter has been introduced and validated as a pilot program at the Zambia‐Malawi border. As part of the pilot, a large number of stakeholder consultations have been held, and three training courses for traders and border officials have been organized. Furthermore, Airtel Malawi and Airtel Zambia have agreed to provide toll‐free lines for the feedback component of the charter as part of their corporate social responsibility.

The pilot provided valuable insights and lessons learned for a future role out of the charter. As the pilot indicated that informal cross‐border trade is plagued by mutual misperceptions and lack of sensitization, a continued dissemination of facts and rights among traders is critical. Illiteracy among traders is high, so using local languages and voice‐based reporting systems is important. Upgrading the technology is not the first priority; in the beginning it is more important to have high‐level buy‐in of the border agencies and traders associations.

A precondition for successful enforcement of the charter will be a clear division of roles and responsibilities among the different parties. Revenue authorities on both sides of a border have the biggest interest in enforcing a charter, which would secure a smooth cross‐border trade, and they are therefore well placed to take the lead in enforcing it.

Central Africa

Central Africa received $7.8 million in support of 19 TFF grants, making this region the focus of the most intensive TFF activity. The grants covered a broad range of trade facilitation issues including simplification of trade procedures, transit program implementation, trade corridor diagnostics, customs collection issues, opening up trade bottlenecks, and payment systems and regulations. Regional beneficiaries included the Commission de la Communauté Economique et Monétaire (Economic and Monetary Community of Central Africa, CEMAC) and the Economic Community of West Africa (ECOWAS). Individual country projects were undertaken in Cameroon, Central African Republic, Chad, the Republic of Congo, the Democratic Republic of the Congo, Equatorial Guinea, Gabon, and Nigeria.

Central African countries are connected through two main corridors that give them a degree of continuity, despite several important missing sections. These corridors originate from the gateways of Douala, Cameroon, and Pointe Noire, Republic of Congo. The Trans‐Cameroon

corridor links Cameroon to Chad and the Central African Republic with further connection to the north of the Republic of Congo and to Gabon. The second corridor, the Congo River Basin and its tributaries, the Ubangi and Sangha, link the Democratic Republic of Congo, the Republic of Congo, and Central African Republic with further connections to Gabon and Cameroon through national road developments. The two corridors are natural trading routes for both regional and international commerce. The donor community is funding several ongoing programs that focus on both hard infrastructure and process challenges, and the TFF supports several of these efforts.

In a characteristically holistic approach, TFF worked to address both the infrastructure challenges and the procedures and regulations related to transit trade along the corridor that links the Port

of Douala with Central African Republic and Chad. The work was done as a complement to existing projects by the World Bank, the European Union, the African Development Bank, the French Development Agency, and the Japan International Cooperation Agency (JICA). TFF funding supplemented projects to enhance the soft agenda in the broad array of interconnected programs. For example, it supported work on customs integrity to increase transparency and revenue collection by encouraging customs officers to sign performance contracts based on existing human resources policy.

TFF‐supported activities in Central Africa have created a common understanding among the region’s key stakeholders about the need for moving the trade facilitation agenda forward. They recognize the achievements attained so far and have expressed support for scaling up the regional integration dialogue, building on the accomplishments of the trade and transport facilitation initiatives along the Douala‐Bangui‐N’Djamena corridor.

TFF assistance has entailed analytical work and capacity building, mainly for projects linked to the CEMAC transport corridor that goes through Cameroon, the Central African Republic, and Chad, and connects the countries with the Port of Douala in Cameroon.

To simplify processes through the port, TFF has supported implementation of an electronic single‐window process which simplifies customs procedures by converting clearance to an automated, paperless system. To strengthen the technical skills needed for managing the system, institutional support was provided to customs administrations of Cameroon, Central African Republic, Chad, and the Port of Douala. Capacity building was also provided to expand the use of the automated process to other Central African countries that depend on the port. In the past, there has been resistance to the system, and to build support and sensitize the major public and private partners, TFF supported outreach efforts that emphasized the importance of the automated system in terms of trade and transit operations and transaction time and cost reductions. TFF supported the development of performance contracts between Cameroon customs and import‐export operators that increased the effectiveness of the customs officers. These efforts have helped lower dwelling times in the port.

TFF has provided critical support to the implementation of CEMAC’s new transit regime, focused on reducing the nonphysical barriers to and improving the implementation of the CEMAC Customs Union. The support helped improve transport dimensions which had been the weakest part of the transit regime. TFF support complemented the customs aspects adopted by the Council of Ministers in 2010. With TFF support, a mid‐term action plan for facilitating activities in the CEMAC region was developed. The combined training, capacity building, and stakeholder consultations have helped establish a supportive environment for improved implementation of the CEMAC regime.

The work undertaken in connection with CEMAC also illustrates TFF’s flexibility in providing assistance. TFF provided timely technical assistance that bridged two phases of the IDA‐funded project. This work would not have been completed under the normal procedures within CEMAC.

Addressing the need for greater regional focus on trade facilitation, TFF has been instrumental in both highlighting the importance of the issue and providing means to address shortcomings.

Central Africa Results: Republic of Congo as Gateway to Congo Basin

After years of war and instability, in the past decade the Republic of Congo has put in place various reforms to create a private sector‐led market economy. The reforms, aided by rising oil revenue, have brought economic growth with an annual GDP increase of more than 5 percent. The country still faces a number of challenges in its efforts to stimulate a broad‐based, diversified economy that creates jobs, especially for youth, and contributes to improving social outcomes. Obstacles to cross‐border trading create structural bottlenecks that impede the country from creating a competitive economy. Even though the Republic of Congo is a member of CEMAC, its trade with other member countries and its close neighbors is lagging.

To complement the government’s trade reform program, TFF has supported an activity that collected comprehensive data and relevant information to assess cross‐border trade between the Republic of Congo and its neighbors. The resulting information will provide an analytical foundation for identifying priorities for specific trade facilitation projects. A comprehensive action plan is being developed to guide the implementation of trade facilitation interventions. If successful, its ultimate result will be a more diversified economy and reductions in time and cost for trade transactions.

TFF‐supported activity is composed of four components. First, it evaluates the performance of the Brazzaville river port and assesses how to improve its efficiency. A master plan is being prepared for rehabilitation and restructuring of the Port of Brazzaville based on assessments of administrative deficiencies and hurdles to trade‐related services. The plan will also address the extent of informal trade between Brazzaville and Kinshasa. Second, a survey and an assessment on the cross‐border trucking and container transport flows focused on the Brazzaville‐Douala trade corridor will help identify key trade facilitation issues. Third, the plan includes a survey and an assessment of freight transportation in the Pointe Noire–Cabinda corridor to determine the main trade facilitation elements affecting trade flows. Finally, the work assesses the state of the road transport sector through reviews of existing legal, institutional, and regulatory frameworks to provide an action plan to strengthen the sector.

Component 1: Rehabilitating the Port of Brazzaville focused on assessing the performance of the port and its connectivity in terms of the institutional and regulatory framework. Problems identified in the assessment included an absence of clear rules and procedures in the port, an invitation to corruption; lack of coordination among different border agencies; lack of capacity among port officials to provide technical controls; weak application of international standards; and a lack of computerized data.

Infrastructure at the Port of Brazzaville

Components 2 and 3: Republic of Congo’s main trade corridors sought to understand the functioning of the trucking industry along these corridors, identify bottlenecks, improve efficiency of the corridors, and design a trade facilitation action plan. The assessment identified multiple law enforcement and official bodies—police, road safety organizations, customs, and so forth—with overlapping jurisdiction and little inter‐agency coordination as a serious factor in delays. Truckers confront official and unofficial check points where they are required to pay fees ranging from $10 to $30. Road safety and other regulatory frameworks are largely missing, particularly along the Point Noir–Cabinda corridor due to the absence of a bilateral freight convention with Angola. Logistical infrastructure such as warehouses, offices, parking, and rest areas are largely absent.

Republic of Congo Transport and Border Infrastructure on the Brazzaville‐Douala Corridor

Component 4: Strengthening the transport sector entailed an assessment that found a lack of dialogue among stakeholders, weak or absent regulation, poor implementation of those regulations and international rules that were on the books, a poor road safety record due to weak regulations and lax enforcement, frequent random roadblocks, and poorly trained transport professionals.

A value chain analysis examined the impact of these trade and transport challenges on the country’s agriculture sector, particularly cassava, the main food staple. Poor and costly transport services hampered the ability of farmers and transporters alike to access domestic and regional markets, obtain relevant market information, or make use of storage facilities.

Based on all of these findings and discussions with stakeholders and authorities in February 2015, a comprehensive action plan is being finalized aimed at strengthening governance and accountability of the country’s public sector. It will also create an important platform in the World Bank Group’s dialogue with several of the country’s ministries, custom authorities, and private sector.

West Africa

In West Africa, 12 trade facilitation projects received $9.4 million in TFF grant support, covering issues such as improving customs efficiency, financial market integration, trade corridor enhancements, and quality improvement for agricultural products. ECOWAS, CEMAC and the West African Economic and Monetary Union (UEMOA) were among the regional beneficiaries. Country projects were undertaken in Benin, Burkina Faso, Côte D’Ivoire, Ghana, Liberia, Mali, and Nigeria.

Regional trade integration in West Africa requires enhanced trade facilitation over an extended period. There is much to be done. TFF activities address constraints faced in logistics services that keep costs and prices high. Effective client ownership of the trade facilitation program is essential for its success, and TFF has nurtured a process that has enabled ownership of activities, especially capitalizing on partnerships with stakeholders that have built credibility with key players. While the West African Economic and Monetary Union (UEMOA) and ECOWAS commissions have a key role to play, they do not always agree on goals and strategies. Through the various regional activities, however, strong and integrated working relationships have been developed across the Bank Group team supported by TFF, the two commissions, and other regional stakeholders. The World Bank has instituted a framework that brings together all country directors, the relevant sector management units, and IFC. On the client side, in addition to the head of the two commissions, the senior officials of relevant technical departments are members of working groups that validate activities and monitor implementation. This framework ensures Bank Group alignment with client priorities and identifies when remedial actions are necessary. TFF support

to a transport observatory has strengthened relationships with stakeholders operating along the region’s main transport corridors, especially on the Abidjan‐Lagos, Tema‐Ouagadougou, and Abidjan‐Ouagadougou‐Bamako corridors.

Several TFF‐funded activities built on IDA‐funded projects and initiatives by other development partners. TFF activities are an integral part of the Implementation Action Plan of the Regional Integration Assistance Strategy for West Africa, an agreement between ECOWAS and the World Bank to revitalize and deepen cooperation that would accelerate regional development.

West Africa Results: Enhancing Efficiency of Abidjan‐Lagos Corridor

The Abidjan‐Lagos corridor spans 1,000 kilometers, running from Abidjan, Côte D’Ivoire, through Ghana, Togo, and Benin to Lagos, Nigeria. The corridor is the focus of significant World Bank investment in trade and transport activities, totaling some $406 million, by far the largest initiative of its kind in the region. The TFF has contributed to the Abidjan‐Lagos project through a range of activities that have enhanced the efficiency of transport and logistics and unlocked development opportunities for international and intraregional trade.

A recent World Bank study observed that trade in and from the region remained far below potential, with official and unofficial trade barriers raising costs and price volatility of food staples

and restricting economic opportunity.11 The root causes of the inefficiency stemmed from a transport system based on increasingly obsolete colonial‐era infrastructure. This system was developed to facilitate the extraction of raw materials for export and the arrival of imports into the sub region following a south‐north axis from the major sea ports to the hinterland. Examples of delays in the supply chains included long port dwell times, numerous roadblocks along the corridor routes, and long border crossing delays.

The TFF helped in the development of a holistic approach in the Abidjan‐Lagos corridor. In the area of trucking costs, for example, this included interventions that improved the operating conditions for trucking companies and addressed the freight transport market characteristics for increased competition. Other components of the effort helped streamline the documentation process for the transfer of goods from one country to another so that it no longer hampered movement along the corridor. Data collected and analyzed by TFF for the creation of a pilot transport observatory highlighted the importance of advanced information. For instance, when a customs declaration is submitted prior to the arrival of a ship, the port dwell time is reduced by half, on average, compared to when goods are declared after arrival. IT connectivity proved to be another critical enabler for improvement and requires tools such as single‐window processing, coordination among border management agencies and operators, and an adequate transit regime.

Accelerating clearance at gateway ports offers opportunities for further growth throughout the region. In light of TFF findings, it appears feasible and desirable that countries adopting or developing programs to better coordinate border management processes could do so in a manner that adequately manages the linked challenges along corridors. This holistic approach could be part of efforts to develop single window processing through increasingly common build‐operate‐transfer projects financed by levies on trade transactions. Such efforts could build on partnership with the African Alliance for Electronic Commerce (AACE), a federation of African single‐window operators engaged in peer‐to‐peer monitoring of efforts toward an effective, overall single window. Such engagement includes intra‐Africa experience, learning and sharing, as well as a South‐South dimension that would enable exchange of ideas with Asian and Latin American peers. The TFF pursued a peer‐to‐peer review of a single window that led to an international conference in September 2014.

Timely quality information is essential for designing and monitoring a comprehensive regional trade facilitation agenda. TFF‐funded activities have been instrumental in fostering dialogue among RECs, corridors organizations, regional organizations, and development partners, including among units within the World Bank. The methodological support to the ECOWAS and UEMOA commissions is helping with the development of the West Africa Transport Observatory,

11For purposes of the working paper, Sahel countries include Burkina Faso, Chad, Mali, Mauritania, and Niger. These countries are members of UEMOA/ ECOWAS. The paper also acknowledges the important linkages and overlaps with countries in North Africa (Algeria and Libya) and West Africa (Senegal and Nigeria).

implemented through the Sub‐Saharan Transport Policy Program. The transport observatory is expected to become the forum for policy dialogue on regional integration. From such dialogue could come an effective mechanism to transform knowledge into action, as is found in East Africa. There is potential to turn the Abidjan‐Lagos Corridor Organization into a full‐fledged corridor authority for the coastal corridor and possibly establishing a regional corridor authority for the hinterland corridors. This would help build capacity and develop solutions that empower logistics stakeholders. The value of the support provided by TFF is magnified given that other donors, including the African Development Bank, the European Community, and USAID among others, are prepared to provide resources to build the institutional aspect of the corridor authority.

East Asia

TFF supported two East Asia trade facilitation projects with grants totaling just over $2 million, with support to a single‐window project in Lao People’s Democratic Republic and to a trade facilitation strategic planning project in Vietnam. The Lao PDR project delivered secondary benefits to 10 other countries in the region.

East Asia Results: Lao PDR National Single Window

Lao Peoples Democratic Republic is a landlocked country dependent on regional and international integration for sustained growth. The conventional view has been that the country performs relatively poorly in trade facilitation due to its geographical location. It has two main trade routes to the sea, one through the gateway ports in Vietnam, and the other, preferred route through Thailand. Changing regional trade patterns, however, are leading to a reconsideration of Lao PDR’s geographical position. Major regional corridors running east‐west and north‐south pass through Lao PDR, and large‐scale Chinese transport infrastructure investments there have the potential to transform regional connectivity.

Amid this changing environment, TFF provided assistance to Lao PDR for the implementation of a national single window system, as part of Lao PDR’s commitment to participate in the regional ASEAN Single Window initiative. TFF sought to aid in establishing the necessary enabling environment for operating a national single window, including the governance framework,

operational model, and specifications for the necessary IT platform. The single window will allow traders to submit all import, export, and transit information required by regulatory agencies via a single electronic gateway instead of submitting essentially the same information numerous times to different government entities.

The long‐term development objective to make trade faster, simpler, and more cost effective will be achieved through a sustainable and cost‐effective national single‐window system. Benefits will include simplified requirements for traders, reduced transaction costs, improved data integrity, limited opportunities for rent‐seeking, increased transparency and predictability, and the application of modern risk‐based approaches across government agencies. The National Single Window project has enhanced the World Bank’s credentials in the trade facilitation domain and strengthened its position as the development partner of choice. This project, combined with other support for Lao PDR’s trade facilitation efforts, will keep the World Bank closely involved in enhancing the trade facilitation regime in the country.

East Asia Results: Second Wave of Trade Growth in Vietnam

For almost two decades, Vietnam’s economic growth has averaged 7 percent, mainly as a result of economic liberalization in which trade has played a central role. Between 2000 and 2010, Vietnam’s exports expanded at an annual rate of 17 percent, making Vietnam one of the most trade‐oriented countries in the world.

The rapid growth of Vietnam’s exports was underpinned by the removal of trade barriers, both tariff and nontariff, during the reform process. Despite a current robust export performance, however, emerging evidence indicates that this positive trend cannot be guaranteed. The existing drivers of export growth are mostly exhausted and new proactive efforts to boost export competitiveness must now be undertaken. As Vietnam’s economy has become increasingly trade‐intensive, trade facilitation has become a vital determinant for its export competitiveness.

To assist Vietnam in assessing its trade facilitation and policy readiness, TFF funded a comprehensive study to identify ways to improve the competitiveness of Vietnam’s exports. The challenge facing Vietnam is not only to reduce the cost and time of logistics for its exports but also to restructure its supply chains to add value to its exports and promote trade in higher value goods. The study, organized around three pillars—infrastructure, regulation, and supply chain—supports activities that can bridge the policy gap in trade and logistics facilitation and assist in developing a national trade facilitation strategic plan.

Transport infrastructure and logistics. Vietnam has substantially increased public investment in infrastructure, yet its trade‐related infrastructure has not maintained pace with the growth of exports. Vietnam’s growth potential is severely constrained by weak infrastructure and transport links connecting major growth poles to main international gateways. High transport costs, poor quality of transport, and sub‐par logistics services are among the key impediments. The over‐

reliance on public investment, which is clearly unaffordable, inefficient, and therefore unsustainable, should be changed.

Regulatory procedures for exports and imports. Customs reform has produced some strengthening in border management, but many agencies continue to rely on outmoded procedures that are time‐consuming, opaque, and susceptible to corruption. Business processes remain complex and inconsistent, with little IT application, significantly diminishing export competitiveness.

Supply chain organization. Weaknesses in Vietnam’s supply chains for manufactured and agricultural products have prevented the country from lowering export costs and capturing much needed value. Key constraints include dependence on imported materials, making it difficult to reduce lead time and meet the flexibility of global markets. Agriculture faces regulatory constraints for large‐scale agro‐industrial development. In particular, the dominance of government‐to‐government rice export discourages production of high quality and differentiated rice. Development of supporting industries can help relieve many of these constraints.

The institutional environment for trade facilitation in Vietnam is inadequate at the macro level, with too many strategic plans with overlapping goals and activities, none of them focused on trade facilitation or integration with other trade programs or industrial and human resource development. International agreements covering this area have been signed but not yet implemented. Multiple agencies at different levels of government carry out trade facilitation activities with no coordination. This situation, as much as deficiencies in the supply chains themselves, creates inefficiency in trade facilitation. The Vietnamese government can do more in each of these roles.

The study made a number of policy recommendations to address these shortcomings. The first imperative is to build a sound policy framework and institutional capacity to implement a national action plan for enhancing trade competitiveness and capturing higher value addition. Development of Vietnam’s trade infrastructure and transport services must shift away from a complete reliance on state funding to mobilizing resources from outside the state budget. Regulatory procedures must be simplified and a sound legal framework developed for customs modernization geared to international standards. Supply chains should be restructured to capture value and to participate proactively in global value chains, for example, by promoting domestic production of raw materials, developing a common vision that combines increasing the value of final products with value addition through supply chain restructuring, enhancing the availability of trade finance, and formalizing public‐private partnerships to support these activities.

The study’s findings and recommendations were well received by the Vietnamese government and have led to several follow‐on actions. The Ministry of Industry and Trade has been tasked with developing a national action plan to improve Vietnam’s capacity in trade logistics and integration into the global supply chains. In the late fall 2014, the government approached the

World Bank with a request for technical assistance in developing the plan and for additional technical and financial assistance for implementing the plan once it has been fully developed.

Latin America and the Caribbean

Grant support from TFF for projects in Latin America and the Caribbean totaled $2.3 million and benefited three trade facilitation projects covering trade facilitation diagnostics and regional integration. In the Central America region, TFF funded analytical work and technical assistance in the areas of transport and logistics services, regulatory environment, and customs administration that contributed to deepening regional integration among Costa Rica, El Salvador, Guatemala, Honduras, and Nicaragua. In Haiti, TFF‐funded analytical work has provided critical input for improving trade facilitation in several areas, a key part of Haiti’s strategy for rebuilding the country’s economy.

Central America Results: Deepening Regional Integration

As part of a regional integration effort, and with the endorsement of the Secretaría de Integración Económica Centroamericana (SIECA), in 2010 Guatemala, Costa Rica, El Salvador, Nicaragua, and Honduras requested technical assistance and analytical work from the World Bank Group in three key areas of their trade regimes: regulatory transparency, transport and logistics, and customs administration. With a grant from the TFF, the World Bank responded with the Trade Facilitation for Regional Integration in Central America Project.12 To achieve maximum impact, the project targeted interventions in each country that would benefit not only the implementing country but the entire region.

During the past decade numerous trade agreements in Central America have helped lower tariffs, both within the region and with external trading partners. In 2008, a common customs union was signed into force, and since the end of 2006, the first year of the ratification of the Central America–Dominican Republic Free Trade Agreement, export flows have grown by 20‐40 percent. But these actions could have translated into even greater growth for the countries in the region. Growth in terms of exports, as a percentage of GDP, has lagged behind outputs of Vietnam, Cambodia, the Czech Republic, and Vietnam, countries of similar size and a comparable outward orientation. So despite the gains, Central America is still faced with logistical and operational bottlenecks that require greater political capital to address and change. The TFF‐funded project consisted of three components addressing trade issues via regulatory, logistic, and administrative reform.

12See the TFF impact assessment report, Improved Regional Trade Facilitation in Central America: A Multidisciplinary Approach (Clavijo Garcia and Stern 2014).The authors thank Jasmin Chakeri, Enrique Fanta, Jose Eduardo Gutierrez Ossio, Dominique Njinkeu, and Óscar Calvo‐Gonzalez for helpful comments and discussions.

Transparency in trade regulation. The goal was to bring clarity to the region’s use of trade norms and standards known as non‐tariff‐measures (NTM). These are the sanitary and phytosanitary rules, product standards, and certifications required for international commerce. As no up‐to‐date repository of the region’s regulatory requirements existed, a database was created and used together with the analytical framework developed to assess and calculate the price impacts of NTMs on consumers and firm competitiveness. The analysis showed these measures are particularly prevalent in Central America, much as in South Asia, which is well known for the use of NTMs as trade barriers.

In Costa Rica, the findings contributed to a national discussion on the efficiency of the government’s regulations. This component has resulted in two important follow‐up TFF projects. The first developed by the Secretariat for Digital Government in Costa Rica concluded that the process for obtaining approvals for sanitary registries was overly cumbersome, leading in 2014 to a new online application platform. The initiative has standardized registry requirements that had often been left to the discretion of the processor. The new platform eliminated the need for transaction agents, created more knowledgeable users, increased staff accountability, and gave the Ministry of Health a more accurate breakdown of its revenue stream. The second follow‐up project led by IFC will create an online platform allowing for the mutual recognition of sanitary

registries in the region. This is expected to reduce wait times by 50 percent. The initiative is considered essential for the private sector to be competitive alongside foreign imports.

Hard and soft solutions in transport and logistics. The region suffers from relatively high logistics costs due to a variety of challenges related to hard and soft logistics infrastructure. Secondary and tertiary roads that are often in very poor condition, limiting market access, increasing transport costs and times, isolating production zones, and accelerating product losses. Border crossing infrastructure is often lacking, and delays at crossings have been shown to be the main contributor to low average travelling speeds. Soft infrastructure challenges include lack of coordination between border agencies and burdensome sanitary, phytosanitary, and customs procedures, which can increase logistics costs and extend border crossing delays.

Limited information regarding logistics costs, times, and bottlenecks represents a shared challenge across the region. This restricts governments’ ability to identify challenges. To help the governments understand the situation and allow them to intervene effectively, TFF‐supported a number of analytical studies. For example, the study, “Logistics in Central America: The Path to Competitiveness,” pointed up longer‐term strategies to eliminate logistics bottlenecks. More immediate impact was generated by data and findings from a study in Guatemala that fed into a current Non‐Lending Technical Assistance. The study’s findings were key to the design of a pilot for transport and logistics regional corridor between El Salvador, Guatemala, and Mexico. The study also functions as a mechanism for policy dialogue in the short term and project implementation in the long term.

Improving efficiency in customs administration. Customs agencies are often at the core of trade facilitation reforms. They have a direct impact on government revenue, given the taxes, duties, and transaction costs they collect, as well as on consumers, given the impact these costs have on the final price of goods. TFF responded to a request from Costa Rica, El Salvador, Guatemala, and Nicaragua to assess the strengths and weaknesses of their administrations, operations, and accompanying technical assistance.

The Customs Assessment and Trade Toolkit (CATT) was implemented in the four countries in 2011. CATT is an integrated monitoring tool that allows an agency to rate practices and performance according to 120 evidence‐based indicators. It allows an agency to compare itself to international standards. The real value lies in its ability to track internal progress through periodic evaluations. Both El Salvador and Nicaragua have begun to use CATT as an internal assessment tool. Analysis undertaken in the four countries revealed a lack of integration between customs procedures causing delays and control management problems. They also exposed a lack of strategic thinking preventing customs from benefitting from technological and administrative advancements.

In Costa Rica, implementation of a strategic plan has improved revenue collection and established a systematic benchmarking process for operations. The risk profiles created for importers, customs agents, and courier services have helped reduce the physical inspection rate

for cargo. In Nicaragua, a risk matrix helped identify factors that threatened the completion of an existing strategic plan. Through more efficient control mechanisms, the number of physical inspections has been reduced and engagement with the private sector and other agencies has improved. In El Salvador, the customs agency went paperless, and two electronic payment functions were developed. A risk management system was developed and a comprehensive system for the management and control of abandoned merchandise is being implemented.

The TFF‐funded project led to policy recommendations designed to better harness the comparative advantage of the region’s export capacity and its traders. At the end of the implementation phase in 2013, both the analytical and technical assistance activities of the project provided the framework for drafting the region’s annual economic priorities for 2014. The draft resolution was presented to the presidents and finance ministers of Central America at the end‐of‐year meetings of the Consejo de Ministros de Hacienda o Finanzas de Centroamerica, Panama, y Republica Dominicana (COSEFIN), and SIECA together with the Inter‐American Development Bank.

Caribbean Results Story: Trade Helps Rebuild Haiti’s Fragile Economy

The Haitian economy has been recovering at a steady pace since the devastating earthquake of 2010. The government has continued rebuilding infrastructure and institutions and is improving access to social services. The country ranked 153rd out of 155 countries on the World Bank’s 2012 Logistics Performance Index. By 2014, Haiti had improved somewhat to 144th out of 160 countries in the LPI. Still, Haiti remains one of the poorest in the world, with a GDP per capita of $820 in 2013, underscoring the urgent need to accelerate economic growth by addressing serious deficiencies in infrastructure and trade logistics.

Part of the government’s strategy to rebuild Haiti’s economy is to reduce trade and transport costs and increase access to regional and international markets. Through a TFF‐financed program launched in 2012, a team of multi‐sectoral specialists has helped the government work toward this goal by enhancing trade facilitation.

TFF support began with a first‐ever diagnostic of the trade facilitation environment in Haiti, including customs, ports and maritime transport systems, road transport, and agricultural supply chain. Drawing on the results of the diagnostics, the team has helped government identify specific measures and policy recommendations to improve competitiveness by enhancing logistics services and streamlining trade regulations.

The diagnostic provided relevant information on the conditions and performance of policies and regulations of institutions that influence trade facilitation, trade logistics, and standards in Haiti. It revealed, for instance, that customs suffers from lack of infrastructure, information systems, and procedures manuals. The small size of Port‐au‐Prince limits Haiti to significantly lower trade volumes than other ports in the region. A single company performs the functions of shipping

agent, cargo handler, and transporter of goods from the port to the metropolitan area, an anti‐competitive situation that further hampers innovation and efficiency.

TFF’s Haiti program has already registered some significant achievements, among them Haiti’s strengthened capacity to participate in multilateral negations as result of a WTO needs assessment, which was delivered as part of the program and used by the government in connection with the WTO ministerial conference in Bali. Through the customs evaluation, a benchmark has been set for modernizing customs, and with the new Customs Assessment Trade Toolkit, customs operations can self‐assess performance. A trade information portal provides increased transparency and accessibility of trade data and improves information exchange and cooperation among key regulatory agencies. TFF’s assistance has also had a catalytic effect, serving as a spring‐board to cement longer‐term engagement on trade facilitation in Haiti. Trade facilitation is now part of the World Bank’s country program in Haiti, making trade facilitation measures eligible for funding through IDA grants.

Europe and Central Asia

In Europe and Central Asia, TFF provided $2.6 million in grant support to three projects focused on transport and logistics issues, regional trade links, and strategies for increasing freight transit between Europe and East Asia. Kazakhstan, Kyrgyz Republic, and Moldova were the country beneficiaries.

TFF’s support to activities in Europe and Central Asia has helped teams engage and have a constructive dialogue with authorities. This has helped to refocus governments on regional issues. It has supported efforts to look beyond investments in only infrastructure and also focus on areas such as transport and logistics services, trade competitiveness and supply chain analysis, and harmonization of regulations and procedures along regional routes. TFF’s support has played a key role in project preparations, and its support has generated $500 million in lending, mainly in IDA countries.

In Moldova, technical assistance funded by TFF was crucial in developing a transport and logistics strategy, which was adopted by the government in 2013. The strategy covers all modes of transportation, providing a basis for sustainable development of Moldova’s transport sector. It will guide Moldova’s policy and investment decisions in the transport and logistics sectors. With the assistance of TFF, the World Bank’s regional team is poised to undertake the first supply chain analysis done in the region, and TFF’s support has also assisted countries in seeking membership in the European Union. The advisory service program in Kazakhstan exemplifies how TFF has been instrumental in engaging countries in the region in a trade facilitation dialogue that goes beyond infrastructure investments

Central Asia Results: Market Analysis for a New Silk Road

Kazakhstan has initiated reforms aiming to become the preferred international and Central Asian regional trade, logistics and business hub by 2016. Current trade levels show room for growth, with potential for increased trade within the region and with Europe, China, Central and South Asia, in addition to the current growing trade with Russia.

So far, Kazakhstan has had only limited success in attracting transit traffic along its rail routes. The government’s New Silk Road project seeks to double transit traffic through Kazakhstan by 2020 and increase it tenfold by 2050. Careful analysis of the preconditions for achieving such growth is needed, and the government asked the Bank for advice on how to attract additional transit freight and develop transport and logistics systems. A key aim is to attract transit freight from China and other Asian countries to and from Europe.

Funded by a TFF grant, a World Bank team worked with a broad group of stakeholders to analyze trade patterns and transport and logistics requirements of freight flows between East Asia and Europe and the potential for expanded transit traffic through Kazakhstan. The work involved

market and competitive analyses. The team examined the demand and operational and logistic issues associated with long‐distance freight operations between China and Europe. Focus was on identifying potential demand under a range of assumptions about the service characteristics of the rail routes through Kazakhstan and the main alternative routes.

The results of the effort have regional implications beyond Kazakhstan. China is multiplying its efforts to develop the land bridge with Europe. Most if not all Central Asian countries have an interest in capturing some of this traffic. Detailed assessments of the origins, destinations, values, and types of cargo, among other analysis performed as part of the activity, yield a wealth of data that the World Bank can use in other contexts.

Interregional Coordination: Inter‐REC Trade

The African Union’s continental integration agenda relies on progressive integration of the RECs as building blocks. Establishment of a single continental market would promote economic development through increased trade and competitiveness. Cross‐border trade has the potential to contribute to poverty alleviation, food security, and stability by providing economic opportunities in remote areas. However, when cross‐border trade involves two regions, the magnitude of the challenge increases. Inter‐REC trade facilitation challenges tend to be more complex than gateway trade issues, because the many parts of the entire corridor agenda meet at the interface between two RECs. In addition, whereas gateway trade is formal, inter‐REC trade also covers small‐scale, cross‐border exchange, often informal, whether by lack of adequate structure, by design, or because of the states of development of adjoining countries are unequal.

Figure 3.4 illustrates trade flows between RECs passing through Central Africa. Two Central Africa corridors—Trans‐Cameroon and Trans‐Equatorial—primarily link the region with overseas trading partners. The other corridors connect Central Africa to its neighbors through important land links that cross different RECs. These interfaces between two or more inter‐REC trade facilitation systems need harmonization.

Figure 3.4 Interregional Trade Flows in Central Africa

To help facilitate trade across African RECs, TFF provided support to the development of norms for the Trans‐African Highway (TAH) network (Figure 3.5). TAH is also an essential part of the Program for Infrastructure Development in Africa. The African Union intends for TAH to (i) improve road connectivity for landlocked developing countries, leading to better social and economic development; (ii) fill missing road links; and (iii) promote regional integration through integrated and coordinated development of the road infrastructure and resource mobilization. The result will be lower transportation costs, reduced delays in transit, improved efficiency, and increased trade and tourism. The TAH norms were adopted by the African Union ministers of transport in April 2014 and the head‐of‐states summit of June 2014.

Figure 3.5 Trans‐African Highway Network

Harmonization of Instruments and Policies

Trade facilitation instruments applicable in one REC are not always compatible with agreements in other regions. This lack of harmonization, an issue that international organizations such as

UNCTAD and WTO are working on, has several negative consequences. For example, road transport agreements between countries enable trucks and drivers from one country to operate and drive in the other. At the REC level, this relationship is usually achieved through a regional instrument. However, at the interface between two disharmonious RECs, goods need to be offloaded at the border to be reloaded on a truck from the destination country, increasing transport costs. The efficient movement of persons can also be affected, a particularly important issue for small‐scale trade in which traders accompany the goods. Within the confines of an REC, simplified procedures exist to enable citizens of member countries to move from one to another. At the interface of different RECs, movements across borders subject to visa and permit requirements can become costly and time consuming.

The burdensome costs of formal cross‐border trade push small‐scale traders outside the formal economy. The most commonly highlighted characteristic of informal trade is the avoidance of the customs clearing process. However, the fact that formal trade relies on third‐party transport and logistics providers while small‐scale and informal traders generally accompany the goods themselves across borders is far more relevant to the facilitation agenda.

Some RECs, notably ECOWAS for West Africa and COMESA for Eastern and Southern Africa, have designed specific mechanisms to address these problems. If effectively implemented, they would reduce the cost of trade and enable significant portions of informal trade to become formal. Expanding those instruments to inter‐REC small‐scale trade may be difficult, but it could be addressed at the bilateral level by the two neighboring countries. Trade between Central and West Africa faces problems because it involves two different RECs and a number of other transportation and logistics challenges. In this regard, TFF support on cross‐border trade between Cameroon and Nigeria provides a starting point for ECOWAS‐ECCAS collaboration.

Border Management Agencies and Facilities

For inter‐REC trade, all procedures take place at the border and, in most cases, outside the main trading routes. The latter often means that the border posts used in inter‐REC trade are not well equipped. Notably, specialized border agencies (and among them sanitary and phytosanitary agencies) may lack adequate equipment for fulfilling their control obligations. As a consequence, for remote border posts, infrastructure, facilities, and the capability of the border management agencies are often stretched. This creates a difficult environment, particularly for small‐scale and women traders.

In Central Africa, TFF support at the DRC’s eastern border promoted commerce with East Africa through improvements to border management agencies and facilities. This work is now informing an IDA‐funded project for improving the conditions of cross‐border trade in the Great Lakes Region of Africa. The project will improve the border‐crossing conditions for traders, particularly women, who are vulnerable to violence and harassment. The project additionally seeks to provide an environment where traders are better informed and organized, so they can benefit

from formal trade. It includes training for customs officials and encourages dialogue between DRC and its neighbors. It is also making physical improvements to facilities, treating one border crossing as a pilot that could be scaled up to others.

Interregional Coordination Results: Trade Between Nigeria and Cameroon

Cameroon and Nigeria share a border that extends nearly 1,700 kilometers. The two countries share strong cultural and historical ties as well. The Cross‐Border Trade report: Estimating Trade Flows, Describing Trade Relationships, and Identifying Barriers to Cross‐Border Trade between Cameroon and Nigeria, reviewed barriers at border areas of Cameroon and Nigeria that are representative of border areas of ECOWAS and CEMAC. Such borders are usually neglected, and trade is informal and therefore grossly underreported. For example, the report estimated actual bilateral trade to be above $230 million, significantly higher than the officially recorded non‐oil trade flows of between $10 million and $40 million. When one includes the large flows of re‐exports that flow between the two countries, the estimated bilateral trade flows is $1 billion. The report makes a number of recommendations for facilitating cross‐border trade.

i. Overhaul the import and export restrictions. Such reforms will have to overcome

significant resistance from those groups benefitting from existing arrangements.

ii. Formalize the existing import procedures to ensure that actual trade costs do not increase

as part of the reforms. The formalization of this regime demands discussions at the

CEMAC and ECOWAS levels to ensure these procedures are compatible with

commitments at the regional level.

iii. Increase transparency of procedures and regulations for product registration.

iv. Make regulatory reforms complementing the investment in hard infrastructure to

effectively reduce trade costs and maximize returns on investment in roads.

TFF border management activity in Cameroon and Nigeria helps identify key barriers as well as specific policy recommendations for addressing the barriers. It thereby helps in formalizing trade between the two countries. In particular, the assessment stresses the lack of transparency and large regulatory barriers that need to be addressed to complement and maximize the returns on investment in hard infrastructure already being undertaken. It provides specific recommendations to address these barriers, and the preliminary findings have been shared with the government. The potential benefits from this TFF‐financed activity are expected to be critical to deepening the strategically important regional integration between West and Central Africa.

4. Expanding Thematic Insights

Overcoming trade facilitation challenges requires profound policy reforms founded on a careful diagnosis and political economy analysis. These would simultaneously measure and address bottlenecks and identify key stakeholders, their respective interests, and the impact of possible reforms. Just as important, these activities also should identify both champions and opponents of reforms, and attempt to uncover the sometimes hidden motivations and incentives that work to undermine modernization and reform in trade facilitation. While infrastructure work is fundamental, the related legal and regulatory frameworks or other associated institutions are essential. TFF‐supported work has broadened awareness that the logistics industry is not monolithic and that companies and individuals operate according to different business models requiring tailored interventions. Through its support to the customs and border management agenda, TFF has complemented other trade facilitation programs, for example by contributing to the needs assessment during the negotiation of the WTO Trade Facilitation Agreement (TFA). This support helped prepare the countries to comply with internationally recommended practices for border management. It contributed to a paradigm shift in resolving issues of joint border operations, and improved the relationship between economic operators and control agency personnel. TFF also supported a product‐specific and value‐chain approach to trade facilitation, notably for agricultural and agribusiness trade.

Enhancing Evidence‐Based Policy Formulation for Trade

Technical solutions to better facilitate trade may be part of the solution, but emerging evidence indicates that even when they are well targeted and properly implemented, technical solutions may still not succeed in achieving the stated goal of an intervention, because issues related to the broader political economy have been given insufficient attention. Overcoming challenges will require significant policy reforms that must be founded not only on a careful technical diagnosis but also on a sophisticated political economy analysis as an integral part of project preparation. TFF has increasingly been supporting activities that allow for broader political economy analysis in the context of trade facilitation. This includes identifying key stakeholders and their respective interests in a particular country, assessing the impacts of possible reforms, and identifying and nurturing champions. In building coalitions for reform, evidence plays an important role. Too often, opinions and perceptions prevail that are biased, unfounded, or distorted to suit the needs of opponents with a vested interest in the status quo. And attempts to canvas stakeholder opinion sometimes leave out key parties or pose questions in such a way as to yield predictable responses.

RECs and corridor management institutions have spearheaded the development of this evidence through transport observatories that monitor corridor performance. The priority is on getting the

diagnosis right and, more importantly, sharing it among all stakeholders to build consensus for reforms. TFF was designed to support this effort, with an emphasis on data collection.

Instruments for Collecting the Evidence

Interventions by TFF draw from a toolbox of analysis techniques developed by the World Bank and other international institutions, covering a wide range of granularity in the data generated, from interview‐based methods to the collection of big data from trade and logistics IT systems. Observation and diagnosis supported by TFF are shared and validated with stakeholders, leading to recommendations on remedial measures and practical interventions. Figure 4.1 Increasing Granularity of Data Collected for Diagnostic Purposes

The methodologies include robust diagnostic tools such as the Trade and Transport Facilitation Assessment developed by the World Bank and time release studies developed by the World Customs Organization (WCO). These instruments have already influenced the trade facilitation policy dialogue—both within the World Bank and on the clients’ side. (See Box 4.1 for more on time release studies.) The Corridor Facilitation Program, through transport observatories and trucking surveys, provides robust methodological frameworks for generating useful trade data and organizing dialogues with stakeholders toward facilitating the seamless flow of goods and services along trade corridors. By gathering robust information and making it available to decision makers and donors, the TFF helps mainstream the trade facilitation agenda in overall development strategies. These activities

are crucial for designing sustainable trade strategies and action plans for future World Bank‐ and donor‐financed activities.

Trade and Transport Facilitation Assessment (TFFA)

The TTFA methodology—adapted to country‐specific features—has evolved into the primary

instrument in the World Bank for assessing the trade facilitation and logistics constraints at the

country, corridor, and sub‐regional levels. This methodology provides a sound basis for

identifying trade facilitation issues and has proven to be effective for organizing and conducting

informed policy dialogue. The methodological approach used in TTFA complements the

methodology used in Diagnostic Trade Integration Studies. These two tools, used in conjunction,

yield action matrices that are representative of the trade facilitation challenges that countries

need to address.

TFF‐financed TTFAs have been undertaken in the Democratic Republic of Congo, Liberia,

Moldova, Vietnam, Yemen, and Zimbabwe. The list of activities in the Trade Facilitation Audit in

DRC provides a good illustration of how these activities fit into the overall mission of the TFF.

The Democratic Republic of Congo’s TTFA provided a strategic overview of the country’s trade

facilitation and logistics issues, based on a systematic analysis of trade procedures along the

major corridors linking DRC with neighboring countries. TFF assistance came primarily in the form

of technical advisory services built through a participative consensus‐building approach with key

stakeholders. The following outputs arose from this activity:

An audit report of the existing trading and transport procedures for imports and exports

in DRC.

An institutional review of public and private organizations involved in international trade

procedures.

An analysis of political economy issues at play within and between the organizations.

Preparation of a remedial and implementation activity and roadmap.

The methodology is being applied in three TFF‐financed multi‐country activities aimed at

deepening regional integration. The region‐focused activities are in Central America, Central Asia,

and Southern Africa.

Central America: Trade Facilitation for Regional Integration. Costa Rica, El Salvador, Guatemala,

Honduras, Nicaragua, and Panama are involved in a project to improve the quality of the trading

environment by enhancing the efficiency of the supply chain, and thereby reducing trade‐related

transaction costs. Customs modernization work has focused on Costa Rica, El Salvador, and

Nicaragua. An assessment of the agencies has been conducted, and follow‐up technical

assistance has been given in the areas deemed lacking. Guatemala has formally requested the

CATT, with implementation set for 2015.

Work in the transport sector started with a TTFA in Nicaragua. A survey was conducted to analyze

the trucking sector in the region and a follow‐up report identified policy recommendations to

improve efficiency in cargo transport, transport logistics, and fuel consumption. Individual

country notes highlight key national priority areas. The regulatory aspect of trade in Central

America has also been a focus of TFF support. An inventory of nontariff measures (NTMs) has

been conducted and there are plans to host the information on a database accessible to the

trading community, enabling easy cost‐benefit analysis of select NTMs in the region.

Central Asia: Addressing Trade Logistics Bottlenecks and Facilitating International Trade and

Transportation in Central Asia.13The objective of this TFF activity is to support improvements in

trade logistics in Central Asian countries. The effort has prompted a follow‐up investment activity

for the port of Turkmenbashi, Turkmenistan.

Africa. For the Southern African Customs Union (SACU), the TTFA is expected to provide an

analysis of the state of the trade facilitation and logistics systems to support policy and strategy

decisions for the region, especially (i) through identifying trade costs that hamper development

of regional supply chains and (ii) by providing information on the performance of logistics and

transport services that are at least partly in the realm of the private sector, and (iii) providing

information on the policy and regulatory environment. In conjunction with the TTFA, a specific

component of the Trade and Transport Corridor Toolkit (soon to be released by the World Bank)

will be used for specific corridors in SACU, linking local suppliers to multinational supply chains.

The corridor toolkit is used for the planning, management, operation, and performance

monitoring of international trade corridors.

Box 4.1 Time Release Studies

The main aim of trade facilitation is to reduce the time and cost needed for trade transactions. The time release study (TRS) is a methodology championed by the World Customs Organization to identify bottlenecks in the trade process and fix the root cause of the delays. The approach follows processes developed for the Common Market for Eastern and Southern Africa (COMESA) region and has an internal capacity‐building activity for designing, collecting, and analyzing results.

The WCO Council and the WTO trade facilitation negotiations have endorsed the TRS methodology. A simple model of TRS measures the time between the lodgments of import declaration documents to customs to the time the goods are delivered from the customs storage. The time for the release of the means of transport is measured at all the applicable ports, for example seaports, airports, and land‐border crossings. The time taken by other government agencies (OGAs) is also measured. The WCO TRS guide enables the measurement of the time between the arrival and release of goods. It allows for analytical work regarding the type of goods, modes of transport, OGA interventions, trade facilitation measures, and rationale for the delays at each stage. The WCO Guide was recently revised to take into

13 The countries in the Central Asia activity are Kazakhstan, Kyrgyz Republic, Tajikistan, Turkmenistan, and Uzbekistan.

account different modes of transport, place more emphasis on land‐border crossing posts and one‐stop border posts, and provide more description on process.

TRS has three phases: preparation, data collection and recording, and data analysis and conclusion. Preparation starts with a policy decision to carry out the TRS followed by establishment of a working group and terms of reference. The working group determines the design and the scope of the TRS. Its composition should be representative and include, among others, customs management, customs at target border post, private sector, and other border management bodies. Decisions pertaining to data collection during the second phase should be made early. The third phase of the study involves verification and analysis of the data and preparation of the report.

Addressing the Logistics Service Dimension of Trade Facilitation

Trucking is a sort of paradox. It presents the apparent characteristics of a competitive sector. There are usually large numbers of competing trucking operators. The barriers to entry are low, second‐hand trucks are inexpensive and access criteria, when they exist, not stringent. And there is limited specialization of trucking services, so that the same type of truck can carry a large range of goods. But under certain forms of organization, oligopolistic and rent‐seeking behavior occurs, with potentially severe consequences on prices. Understanding how the trucking industry operates and when its characteristics are is essential to defining policy interventions.

Results of large‐scale trucking surveys illuminate how access to freight has been impacting transport operations and price‐setting. The knowledge gained is informing major corridor projects, for example, by providing critical input to design of the regional DPO for West Africa. Clients and World Bank teams recognize that the logistics industry is not monolithic and companies and individuals operate according to different business models. Therefore, programs promoting efficiency and professionalization of the industry need to be tailored to the characteristics of the geographic entities they target.

Trucking Surveys

To optimize professionalization of trucking services, TFF sought a better understanding of the nature of the sector by funding several surveys. Surveys in East Africa as a component of the Corridor Facilitation Program led to wider involvement of the trucking industry in the implementation of axle load regulations. Other surveys were conducted in Burkina Faso and Côte d’Ivoire also as component of the Corridor Facilitation Program, accompanying the preparation of the World Bank’s regional DPO for West Africa; in Benin and Niger, as a component of the ECOWAS Joint Border Program; in the Democratic Republic of the Congo under the international

trade procedures simplification activity; and in Haiti as part of the multifaceted diagnosis in the Haiti trade facilitation program.

New Light on Price and Cost Dynamics

A lack of criteria for access to the profession and of transparent mechanisms for access to freight has given rise to the emergence of a few dominant operators that allocate freight to truckers at a large profit to themselves but at barely break‐even rates to the operators hauling the freight. This market structure has triggered the emergence of widely different business models, all seeking to benefit from or cope with an imperfect system. Examples include small informal operators that transport for their own account, relatively efficient trucking companies with direct contracts with carrying and forwarding agents, and small trucking companies that depend on multiple intermediaries using predatory practices.

In addition, operating conditions that lead to slow rotation time constitute a major problem limiting the profitability of the trucking industry. Slow rotation time refers to the relatively small number of roundtrips done by the average truck per year. Factors increasing rotation time include (i) pre‐departure delays, such as waiting time before obtaining a new load, and often, once the load has been secured, inefficiencies at port; (ii) voyage delays, due to poor road conditions, trucks in bad repair, and border crossing delays. Inefficient final clearance processing at destination creates traffic imbalances that may lead to long waiting time before obtaining a return load.

The Total Logistics Costs Study for West and Central Africa explored these inter‐related constraints, while the various trucking surveys provided a better understanding of how trucking operators adjust their structure to address these challenges.

Implications for Design of Reform Programs for the Trucking Industry

Reforming the structure of the trucking industry to achieve greater levels of trade facilitation requires replacing opaque practices with a system that recognizes transport operators based on their ability to provide professional‐quality transport services in a professional manner (see Box 4.2). If combined with enhanced transparency in the allocation of cargo to transporters, a more competitive market structure will emerge that brings prices in line with costs. The restructuring of the road transport sector requires addressing at least two core issues:

i. Access to the profession of transport operator with developed regional regulations. As a result, some informal operators with limited capacity for compliance will no longer be allowed to operate, enabling professional operators to function more efficiently and profitably.

ii. Liberalized access to domestic and international transport markets, so as to introduce

competition as an incentive for efficiency. Formalization of the contractual relationship between trucking companies and clients (shippers or clearing and forwarding agents) will contribute to the elimination of intermediaries with predatory practices.

To sustain this restructuring, it is important to address operational constraints faced by the trucking industry, largely related to efficiency of border management. These principles have been integrated into the World Bank’s Regional DPO for West Africa.14

Box 4.2 Spillover Effects of the Professionalization of the Trucking Industry Professionalization of the trucking industry generates spillover effects that engender stronger trade facilitation. Better‐managed trucking companies are more compliant with safety and load regulations. Road safety–related interventions of TFF illustrate the positive spillover effects of more professional road transport operators. TFF supported the road safety program of the Central Corridor in East Africa and participated to the road safety component, for commercial freight, of the World Bank’s CEMAC Trade and Transport Facilitation Program. Experience accumulated was compiled into a publication supported by TFF. Guidelines for Mainstreaming Road Safety in Regional Trade Road Corridors

14TFF contributed to the analysis of the sector by disentangling the challenges and by obtaining a better knowledge of the trucking industry through surveys. Other important aspects of the preparation of the reform, notably the political economy analysis and the socioeconomic impact assessment, were funded through other sources.

have been adopted by the African Development Bank as standard for including road safety issues in corridor transport projects. The road safety intervention on the Central Corridor in Tanzania resulted in a new curriculum for truck drivers that may become the new standard for all ECA countries. Legislation on licensing and regulation of heavy vehicles adopted in Tanzania includes mandatory training of more than 100,000 truck drivers. A ban on import of trucks older than 10 years, stepped up vehicle inspections, and establishment of an independent vehicle inspection unit. The initiative also looked at ways to minimize the hazards to road safety at the borders between Tanzania, Rwanda, and Burundi, due to the change of the driving side of the road. A plan proposing adjustments to infrastructure and signage was proposed for the whole Central Corridor for adoption by Tanroads. TFF provided technical assistance to improve road safety in Chad, Cameroon, and the Central African Republic as part of the implementation of the Africa Road Safety Corridors Initiative and the CEMAC Transport and Transit Facilitation Project after an assessment found severe shortcomings in road safety in the three countries. Governments lacked awareness of the economic and social impact of road safety as well as serious deficiencies in technical skills and a lack of effective institutions to manage and coordinate road safety at the national and regional levels. The project focused on improving accident prevention and road safety management, harmonizing the regional legal framework, and capacity building for transport and road safety professionals, and mainstreaming safety measures and road traffic injury prevention best practices. The implementation of the various activities is still at a fairly early stage, but those activities that are under way are making good progress.

Logistics Strategy for a Landlocked Country

For a landlocked developing country such as Rwanda, boosting trade requires developing and building trade logistics distribution and services. This was the focus of TFF assistance. The National Logistics and Distribution Services Strategy was developed to help mitigate Rwanda’s logistical challenges. The strategy aimed to: (i) provide an enhanced role for Rwanda’s logistics system; (ii) incorporate logistics services with value‐added activities; (iii) strategically align logistics and distribution facilities to production centers; and (iv) enable Rwanda to become a net exporter of logistics services. The grant identified trade logistics constraints faced by agribusiness and suggested solutions. Grant support for design and feasibility activities for developing trade logistics and distribution entailed an analysis of several factors: (a) market potential for trade logistics services, (b) structure of the logistics and distribution industry, (c) trade logistics constraints for three key agribusiness products, (d) the impact of regional developments, (e) infrastructure and zones, (f) human resources and skills, (g) financing, and (h) legislation, regulation and policy impacting logistics and distribution services.

The Rwanda Logistics and Distribution Services strategy submitted to the government in 2012 included the following:

(1) White paper on the Rwanda Logistics and Distribution Services strategy (2) Cabinet paper on the Rwanda Logistics and Distribution Services strategy (3) Consultant reports Volumes I and II as supporting reports to the Rwanda Logistics and

Distribution Services strategy.

The strategy was accepted and later endorsed by the cabinet, followed by a meeting with private sector stakeholders. The World Bank, IFC, donors, and the Rwandan government have fully endorsed the strategy. The strategy proposed eight trade logistics projects that require public and private investments of up to $100 million across three strategic themes: logistics facilities to capitalize on longer value chains in the horticultural sector; regional logistics centers and land bridge improvements for the extended market’s transit traffic; and air cargo market development to respond to overlapping market opportunities.

The strategy has informed major actions including the following:

(i) Preparation and adoption of the White Paper to the Cabinet for conclusion; (ii) Setting‐up of the institutional framework to lead the implementation of the strategy

as per the recommendations in the white paper (iii) Mobilizing all interested parties to develop partner’s action plan to assist the

government in the strategy implementation with the partners. (iv) Partners, including TMEA funded and conducted feasibility studies for the eight

projects. Transactions for three of those projects – Kigali Logistics Platform, Off‐dock Facilities and Bonded Warehouses are underway to identify suitable private sector partners to invest in the development of these facilities.

Harnessing TFF to Inform the Broader Trade Agenda

At the multilateral level, TFF has informed the negotiations of the WTO Trade Facilitation Agreement (TFA) and is positioned to provide the basis for its implementation. TFF has also helped move the consensus around coherent regional trade facilitation reforms, and it has informed the broader customs union agenda in Africa. One of its key achievements is the contribution to the economic partnership process in West Africa that provides the framework for contribution to trade facilitation in other regions, particularly Central Africa, which is lagging behind other regions and which also has a high concentration of TFF activities.

Informing the Multilateral Agenda

An alignment has emerged between TFF’s demand‐driven portfolio and the various articles of

the Bali agreement, providing TFF a unique role in helping low‐income countries, particularly the

least developed, implement the agreement within the framework of their long‐term trade and

development plans. This section further elaborates on how specific projects could provide the

basis for participation by capitalizing on areas where progress has been achieved. Since inception,

TFF has complemented other trade facilitation programs, including contributing to the needs

assessment during the negotiation of TFA. Through its support to customs unions, TFF stirred

debate among regional and national stakeholders on issues under discussion at the WTO,

contributing to convergence of views on several TFA articles. Table 4.1 presents selected TFF

interventions and the related articles of the TFA.

Table 4.1 TFF Interventions Related to Trade Facilitation Agreements

Trade Facilitation Agreement (TFA)

TFF interventions with relevance to the TFA

Article 1: Trade Information Portal (TIP)

8 UEMOA* countries, Lesotho, Lao PDR, and Haiti

Article 2: Consultations Regional Economic Community Transport Coordination Committee (REC TTC), all regions, revision of customs codes (UEMOA, ECOWAS, COMESA)*

Article 3: Advance Ruling Abidjan‐Ouagadougou‐Bamako‐Niamey corridors Article 7: Clearance Release and clearance of goods: Cameroon, Nigeria, Benin,

Togo, and Côte d’Ivoire Authorized Economic Operators (AEO): Côte d’Ivoire, Ghana, Lesotho, and Swaziland

Article 8: Border Agency Collaboration

One‐stop border post for ECOWAS, Northern Corridor in East Africa, and South Africa/Lesotho border

Article 10: Formality for import and export

Support to procedure automation in single windows of Douala, Lesotho, and Lao PDR; Peer‐to‐Peer Review of African Single Windows (with AACE): Burkina Faso, Cameroon, Ghana, Madagascar, Senegal

Article 11: Freedom of transit CEMAC* transit regime, Mozambique/South Africa, revision of UEMOA/ECOWAS customs code

* AACE = African Alliance for Electronic Commerce; CEMAC = Commission de la Communauté Economique et Monétaire; COMESA = Common Market for Eastern and Southern Africa; ECOWAS = Economic Community of West African States; UEMOA = West African Economic and Monetary Union.

TFF assisted member states in relation to the COMESA Common Market Regulation (CMR), providing a platform for compliance with both the WCO’s Revised Kyoto Convention (RKC) and TFA. The Bali agreement emphasizes cooperation between customs and authorities on trade facilitation and customs compliance issues as a means toward more efficient customs procedures. This focus is exactly what COMESA’s customs union is expected to achieve. In all, 18 countries—Burundi, the Comoros, Democratic Republic of the Congo, Djibouti, Egypt, Eritrea, Ethiopia, Kenya, Madagascar, Malawi, Mauritius, Rwanda, Seychelles, Sudan, Swaziland, Uganda, Zambia, and Zimbabwe—are receiving assistance through the COMESA customs union agenda, another illustration of how TFF anticipated the support to low‐income countries in implementing TFA while also fostering the regional integration agenda.15 Enhanced efficiency of gateway ports, particularly in the development of single windows for international trade, marks a third area where worthwhile milestones have been achieved. Single windows help automate international trade transactions and reduce costs and delays. However, progress has been uneven, and only a fraction of all single windows effectively link all agencies involved in international trade. TFF provided funding to the African Alliance for Electronic Commerce (AACE), an association of African single windows, to develop a peer review framework that enables examination of one actor’s performance or practices in a particular area by another. The main point is to help the actor under review improve performance, adopt best practices, and comply with standards and principles. TFF focused on promoting a broad consensus among all players on the assessment and the means to improve the efficiency of SWs.

Building Regional Consensus

Dialogue is vital to enacting reform, and because trade involves many different sectors and governments, TFF has played a key convening role in fostering exchange of views. Trade and logistics are primarily private sector activities. However, governments and public institutions largely determine the conditions under which those activities take place. To use an analogy, the players are private entities, but the rules and the referee are public entities. Governments play an essential role in the trade facilitation reform processes. They set up the investment, business, and regulatory environments. They plan—and still largely provide—trade‐supporting infrastructure. They define the applicable trade procedures. The private operators are equally important to reform because they ultimately will have to conduct their businesses in the resulting environment. It is important, therefore, that all concerned parties are fully involved in the reform processes.

Practical trade and transport facilitation reform involves interventions on components of the corridors and trade‐related infrastructure. Determining what to fix requires a diagnostic based on facts and evidence endorsed by all affected parties.

15See the documentary on trade facilitation in the COMESA region, “Trade and Investment in the Age of Lightening,” at https://youtube.com/watch?v=sOqDFnp540s.

Figure 4.2 Shape of Policy Dialogue

The policy dialogue needs to focus on the factors hampering efficiency of trade and logistics activities, but should also pinpoint the levers that need to be activated to address the situation. Understanding the interests of the parties in the policy dialogue within a comprehensive political economy analysis context is an integral part of the diagnostic (see Figure 4.2). This understanding of interests can help ensure commitment of stakeholders to the reform process and make it more likely that the outcome of consensus will be sustained.

Until recently, national governments and RECs had put the emphasis on investment in infrastructure and paid inadequate attention to policy reform. The TFF platform brings together governments, stakeholders, transport experts, and trade specialists, providing a forum linking programs to various donors and countries. Such a forum can enhance processes at seaports and land border crossings helping reduce delays, costs, and uncertainty associated with trade traffic. The forum also promotes the competitive provision of transport, logistics, and distribution services.

Overall, the platform aims to deliver stakeholders (i) the best information on rules and regulations that affect the provision and cost of transport and logistics services, (ii) well designed trade and regulatory reforms and the capacity required for effective implementation, (iii) estimates of likely outcomes of reforms as well as identification of those who may lose, and (iv) policy options to address any adverse consequences.

The Transit Facilitation Week (TFW) in Central Africa provided a successful test of this concept. TFW enabled large stakeholders to achieve a common understanding of trade facilitation and regional integration challenges on the Douala‐to‐Chad and Central African Republic corridors and for arriving at a consensual action plan. The Central African platform is also helping to transfer knowledge and expertise from countries in other regions. The platform could further build on

and exploit the World Bank’s recently created Global Expert Team on trade facilitation and logistics. The team brings together World Bank expertise on infrastructure, trade, transport, and logistics.

Supporting Customs Unions

The goal of regional trade integration in Africa has been plagued for years by implementation complications. TFF has contributed to move it forward, working with the commissions of three RECs: the West African Economic and Monetary Union (UEMOA), ECOWAS, and COMESA on customs reform and customs unions. In response to their requests, TFF supported development of community customs codes and related regional instruments such as common external tariffs, common tariff nomenclatures, and customs management regulations. The support included harmonization of national legislation through analysis of the gap between national customs laws and regional customs codes. Regional instruments were validated through consultation with representative institutions from public border management agencies and the private sector.

But the right instruments and infrastructure won’t succeed without the proper personnel to implement and use them. Consequently, TFF also supported professionalization and capacity building for customs agents and private sector operators. For example, the regional capacity‐building program focuses on leadership and technical skill development for customs administrators has enhanced the capacity of over 300 senior managers in 17 programs.

Supporting Implementation of the Economic Partnership Agreement (EPA)

The most prominent trade topic for African, Caribbean, and Pacific countries since 2000 has been the negotiation for a new trade regime that is consistent with the evolving multilateral trading system under the auspices of the WTO. The most contentious aspect has been the development dimension, including the capacity and supply constraints that prevent these countries from boosting trade. TFF is instrumental in moving this agenda forward, particularly in West Africa. TFF activities are consistent with the needs expressed by West African governments, RECs, the private sector, and civil society.

Informing the Landlocked Developing Countries Plan of Action

In November 2014, the second United Nations Conference on Landlocked Developing Countries (LLDCs) was held in Vienna, and out of this meeting came the Vienna Programme of Action for Landlocked Developing Countries for the Decade 2014–2024. This program seeks to foster development and boost trade. Transit is an essential aspect, and the TFF is providing vital support to the countries identified in the program.

The goals and objectives of the Vienna program are as follows:

i. To promote unfettered, efficient, and cost‐effective access to and from the sea by all means of transport on the basis of the freedom of transit, and other related measures, and in accordance with applicable rules of international law.

ii. To reduce trade transaction and transport costs and improve international trade services through simplification and standardization of rules and regulations, so as to increase the competitiveness of exports of landlocked developing countries and reduce the costs of imports.

iii. To develop transit transport infrastructure networks and complete missing links connecting landlocked developing countries.

iv. To implement bilateral, regional, and international legal instruments and strengthen regional integration.

v. To promote growth and increased participation in global trade, through structural transformation related to enhanced productive capacity development, value addition, diversification, and reduction of dependency on commodities.

vi. To enhance and strengthen international support for landlocked developing countries to address the needs and challenges arising from landlocked location in order to eradicate poverty and promote sustainable development.

TFF delivers supports on a wide variety of projects to 21 of 29 LLDCs, making the TFF a unique vehicle for providing support consistent with countries’ long‐term development plans.

Improving Border Management at Gateways and in the Hinterland

Border management, particularly land‐border‐crossing issues, is central to the LLDCs and their transit/coastal neighbors, a central area of support by TFF. A group of TFF‐funded activities has aimed at transforming the nature of the relationship between economic operators, on one hand, and enforcement and regulatory agencies, on the other. Mistrust between the two groups has led to a growing layer of controls and checks against unethical and predatory practices. To address the situation and ensure that compliant operators are not burdened by heavy controls, TFF supported several activities aiming at promoting and rewarding compliance. Support to authorized economic operators, integrity and performance contracts programs, and the Charter for Small‐Scale traders are all examples of TFF’s effort to help clients balance effective border control with simplification of the trade procedures for the operators.16

Promoting Compliance and Ethics at the Border

The customs integrity and performance contract program is a bold and original reform process initiated in 2009 to modernize the Cameroon Customs Administration. The objective is to

16TFF funded a feasibility study for the AEO program along the Abidjan‐Lagos Corridor and the pilot program for Ghana and Côte d’Ivoire launched following a positive evaluation by the study. TFF also supported preferred trader programs for Lesotho and Swaziland.

facilitate trade and fight against fraud and bad practices. At the heart of this process are performance contracts signed between the director general of customs and customs officers, establishing objective measurement of performance in terms of revenue collection and trade facilitation through indicators generated by the Automated System for Customs Data (ASYCUDA).

Increasing Efficiency of Customs Administrations

In many developing countries, customs duties provide an important source of revenue, and government dependence on the revenue stream from duties sometimes leads to opposition to trade facilitation reforms that might threaten it. In Cameroon, TFF piloted a plan to increase the efficiency of customs administration so as to ensure collection of duties while also expediting the cargo clearance of traders who comply. Cameroon Customs implemented a new performance‐based policy to accomplish this goal. This pilot process relied on performance indicators and targets calculated through the Cameroon Customs IT system. Individual inspectors and importers signed separate agreements with the director general of customs committing them to meeting performance benchmarks on cargo processing time. The pilot was launched in two key customs offices in Cameroon. The Cameroon Customs IT system compiled data on the average time taken for cargo clearance—both before and after the experiment with performance‐based contracts. The result was a substantial reduction in cargo‐processing times. This was accomplished without compromising revenue collected at the port. In fact, the revenue collected increased subsequent to the launch of the pilot activity. Cargo‐clearance delays for traders deemed to be usually compliant were reduced considerably. For example:

Processing time for customs declaration at Douala port 1 by customs officers decreased from about 11 hours in 2010 to 3 hours in 2011.

Customs revenues increased by 22 percent from 2010 to 2011.

Dwell time for importers under contract was approximately four days lower than the port average of 19 days.

In summary, performance contracts yielded significant benefits to importers, creating a virtuous cycle of improved performance for both customs brokers and importers. In September 2013, Cameroon customs authorities requested assistance to fully automate clearance, create databases for goods value and fraud cases, improve the risk analysis system, and create a database for post‐audit verification and provision of scanners. Data collection attempts in past years have been undermined by uncooperative customs officers and managers. Any record would make fraud transparent and give officers less leeway to negotiate bribes. TFF is supporting further reforms, including empowering the customs director general to revoke broker licenses, providing transparent and computerized data, and expanding use of performance contracts.

Building Effective Single Windows

Trade facilitation at gateway and border crossing posts in low‐income countries is a complex process that requires governments and business stakeholders to allocate adequate institutional, human, and financial resources over a long period. In Lao PDR, TFF supported the development of a national blueprint and a practical implementation plan for a National Single Window. The approach was replicated for the Lesotho Trade Portal, launched in March 2014.

Trade and transportation work by the World Bank and other donors have identified the institutional bottlenecks in the Port of Douala as a significant constraint on trade. TFF’s specific objective is to simplify the import, export, and trade procedures through a single‐window process and to extend the concept of e‐GUCE (Guichet Unique du Commerce Exterieur) in the CEMAC region. Moving from a manual to a paperless system will simplify customs procedures and thereby promote gateway efficiency. Joint implementation of the electronic single window with the transit regime is expected to give a boost to intraregional trade and strengthen regional integration in CEMAC.

This project has significantly changed the landscape of trade facilitation in Central Africa, particularly for the countries that rely on Douala as the gateway. The feasibility study to improve the e‐GUCE platform was completed in August 2012. A wide assessment conducted among the

key partner institutions identified actions to be supported under the project, targeting the IT units and their key staff. The main agencies at the gateway—customs, GUCE, and the Port Authority of Douala (PAD)—are collaborating; the major stakeholders embrace the benefits of automating external trade procedures, and are working around a commonly agreed agenda. The initiative has the support of Cameroon’s leadership. The prime minister formally approved implementation of the automation agenda. The minister of finance urged the port community leaders to push the agenda. Training for technical and managerial staff in GUCE and partner agencies was provided in early 2012. This followed computer science modules provided in late 2011. Staff from Chad, the Central African Republic, and the Republic of Congo also participated in anticipation of the future extension of GUCE services in the regional countries. The action plan adopted in 2014 is being satisfactorily implemented despite some delays. The program is now well owned by the government, as illustrated by the decisions regularly adopted by the steering committee on several issues related to the trade facilitation agenda. Overall, the joint implementation of the transit and the single window in Douala for Central Africa will lead to a stronger regional integration in the CEMAC region and an increase of intraregional trade. In addition, the activity will facilitate the electronic processes for some transit procedures and the sensitization and capacity building for shippers and transit agents from landlocked countries.

Establishing an electronic single window environment for improving trade facilitation requires an evolutionary long‐term development roadmap. Figure 4.3 illustrates this continuous improvement cycle. First, high‐level policymakers institutionalize the capability to realize this endeavor, both for foreign trade competitiveness and also regional integration.

Figure 4.3 The Continuous Improvement Cycle

Second, a simplified evolutionary roadmap for single windows enables policymakers and managers to compare their country’s trade practices the best‐practices functions in this model—and determine the next stage for their phased single window development. This has been done in the case of GUCE as part of peer‐to‐peer reviews comparing experience with single windows in Africa.17

Participants at the Douala conference identified the following critical success factors:

The need for strong leadership and continuous involvement of all stakeholders in the

reform process in order to conduct coherent, effective, and convergent actions

The importance of focusing not only on government’s trade facilitation and simplification

needs but also on those of traders and logistics service providers and engaging them

collaboratively in the trade reform process

It was further noted that donors such as the World Bank were needed to continuously support the assessment activities to understand the single window’s current status and drive the effective implementation roadmap.

Joint Border Posts

TFF has helped African countries reach milestones in streamlining their border crossings. Surveys showed that delays at borders have a significant cost for trucking companies. (An idle truck costs around $350 per day in Eastern Africa and $450 per day in Southern Africa, for instance.) These translate into higher transport prices for shippers. To reduce border crossing time, RECs and countries have adopted one‐stop border posts (OSBPs) which combine border management activities. TFF has ensured that this approach dedicates sufficient attention to the necessary reforms of the regulatory and procedural environment.

In East Africa, border‐crossing surveys were conducted to establish a baseline and generate data for analysis of the inefficiencies of three main border posts along the Northern Corridor. While the surveys were still under way, customs authorities in Kenya and Uganda made modifications to certain procedures that drastically reduced border‐crossings times. The surveys thus provided real‐time measurement of the impact of these actions. Without infrastructure refurbishments, clearance times dropped from more than 48 hours to 6 hours, and the average border‐crossing time was reduced from 24 to 4 hours. TFF helped convert the diagnosis provided by the surveys into programs implemented by the corridor management institution, notably on the issue of

17Forexample,see the following reports: Report of the Workshop on the Impact of Single Windows on the Passage of Goods across Ports and on the Trade Facilitation in General, Doala, Cameroon, Sept. 8–11, 2014; Cameroon Single Window Peer Review Report, African Alliance for Electronic Commerce (AACE)/World Bank, 2014; Senegal Single Window Peer Review Report, AACE/World Bank, 2014; Ghana Single Window Peer Review Report, AACE/World Bank, 2014; Mauritius Single Window Peer Review Report, AACE/World Bank, 2014.

priority order for trucks (tanker trucks, for instance, because of the hazardous nature of the cargo) and a master plan for the provision of rest stops along the entire Northern Corridor route. In the Eastern DRC, the work on the border posts constituted the starting point for the preparation of the Charter for Small‐Scale Traders.

ECOWAS requested the TFF support for implementation of its joint border posts program in West Africa. The work helped in the preparation of border procedure manuals and in deciding whether to add joint border facilities and how to manage them. Baseline data will help measure the impact of these improvements on border crossing time.

In Southern Africa, TFF supported preparation of an integrated border management strategy for Lesotho and Swaziland. IT connectivity and customs data exchange is now operational. With the help of two international customs experts sponsored by the project, Lesotho developed an action and priority plan based on short‐term recommendations. Trucks Queuing to Enter Lesotho

TFF support increased the number of highly compliant traders in Lesotho by improving the registration process and providing information in a web portal that will enhance accessibility of regulatory requirements for traders. TFF also helped provide highly compliant traders with a simplified trade clearance procedure. Finally, the project supported public‐private dialogue between traders in the region and relevant authorities. Operations at the clearance house at the border of Lesotho and South Africa improved significantly.

Developing Transit Regimes

TFF provided the technical assistance for the implementation of the CEMAC transit regime, adopted by the REC in October 2010. As part of this support, 94 customs and transport technical officers (in the Central African Republic, and Chad) in the workings of the new transit regime, including the IT component on the utilization of ASYCUDA World.

In the case of the Mozambique transit regime, the request for support came from the corridor users, and not from the public sector. Federated by the Maputo Corridor Institution, the corridor users collectively provided their views on how to develop a transit regime that would enhance the competitiveness of the Maputo Corridor. That input was included in the revised customs law subsequently adopted by parliament.

Most transit delays can be attributed to a lack of infrastructure for the speedy exchange of information. A number of TFF‐funded IT activities deal with computerization of procedures so that countries may share information, avoid repetitive processes, and diminish cases of fraud.

Support to the CEMAC Transit System

Technical assistance supports implementation of the new CEMA transit regime, and the reduction of nonphysical barriers along the trade corridor linking Cameroon with the Central African Republic and Chad. The activities under this project complement the existing CEMAC

Transit and Transport Facilitation Project. The ultimate aim is to significantly improve the transit performance, particularly on the Douala‐Bangui and Douala‐Ndjamena corridors, and extend the transit regime to the Republic of Congo. Customs officers from the Central African Republic, Chad, and the Republic of Congo have been trained in Douala on the new transit regime. The trained staff will be assigned to train other customs officers and related agencies’ staff. The regional dialogue has helped establish an enabling environment for implementing the transit regime and other related common projects. Electronic exchange on transit data between Cameroon and Central African Republic customs administrations is a major achievement now being extended to Chad. An approved action plan is being used to design a new support project that may help the recipient countries and region to improve the institutional and human capacity within the major institutions and agencies involved in the facilitation agenda. One of the major expectations is the capacity to generate and disseminate accurate transit indicators and trade statistics to all potential users. A draft partial report on transit indicators has been submitted and is an example of how the global aspect of TFF allows its achievements to be replicated in other settings.

Trade Facilitation and Road Safety

TFF was instrumental in articulating the trade facilitation dimension of road safety. This informed the Africa Decade of Action initiatives on road safety. In particular, TFF work informed objectives to support improvements through harmonization of regional standards, dissemination of knowledge, and capacity‐building activities. Several initiatives will benefit. The road safety initiative in the Trans‐African Network seeks to harmonize regional standards, ensuring consistency among standards and processes and improving road safety for regional traffic. The Africa Road Safety Corridor Initiative in CEMAC aims to improve road safety and reduce the number of deaths and injuries along the Central Africa corridor through three interrelated components: (i) improvement of the regulatory environment and capacity‐building exercises to raise the professionalism of road operators; (ii) design of a road safety training module for the police on the modalities of collecting data on accidents; and (iii) dissemination of communication and awareness material on road safety for commercial freight.

Enhancing Trade in Agricultural Products

Progress toward harmonization and implementation of livestock trade policies in Central and West Africa has been slow and uneven. The harmonization initially covered nine pilot countries. Six are in West Africa: Côte d’Ivoire, Ghana, and Nigeria, which are importers of livestock and meat, and Burkina Faso, Mali, and Niger, which are livestock and meat suppliers. Three of the pilot countries are in Central Africa: Cameroon, the Central African Republic, and Chad, which are suppliers of Nigeria, Sudan, Gabon, the two Congos, and Equatorial Guinea (see Figure 4.4). The objective is to improve intra‐ and interregional trade in West and Central Africa.

Figure 4.4 Central and West African Livestock Trade Flow

The initiative will assist clients in policy and program implementation. Knowledge exchange will (i) contribute to an increase in livestock trade in West and Central Africa, (ii) build regional collaboration capacity, (ii) ensure coordination, and (iii) promote increased inter‐ and intraregional trade.

The initiative has delivered key outputs, including (i) identification of major bottlenecks related to tariff and non‐tariff barriers; (ii) advocacy notes on supply and demand, trade regulations, veterinary governance, livestock organizations, and capacity building; (iii) a charter to operationalize a Livestock Professional Forum; (iv) a statement on joint World Bank, CILSS, CORAF/WECARD, and member state activities on improved trade information flows and road harassments; (v) an acknowledgment of the gender dimension in the livestock trade; and (vi) a recommendation for the immediate implementation of the action plan.

Competitiveness Strategies

TFF has financed strategies by which African countries can improve their export competitiveness to achieve sustained and inclusive economic growth. The program focuses on trade facilitation

constraints that hinder competitiveness in light consumer goods, manufacturing, agribusiness, tourism, information, communication technologies, heavy manufacturing, and mining. The work is part of the Bank Group’s comprehensive approach to trade facilitation that enhances the development of firms and other actors in these industries. Findings of this work are expected to demonstrate the factors constraining growth and exports. Among the publications generated by the program, the flagship report on agribusiness, Growing Africa: Unlocking the Potential of Agribusiness, was featured in Reuters, Bloomberg, Africa Investor, Xinhua News Agency, and Dow Jones among others. The team presented the findings in the Big Ideas Conference hosted by the World Bank Group. The book was also presented in the European‐African Business Development Council and the UN Food and Agriculture Organization (FAO). Following these meetings the task team leader was asked to address the Dutch Chamber of Commerce and investors who are interested in exploring opportunities in Sub‐Saharan Africa. The book has generated much discussion and international interest, and the team has been invited to present and discuss the future of agribusiness in Africa in South Africa, Italy, the Netherlands, the Brookings Institution, Aspen Institute, Harvard Business School, and Sri Lanka, among others. This research has also featured on the cover of African Business in August/September 2013.

Customs Capacity Development

The Customs Capacity Enhancement in Sub Saharan Africa (CCEA‐SSA) project was launched in July 2012 with the signing of a $3 million agreement between the World Bank and the World Customs Organization. The project has met all key development objectives met and disbursed 99.5 percent of project funds. The project leveraged WCO’s extensive network and strong technical competency to enhance the capacity of customs administrations in West, Central, East and Southern Africa to better coordinate and drive their own reform and modernization initiatives. Programs focused on improving customs efficiency, strengthening compliance with international standards, better coordination of international assistance, and development of high‐priority technical skills. A key further point of emphasis was ensuring that customs administrations have the capacity to manage and sustain their improved operations.

The leadership and management development component directly reached over 300 senior customs officials who attended high‐level leadership and management development programs tailored to the needs of customs administrations in the region. The program also helped develop a local cadre of facilitators to support and sustain leadership and management development work. Evaluations of the effort indicate a high degree of relevance and positive impact on the leadership capacity of participants. As part of the component a high profile ‘Women in Customs Leadership Conference’ was held in 2013 followed by a Women in Customs Leadership workshop which used elements of the project‐financed leadership and management development program. Subsequently the project financed the development of a Customs Gender Equality and Diversity Assessment Tool which is now being implemented in several African customs administrations.

The training and e‐learning component of the project has achieved impressive results with over 2,800 pages of high quality technical training materials developed that on conversion to e‐learning format translate into 45 modules and 150 hours of new training materials. The e‐learning modules are now available in English, French and Portuguese and cover areas relevant to the WTO Trade Facilitation Agreement. WCO member expertise was used to develop the material and ensure its quality and relevance. The modules are available via the WCO’s e‐learning platform and have brought up‐to‐date training materials in key customs disciplines to over 14,000 customs officials.

The project also financed the deployment of the WCO’s e‐learning platform in nine Sub‐Saharan countries that previously did not have access to e‐learning materials. To ensure ongoing sustainability, over 100 local officials were trained in how to maintain the e‐learning program. While the development of e‐learning materials incurs some significant up‐front costs, the return on investment is high over the long term as many thousands of officials now have access to training in core customs disciplines that would not be cost effective or feasible to deliver via traditional face to face delivery methodologies.

Joint Uganda – Rwanda – Burundi Training Strategy Development Workshop, Uganda, September 2013

LMD Workshop, Congo, September 2013

Enhancing Free Movements of Professionals

Enormous benefits would accrue at the regional level if the free movement of freight were complemented with uninhibited movement of services (such as through regional mutual recognition and accreditation of professional qualifications in engineering, legal, and accounting professions). Trade facilitation is especially important for small and medium professional service enterprises, on which the impact of inefficient and uncertain government regulation can be greatest because their relatively small scale of operation often lacks the flexibility and the capacity to absorb inefficiencies. Trade in services can contribute to export diversification by reducing Africa’s dependence on a narrow range of agricultural or mineral commodity exports. The World Bank is implementing a professional services platform for Africa that supports this goal.

Professional Services Platform for Africa

The professional services work for Africa involves wide dissemination of information and consultations among stakeholders for common standards and mutual recognition of professional qualifications in the COMESA region. Developing regulatory and legal instruments for mutual recognition agreements of professional qualifications is key in facilitating the movement of professionals and their services in Sub‐Saharan Africa and it has become one of the top agendas among regional groupings. In 2011 COMESA approached the World Bank for guidance on this issue. The Bank Group is implementing a Professional Services Knowledge Platform for Eastern and Southern Africa to create a unique platform for dialogue and exchange of ideas among practitioners, policy makers, and regulators about the critical issues transforming professional services in Sub‐Saharan Africa. The platform will set conditions for developing strategies to facilitate professional movement as well as trade and investment in professional services in Africa.

Over 2,000 users and providers of professional services in Sub‐Saharan Africa were surveyed during the first half of 2012. The findings—based on original survey instruments developed for professional services—were posted on the Knowledge Platform website in September 2012 (see http://worldbank.adaptium.com/knowledge/; logon and password: World Bank).

As part of the professional services platform, a workshop was organized on legal services with the objectives of engaging some champions of trade in legal services and generating ideas that would encourage cross‐border legal services in Africa. TFF helped organize COMESA‐World Bank workshop on legal services attended by champions of the legal profession and representatives of bar associations in Africa. The event generated a draft regulatory instrument now under discussion that would facilitate the movement of legal professionals on the continent.

A partnership to deliver knowledge and technical assistance has organized a variety of activities including training by the Federation of European Accountants on regulating accounting services.

A special session on engineering services in COMESA was co‐organized with the International Federation of Consulting Engineers (FIDIC) at the Annual Conference of the FIDIC Group of Africa Member Associations organized in May 2012 in Zambia. TFF has partnered with the East Africa Business Council and TradeMark East Africa in the development of a professional services platform focused on the private sector.

Southern African Development Community Visa Facilitation Initiative

Economic diversification and regional integration are needed for African nations to alleviate poverty and accelerate growth. Tourism is one of the sectors that have immense potential to generate income and employment opportunities particularly in Southern Africa, where it can generate jobs in various sectors. Tourism is fundamentally labor intensive, generating jobs in various sectors, from hotels to transport and beyond. It contributes to economic diversification and provides opportunity for the poor to sell produce and services directly to tourists. In 2013, the tourism sector of the South African Development Community (SADC) represented 5.8 percent of GDP. Given these results, these countries need to establish the necessary corporative infrastructure to give a boost to the tourism sector.

Visa regulations and procedures are significantly linked to the development of tourism. Southern Africa is lagging in terms of opening up its visa regulations and scores only 29 out of 100 on the widely used “openness to tourism” scale.

SADC member countries signed a tourism protocol in 1998, but there have been challenges to its implementation. The protocol provided for a UNIVISA for the region to allow tourists to travel easily among SADC states. Anecdotal evidence suggests the UNIVISA scheme could generate 3–5 percent growth of the sector.

The SADC Visa Facilitation Initiative focuses on supporting the Regional Tourism Organization of Southern Africa and the Kavango Zambezi (KAZA) Transfrontier Conservation Area in simplifying and streamlining immigration processes both for worker and traveler visas. Steps include modernizing and harmonizing visa requirements and identifying basic infrastructure for the regional tourist visa system. The short‐term goal is for two of the pilot countries, Zambia and Zimbabwe, to have UNIVISA systems and expertise in place. TFF will also support awareness building of trade‐in‐tourism by disseminating trade facilitation related recommendations.

A program for the launch and marketing of the pilot KAZA Visa has been agreed upon by all members. Three types of marketing materials have been developed: a revised version of the UNIVISA passport; stand‐up banners that can be placed at the border posts to inform tourists of the option of purchasing the visa; and fliers that can be distributed to both tourists and the tourists’ trade. Materials with approved designs have been printed by a World Bank‐authorized company in Harare. A special KAZA Visa website was officially launched in November 2014.

Tourists can now cross into Zimbabwe and Zambia as frequently as they like within time span of the visa.

Promoting Gender‐oriented Trade Facilitation Women make substantial contributions to economic wellbeing in most developing countries, but they face a range of constraints that undermine their trade and economic potential. To increase growth opportunities for women, TFF has made promoting gender‐oriented trade facilitation a key aspect of its programming, supporting several activities that have focused on enhancing conditions for women to engage in trade in a fair and equitable way, free of harassment or discrimination. Examples include a TFF‐funded field survey in Cameroon aimed at gaining a greater understanding of the country’s small‐scale traders—approximately two‐thirds of whom are women—and a study in Cameroon and Nigeria that examines key barriers faced by women traders and possible interventions that government could use to protect them. A project on international trade procedure simplification and infrastructure seeks to improve conditions through infrastructure and institutional development. This will build capacity and increase the livelihood of small‐scale traders in eastern Democratic Republic of the Congo, most of whom are women. Similar TFF efforts are under way in West Africa in Burkina Faso and Mali.

Expanding Economic Opportunities for Women in Burkina Faso and Mali

Burkina Faso and Mali have a potential comparative advantages in the production of fresh mangoes. However, only a small portion of this output is being exported internationally due to the lack of marketing outlets and the indigenous processing techniques being used. Mango drying techniques used in this region no longer adhere to the standards of the European Union, the main export market for West African dried mango. This is a critical issue for women in the regional economy because about half of the mango drying businesses are women owned. TFF is helping these two countries modernize their mango drying techniques, as has been done in South Africa, now the market leader for supplying the EU market. The effort entails sensitization campaigns in rural areas to convince artisanal dryers in Burkina Faso and Mali to switch to the new techniques. Although most mango orchards are owned by men, about 90 percent of labor in mango drying factories is done by women, with about half of those businesses owned by women. Research has shown that owners tend to regard women are more productive in mango processing—they do the sorting, cutting, peeling, packing of racks, grading, finishing, and packing—and require less training. Most of the mango factories are in rural areas where men are predominantly engaged with agricultural activities. And many entrepreneurs say they make a conscious choice to employ women because they sense that the wages earned by women are better spent on items such as nutrition, housing, clothing, and school fees for children. With the joint venture signed between a South African producer and producers in Mali and Burkina Faso, this project has the potential to develop and showcase the benefits of female entrepreneurship. Out of the six mango drying businesses that are key partners in the project, four are owned and managed by women. It is also

important to note that the female entrepreneurs were chosen not as a result of a conscious gender strategy—one way of pursuing gender‐sensitive support is through activities that are already dominated by women.

5. TFF Significant Milestones and Lessons Learned

Perhaps the single most important contribution of the experience gained over the past five years of Trade Facilitation Facility operations has been the elevation of trade facilitation as a priority in the global community and a major endeavor for developing countries. Strengthening trade linkages within regions, providing landlocked countries with access to seaports, reduction of transit costs, streamlining of regulations, improving trade transparency and product quality—these are among the critical issues addressed by TFF to help bring lower‐income countries into the world of international trade. Increased developing country participation in international trade is increasingly understood as a vital element in the World Bank Group endeavor to eliminate extreme poverty and boost shared prosperity, the Bank’s Twin Goals.

Within the Bank Group, the most significant milestones and lessons learned attained by TFF over the first phase of the program fall into in five main areas: (i) mainstreaming the trade facilitation agenda in World Bank operations, (ii) fostering catalytic forces that enable critical reform initiatives, (iii) leveraging additional resources either within the World Bank or the wider development community, (iv) building consensus by providing resources and leadership for stakeholder agreement, and (v) playing a synergistic role by filling critical analytical and technical gaps in project preparation and execution.

Mainstreaming Trade Facilitation in the Development Agenda

TFF has played a seminal role in mainstreaming the trade facilitation agenda in World Bank operations as well as national and regional development strategies. Mainstreaming is essential because trade facilitation is a major component of transaction costs that hinder the effective participation of low‐income countries in international trade.

The key first step toward the goal of mainstreaming the trade facilitation agenda was the identification of needs undertaken through Trade and Transport Facilitation Assessments and Diagnostic Trade Integration Studies and through the WTO needs assessments exercise that provided the framework for beneficiary countries to prepare for the implementation of the Bali Agreement. The West African Economic and Monetary Union made a significant contribution with an assessment showing that implementation of multilateral commitments could reinforce regional integration.

Mainstreaming was also fostered through projects in agriculture and livestock, with particular attention paid to transport and logistics challenges facing the private sector operators. These activities illustrated how well‐defined policy and trade logistics reforms can have real impact. Traditional agricultural programs focus on improving production and yields but dedicate little if any effort to improving the conditions in which agricultural products reach their markets, for example, through improvements in rural roads. Several TFF interventions focused on overcoming the logistics challenges between farms and markets and on ensuring that products are tailored

to their target markets. These activities raised awareness about the need to consider transport and logistics services adapted to rural conditions, and to set norms and standards that would ensure products can reach world markets, and so forth.

TFF was a catalyst for innovative trade facilitation programs in the World Bank that address both technical and political economy drivers of high transaction costs. This work fosters competitiveness. The West Africa Regional Competitiveness DPO for Côte d’Ivoire and Burkina Faso illustrates how TFF interventions contribute to strengthening the policy dimension in project preparation and country and region dialogue. The logistics costs study for West and Central Africa corridors analyzed how transport costs affected the price of goods imported by traders on two levels: the financial cost of the logistics services from gateway to final clearance, and the economic cost of delays and uncertainties on the delivery date. The study disaggregated cost factors along the corridor at gateway, inland transport, inland border, and final clearance levels. It further analyzed road transport between voyage‐to‐vehicle operating costs and nonvehicle‐related fixed costs. This has made it possible to test different operational scenarios for trucking operators. The result is they can make better decisions about vehicle acquisition and operation strategies in light of market transport rates and financing costs for trucks. That work was instrumental in guiding dialogue with West African stakeholders to identify key policy triggers that would enable a reform of the transport and logistics environment, particularly trucking services. The result was a matrix of policy reforms that constitute the triggers for the World Bank program.

TFF has helped focus attention on multimodal transport, particularly rail. This has been instrumental in stimulating trade and development in lagging regions. In East Africa, the institutional assessment of the Tanzania Railways funded by TFF informed the preparation and implementation of institutional‐strengthening and capacity‐building activities in the railway sector under the Tanzania Intermodal and Rail Development Project. It has also delivered guidance to the country by supporting a dialogue on institutional reforms with all railway organizations and stakeholders in Tanzania. This study established a benchmark in the way the World Bank looks at rail projects in Africa, particularly in terms of the need to focus on operational management, railway regulation, and infrastructure management as integrated activities. The work in Tanzania has been useful in the design of other support (in Guinea, in Senegal, Mali, and Cameroon) where similar needs have surfaced.

Catalyzing Broader Reforms

In several cases, TFF support has enabled the mobilization of a wide cross‐section of stakeholders to support reform initiatives with a profound impact. One example was the revision of the transit regulations in the Mozambique Customs Law. The Maputo Corridor is a historical trade route that provided the preferred access to the sea from the South African hinterland. It later fell into disuse during the Mozambique civil wars before and after independence. With the peace agreement in 1992 and the end of the apartheid in South Africa, the corridor gradually regained prominence

but still suffered disadvantages compared to direct routing through South African ports, since passing through Mozambique involved a customs transit regime. The constraints of transiting an international border, compounded with comparatively low volumes and the imbalance in trade, constituted an obstacle for the development of traffic along the corridor.

In response, corridor users established the Maputo Corridor Logistics Initiative (MCLI), a management institution that documented the main constraints to competitiveness along the corridor. MCLI requested support TFF support as a component of the Corridor Facilitation Program for consolidating the collective input of all stakeholders to modify laws hampering corridor efficiency. The support of TFF enabled the MCLI to organize a large consultation with stakeholders to collect their views on what needed to be changed in the transit regime to enhance the competitiveness of the Maputo Corridor and to recruit the logistics and legal expertise required to convert the proposals of the corridor users into draft legislation. The scale of the consultation and the involvement of the Mozambique customs administration from the start of the activity gave weight to the effort to turn the proposal into law.

Taking advantage of a review of the Mozambique Customs Law passed to facilitate the implementation of the single electronic window system in Mozambique, the key recommendations from the stakeholders covered five universal components of a transit regime: (i) customs transit regulations (CTR’s), (ii) bonds, (iii) manifests, (iv) transit process authorization, and (v) stakeholder engagement. The recommendations were well received by the Government of Mozambique and incorporated into the revised legislation, which was ultimately approved by the Parliament and published in October 2012. As the legislation is applicable to the entire country, it will have a positive impact on competitiveness of the Maputo Corridor as well as positive spillover effects on other transit corridors of Mozambique, especially through the ports of Nacala and Beira.

In Eastern Africa TFF support facilitated engagement with the trucking industry in the trade facilitation dialogue on the corridor. Overloaded trucks had long plagued the corridor. With the adoption of a regional East African Community regulation and the private management and automation of the weighbridges facilities, the situation began to improve. That evolution opened a window of opportunity for compliant operators, as they could finally make a difference in operations through faster turnaround time for their trucks, whereas under the previous organization, the incentives for compliance were negligible. The trucking industry organization therefore resolved to promote compliance actively among its members. When the Northern Corridor secretariat organized regional workshops to discuss how this could be achieved, it received a massive and positive response from all public and private agencies and institutions involved in the movement of freight. They expressed a strong desire to be part of the initiative. It was originally envisaged that the charter would be signed by Kenyan trucking companies (as trucking services providers) and shippers and clearing and forwarding agents (as freight providers). But ultimately the charter was signed by 14 public and private institutions and

agencies, and the signing ceremony was attended by delegations from the whole East Africa region, particularly Uganda, which is keen to see the charter extended to its territory.

Leveraging Bigger Investments

TFF supported the preparation of feasibility studies and pilots that led to further trade facilitation programs. Several grants developed pilots that became models for larger scale projects elsewhere. TFF engaged in interventions that were later scaled up. A few grants directly contributed to the creation of large‐scale programs. The Great Lakes Trade Facilitation Program and the East Africa Regional Infrastructure Program illustrate the ways in which TFF interventions enabled resources to be leveraged for large‐scale programs with a trade facilitation focus.

The Great Lakes Trade Facilitation Program, a $140 million investment, will facilitate cross‐border trade by reducing costs, time, and harassment, especially of women, in order to improve the operating environment at the border for traders in the Great Lakes Region. This investment is improving core trade infrastructure and facilities at selected land border crossing points and at an airport in Rwanda that is of strategic importance to the region. It will also make possible the development of activities to facilitate cross‐border market exchanges. Program development took into consideration the fact that improvements in infrastructure need to be accompanied by policy and procedural reforms and capacity building. The conception of the program is based on a series of TFF interventions in Eastern DRC that aimed at improving the border crossing conditions for small‐scale traders, mainly women, subject to harassment by border officials. That initial intervention evolved into the preparation of a charter for small‐scale traders that promoted ethical behavior and spelled out rights and duties for small‐scale traders and border officials. It was piloted in Zambia and Malawi and scaled up in the Great Lakes Region. The program incorporates lessons learned through the customs integrity programs funded by TFF in Cameroon and Togo.

TFF supported the preparation of a regional intermodal transport strategy that informed the third retreat of the heads of state of the EAC on regional infrastructure, held in Nairobi in November 2014. The follow‐up of this strategy is a proposed investment program for intermodal transport infrastructure for Lakes Victoria and Tanganyika, for rehabilitation of specific rail and road links, and for the Indian Ocean sea ports of Mombasa and Dar es Salaam. The $1.2 billion initiative includes funding to consider policy reform for the transport sector related to axle load control, road safety on the regional transport corridor, transit rights, recognition of driver licenses, and restrictions on entry of foreign‐owned trucking firms. In the inland waterway sector, given major investment in Lake Transport infrastructure, it also includes the Inland Waterways Protocol and the Lake Victoria Transport Act by the riparian countries as part of the policy dimension complementary to the physical investment.

Thanks to its straightforward application mechanism, its rapid response timeline, and the flexibility of its modes of intervention, TFF proved a practical instrument for managers in the

World Bank to remedy problems arising from project implementation. Prominent examples include the Abidjan Lagos Trade and Transport Facilitation Program (TTFP), the CEMAC TTFP, and the portfolio in Europe and Central Asia.

One main lesson and recommendation concerns the importance of adopting a programmatic approach because of the increasingly sophisticated demand for logistics and transport corridor analyses needed to reap benefits from increased international and domestic trade. This would address issues related to transport corridor performance and regional integration as well as differentiated demands of medium‐ and low‐income countries. The work would be done by leveraging initial logistic and trade facilitation analytics and undertaking complementary work of several World Bank Group Global Practices to properly respond to refined product demand. The completed TFF phase has enabled the team to foresee elements of a future work program: (i) Moldova implementation of the Logistics and Transport Strategy; (ii) Kazakhstan Logistics Performance—second phase project with KTZ business plan—and in‐depth analysis of routes; and (iii) Central Asia Regional Strategy— railway strategy, logistics, trade facilitation, for example.

Building Consensus

It is difficult to measure in practical terms the impact of greater consensus among countries and regional institutions, or among development partners. However, a number of TFF interventions contributed to the emergence of a consensus on several trade facilitation topics as a by‐product of a single activity or a series of activities under the same thematic domain.

An illustration of this type of outcome is the convergence among the West African Economic and Monetary Union (UEMOA) countries on the West Africa EPA/WTO Trade Facilitation Agreement. The starting point for the formulation of the UEMOA Regional Facilitation Program was a regional needs assessment as a contribution to the WTO negotiation for the UEMOA countries. That helped align the positions of the member countries and produced a regional position, while the Regional Facilitation Program provided the confidence that the most pressing issues would be addressed. This support to the customs union provided a framework for exploring support to West Africa for the implementation of the Bali TFA.

A second illustration is the one‐stop border post agenda that attracted significant investment in the past without much improvement, primarily because of inadequate attention to the soft agenda in the infrastructure programs. The various TFF interventions aimed at improving border crossing1 conditions helped rebalance the focus between physical facilities and integrated border management. It provided the evidence that reforms are more effective than facilities in reducing border crossing time and promoted dialogue among border management agencies and logistics operators. In addition to the World Bank, other development partners actively supporting country and REC programs for customs unions, notably the Japan International Cooperation Agency, are now echoing a similar message.

Conclusion

TFF was launched in April 2009 as a multi‐donor trust fund to help developing countries improve their competitiveness by modernizing their trade facilitation systems and reducing trade costs. Since then it has responded rapidly to requests from governments and regional economic communities for assistance in improving infrastructure, institutions, services, policies, procedures, and market‐oriented regulatory systems that enable firms to conduct international trade at a competitive pace and cost. Experts from across the World Bank Group have worked together to scale up the institution’s trade facilitation‐related activities to support trade for development. TFF has also played an important role in helping developing countries implement trade facilitation provisions of international trade agreements, including the WTO Trade Facilitation Agreement and the ongoing effort to establish a Continental Free Trade Area in Africa.

The projects funded by the Trade Facilitation Facility have created both a body of work and a body of knowledge that the World Bank Group, international partners, client and donor countries, and the private sector can build upon as trade takes on a heightened profile in the campaign against global poverty. The TFF experience has shown how regional and corridor approaches can leverage positive impact and that scaling up from country level projects to regional and even continental projects can be done, even at modest funding levels.

A signal achievement of TFF has been its ability to respond flexibly to client country needs and priorities while at the same time scaling up trade facilitation interventions to the regional level. This, combined with TFF’s ability to develop projects quickly and to complement, rather than duplicate, other World Bank Group trade programs, show great promise for the Bank Group’s trade facilitation efforts going forward.

Annex: TFF Activities by Region

TFF Activities in Eastern Africa

Fund name Primary beneficiaries

Secondary beneficiaries

Amount (US dollars)

Total 4,181,766.02

Time Release Studies in Support of COMESA:* Supervision Costs COMESA Africa 35,719.92

Time Release Studies in Support of COMESA COMESA Africa 0

EAC* Trade Finance support EAC* Africa 225,455.17

Developing and Building Trade Logistics Distribution and Services in Rwanda Rwanda Africa 488,989.15

COMESA CTN* and CMR* Africa 1,692,000.00

Institutional Assessment of Tanzania’s Railway System Tanzania Africa 700,000.00

TFF Assessment of Customs Along Djibouti‐Ethiopia Corridor Djibouti Africa 28,601.78

Regional Transport Intermodal Study in the EAC Countries EAC Africa 811,000.00

Pilot Project for the Promotion of Small‐scale Cross‐Border Traders Charter Africa Africa 200,000.00

* COMESA = Common Market for Eastern and Southern Africa; CMR = Common Market Regulation; EAC = East African Community; CTN = Common Tariff Nomenclature. This table does not comprise activities at the continental level such as the support to the REC corridor program or the customs capacity‐building program implemented through the World Customs Organization. The time release studies project in support of COMESA was dropped.

TFF Activities in Southern Africa


Secondary beneficiaries

Grant amount (US dollars)

Total 5,233,441.05

Customs Collaboration between the Lesotho Revenue Authority and the South African Revenue Authority, Phase 1

Lesotho South Africa 200,000.00

Lesotho‐RSA* Customs Collaboration Lesotho South Africa 1,500,000.00

Swaziland Customs Modernization Swaziland South Africa, Mozambique

153,000.00

Trade and Transport Facilitation Assessment in Zimbabwe

Zimbabwe Zambia, Northern Corridor countries

360,000.00

Regional Trade and Transport Facilitation Assessment for SACU* Region

SACU Botswana, Lesotho, Mozambique, Namibia, South Africa

330,000.00

Swaziland TFF: Time Release and Project Design

Swaziland Northern Corridor countries

215,479.78

Swaziland TFF Customs Modernization, Phase 2

Swaziland South Africa and other Northern Corridor countries

586,000.00

Southern African Development Community Visa Facilitation Initiative, Pilot Implementation

Zambia and Zimbabwe

SADC* countries 1,099,850.00

Trade Facilitation and Growth Pole Development in Mozambique

Mozambique Southern African Region

789,111.27

* RSA = Republic of South Africa; SACU = Southern African Customs Union; SADC = South African Development Community.

TFF Activities in Central Africa

Fund name Primary beneficiaries Secondary beneficiaries


Total 7,793,405.39

Roundtable on Trade Facilitation and Payment Services

Cameroon, CAR,* Chad, Republic of Congo, Equatorial Guinea, and Gabon

African region 137,794.29

DRC* International Trade Procedures Simplification: Supervision of Grant Funding Request (GFR) 7002 and GFR 7045

DRC CEMAC* and EAC* countries

158,691.34

DRC International Trade Procedures Simplification: Component 2

DRC CEMAC and EAC* countries

70,350.92

DRC International Trade Procedures Simplification: Components 1 and 3

DRC CEMAC and EAC countries

705,064.44

TA* to Support the implementation of the CEMAC Transit System

Cameroon, CAR, Chad, Republic of Congo, Equatorial Guinea, and Gabon

ECOWAS* and DRC

1,580,000.00

TA to Support the Action Plan of the Guichet Unique du Commerce Extérieur (GUCE, External Trade Single Window)

Cameroon, CAR, and Chad Gabon, Congo, Equatorial Guinea

1,070,000.00

Regional Trade with Nigeria Cameroon, Nigeria ECOWAS‐CEMAC collaboration

159,650.87

Assistance for Project Identification in Trade Facilitation

CEMAC countries 1,170,000.00

Sustainable Development of the Congo Basin Growth Corridors: Second Workshop of the Regional Working Group

CAR, Republic of Congo, DRC,

Angola, Cameroon, and Chad

44,260.79

Republic of Congo: TFF Project Preparation

DRC Cameroon, CAR, Chad, Republic of Congo, Equatorial Guinea, and Gabon

14,882.15

Payment Systems in CEMAC Cameroon, CAR, Chad, Congo, Equatorial Guinea, and Gabon

260,867.73

TA to Support Cameroon Customs to Implement an Integrity Action Plan

Cameroon CAR and Chad 314,329.92

DRC Trade Facilitation Audit and Corridor Diagnostic

DRC Burundi, Republic of Congo, and Rwanda,

247,088.68

Brazzaville‐Kinshasa, Addressing the Bottleneck

Republic of Congo 400,550.00

TFF to Support the Implementation of the Total and World Bank Africa Road Safety Corridor Initiative

Cameroon, CAR, and Chad CEMAC countries

900,500.00

Piloting Enhanced Payment Systems for Customs Collections in GUCE in Cameroon


Operationalization CICOS River Transport Observatory

Cameroon, CAR, Chad, Republic of Congo, Equatorial Guinea, and Gabon

64,999.47

Improving Customs Management Regulations and Payment Systems in CEMAC

Cameroon, CAR, Chad, Congo, Equatorial Guinea, and Gabon

148,159.67

TA to Support Implementation of a Risk Analysis System in Cameroon Customs


* CEMAC = Commission de la Communauté Economique et Monétaire; ECOWAS = Economic Community of West African States; EAC = East African Community; DRC = Democratic Republic of Congo; CAR = Central African Republic; TA = technical assistance.

TFF Activities in West Africa

Fund name Primary beneficiaries Secondary beneficiaries


Total 9,402,793.58

Improving the Quality of Dried Mango Products in Mali and Burkina Faso

Mali and Burkina Faso Other mango‐producing

865,000.00

ALTTFP* Togo: Support to Increased Efficiency of Customs Administration

Togo Abidjan‐Lagos corridor

300,000.00

ALTTFP Design of a Pilot for Implementing an Authorized Economic Operator (AEO) Mechanism for West Africa

Benin, Côte d’Ivoire, Ghana, and Nigeria

Abidjan‐Lagos corridor

281,373.60

Financial Market Integration and Trade Facilitation in ECOWAS*

Benin, Burkina Faso, Liberia, Mali, Niger, Cabo Verde, Côte D’Ivoire, Nigeria, Ghana, Senegal, Sierra Leone. Togo, Guinea, and Guinea Bissau

African region 690,286.89

Nigeria Trade Facilitation Intervention

Nigeria 525,866.12

UEMOA* Customs Union Instruments on trade facilitation

Benin, Burkina Faso, Côte D’Ivoire, Guinea Bissau, Mali, Niger, Senegal, and Togo

Other ECOWAS countries

2,643,000.00

AEO Implementation Pilot Program for Ghana and Côte d’Ivoire

Ghana and Côte D’Ivoire Abidjan‐Lagos Corridor, Burkina Faso, Mali, and Niger

973,000.00

Promoting Regional Trade in Meat and Livestock‐related Products in ECOWAS

Benin, Burkina Faso, Cameroon, CAR,* Chad, Mali, Niger, Côte D’Ivoire, Nigeria, Ghana, Senegal, and Togo,

Other CEMAC* and ECOWAS countries

1,084,500.00

ECOWAS One‐Stop Border Posts

Benin, Niger, Nigeria, and Togo

Other ECOWAS countries

900,000.00

Trade Facilitation Trust Fund Liberia 44,484.48

West Africa Region Trade Project

ECOWAS 45,282.49

Trade Facilitation in Nigerian Agricultural Markets

Nigeria 1,050,000.00

* ALTTFP = Abidjan Lagos Trade and Transport Facilitation Project; CEMAC = Commission de la Communauté Economique et Monétaire; CAR = Central African Republic; ECOWAS = Economic Community of West African States; UEMOA = West African Economic and Monetary Union.

TFF Activities in East Asia


Secondary beneficiaries Grant amount (US dollars)

Total 2,016,953.56

Laos National Single Window Preparation Program

Lao PDR Brunei Darussalam, Cambodia, Indonesia, Malaysia, Myanmar, Philippines, Singapore, Thailand, Vietnam, and China

1,349,999.36

Vietnam Trade Facilitation Assessment and Strategic Planning

Vietnam 666,954.20

TFF Activities in Latin America and the Caribbean

Fund name Primary beneficiary

Secondary beneficiary


Total 2,329,517.37

Trade Facilitation in Haiti: Diagnostic and Policies

Haiti 1,200,000.00

Trade Facilitation for Regional Integration in Central America

Central America 45,772.56

Trade Facilitation for Regional Integration in Central America

Central America 1,083,744.81

TFF Activities in Europe and Central Asia

Fund name Primary beneficiary

Secondary beneficiary


Total 2,642,000.69

Moldova: Trade Facilitation through improved Transport and Logistics

Moldova Eastern Europe 1,299,050.69

Central Asia Trade Link Kyrgyz Republic Central Asia 942,660.00

A Strategic Logistics Role for KTZ in Attracting Asia‐Europe Transit Freight Flows

Kazakhstan Europe, China, Central Asia, and South Asia

400,290.00

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