Joint UNECA-WBCG Workshop on Trade Facilitation
Promotion of Intra-African Trade Walvis Bay,
Namibia, 24-26 February 2009
I. Background
In recognition of the structural weakness of their economies, African countries, shortly after political independence, turned to regional economic integration not only as a means of overcoming the disadvantages associated with small country size but also as a means of accelerating the process of continental growth and development.
To this end, the Treaty establishing the African Economic Community (AEC) was adopted in 1991. The AEC goal was subsequently emphasized by the adoption of the Constitutive Act of the African Union (AU) in 2001. The vision makes sense for Africa’s 53 mostly small economies. Uniting them would permit the economies of scale that make countries competitive. It would provide access to a wider trading and investment environment, inducing backward and forward supply links. It would promote exports to regional markets, building experience to enter global markets. And it would provide a framework for African countries to cooperate in developing common services for finance, transport, and communications. Africa’s leaders also decided that the many regional economic communities, known as RECs, would be the building blocks for integration.
One of the principal pillars around which virtually all the integration schemes is anchored is the objective of fostering intra-African trade and unifying each regional market place by a progressive removal of artificial barriers to trade within the continent. Many of the post-independence groupings were therefore essentially anchored on a market-driven integration philosophy of reducing barriers fragmenting the markets and impeding the free flow of goods, services, investments, and in that context instituting and implementing a number of trade facilitation measures.
In deed, in recent years, the volume of goods that move across borders has increased exponentially due to changes in the international trading environment stemming from the global integration of modern production systems, new forms of electronic commerce as well as from the development of containerized transport that has allowed large cost reductions in cargo handling and increased cargo transshipment.
However, developing countries in general and African countries in particular have not yet benefited from the steady increase in international trade. African countries have not been able to develop trade to the point where they can reap the tremendous potential benefits. The situation is even worse when it comes to intra-African trade. Intra-African trade has been disappointing. On average over the past decades, about 10-12% of African trade is with other African nations. Compared to other regions, Africa’s record is also disappointing. 40% of North American trade is with other North American countries, and 63% of trade by countries in Western Europe is with other Western European nations. Low intra-African trade implies that many opportunities are lost for using trade within the continent to enhance the prospects for specialization between African countries and accelerated development and integration. The potential has been overlooked for Africans to trade with their neighbors notwithstanding their geographical proximity. This weak performance of African countries is partly due to high transaction costs, which significantly contribute to the cost of tradable goods and consequently determine the degree of integration of countries within Africa on one hand, and into the world economy on the other.
The overall dramatic increase in volume and complexity of world trade both in terms of type of goods being traded and the terms and conditions related to import and export transactions make it essential for countries to provide simple, predictable and efficient customs procedures for the clearance of goods and movement of people while simultaneously tackling increasingly complicated national and international requirements to ensure compliance with national laws, international agreements and meeting security challenges. These considerations and the need to reduce transaction costs have pushed trade facilitation into the forefront of public policy discourse.
In a broad sense, trade facilitation efforts simply address the logistics of moving goods through ports or more efficiently moving documentation associated with cross-border trade. Trade facilitation is also about the environment in which trade transactions take place, including the transparency and professionalism of customs and regulatory environments, as well as harmonization of standards and conformity to international or regional regulations. The core issues of trade facilitation therefore involve, inter-alia; Physical movement of consignment (transport and transit); import and export procedures, including customs and border-crossing problems; information and communication technology; payments, insurance and other financial requirements which affect cross-border movement of goods in international trade; and international trade standards.
The relevance of trade facilitation stems from the fact that it results in direct benefits to both Governments and the business community. Government benefits include: increased effectiveness of control methods; more effective and efficient deployment of resources; correct revenue yields; improved trader compliance; accelerated economic development; and encouragement of foreign investments. Benefits to traders include: reduced costs and delays; faster customs clearance and release through predictable official intervention; simple commercial framework for doing both domestic and international trade; and enhanced competition.
Although African countries have acknowledged the importance of trade facilitation and the gains that could arise from it as reflected by the numerous agreements signed at bilateral, sub-regional and regional levels as well as efforts made at country level, most of these trade facilitation initiatives so far have yielded very limited positive outcomes. This is mainly attributed to several factors such as non-compliance to the agreements, poor program implementation, lack of coordination among and between countries, lack of coordination among relevant agencies within countries, and inadequate skilled manpower. Consequently trade in Africa is characterized by high transaction costs, accounted for by high transport and communication costs; high charges and delays at numerous roadblocks; long customs and administrative delays at ports and border posts; and inefficient international payment and insurance mechanisms.
Transport services tend to be inefficient as manifested by high vehicle prices, poor market information, presence of transport cartels, poor knowledge of operating costs, poor operating practices, and poor routine maintenance, all of which lead to high vehicle operating costs and low vehicle utilization in Africa. These problems result in high transport fares. The phenomenon of roadblocks, which result in excessive delays and substantial increase in transport costs, continues to pose a serious challenge to trade facilitation in Africa.
Excessive documentary requirements, outdated procedures, lack of automation as well as cooperation with other government agencies characterize many customs administrations. This results in the waste of enormous amount of time and money. Delays at the customs as long as 30 days and over are common in many parts of Africa. Telecommunications services are inadequate, inefficient with frequent interruptions and very expensive in Africa compared to the rest of the world.
Tackling the challenges of trade facilitation has been the subject of several initiatives, including efforts deployed in the context of programs of African Regional Economic Communities, of various transport corridors in Africa such as the Walvis Bay Corridor Group, as well as at the global level, through the Almaty Program of Action. Indeed, regional approaches and strategic partnerships to address problems of trade facilitation are increasingly being recognized since international trade involves the use of infrastructure and services of at least two countries. This is especially true for landlocked countries with key transit facilities lying outside their territorial boundries. A regional approach can be an efficient means of coordinating actions, setting priorities, reviewing progress, mobilizing resources, allocating funds, and monitoring contribution levels, with regard to solving common problems.
In contribution to these efforts by way of sharing of experiences and best practices, the United Nations Economic Commission for Africa (ECA), in collaboration with the Walvis Bay Corridor Group, and with the support of the ECA African Trade Policy Center, will organize a regional workshop on trade facilitation for the Eastern and Southern African subregion. The workshop is one of two regional workshops (the other for West Africa) planned by ECA in the context of its activities to promote regional integration in Africa.
II. Objectives
The objectives of the workshop are as follows:
1. Share experiences through presentations and a study tour of the Walvis Bay port in the implementation of trade facilitation and corridor management programs across
2. Assess progress in the design and implementation of trade facilitation programmes and projects within the Eastern and Southern African subregion
III. Expected Outputs
1. Update of progress in trade facilitation and corridor management programmes and activities within the Eastern and Southern Africa subregion.
2. Concrete recommendations for policy makers and various stakeholders towards removing obstacles to trade facilitation, corridor management, and intra-African trade
3. Benchmarks and indicators for monitoring progress on trade facilitation
4. Sharing of best practices across Africa
IV. Format of Workshop
The first two days of the workshop will be devoted to discussions and sharing of experiences on trade facilitation and corridor management issues across Eastern and Southern African subregion. In that regard, various relevant institutions including the Regional Economic Communities (RECs) and private sector entities will make presentations. The third day will consist of a study tour of the Walvis Bay. Details are as contained in the program.
IV. Participation and Cost of participation
Participants will be drawn from RECs within the subregion-COMESA, SADC, SACU, EAC, etc. customs authorities, port authorities, chambers of commerce, transit agents, transport operators, international organizations, donor community and the private sector.
V. Language
The workshop will be conducted in English.
VI. Date &Venue
The workshop will be held from 24 to 26 February 2009 at Walvis Bay, Namibia.
VII. Follow-up and Contacts From United Nations Economic Commission for Africa (UNECA), P.O. Box 3001, Addis Ababa, Ethiopia
Mr. Joseph Atta-Mensah, Chief, Regional Integration Section, NEPAD and Regional Integration Division (NRID), tel: (251-11) 5445379, fax: (251-11) 5153005, email: jattamensah@uneca.org
Mr. Daniel Tanoe, Economic Affairs Officer, NRID; tel: (251-11) 5443542, fax: (251-11) 5153005, email: dtanoe@uneca.org
From Walvis Bay Corridor Group, Windhoek, Namibia, P.O.Box 25220, Windhoek, Namibia
Mr. Gilbert Boois, Manager: Projects & Funding, Walvis Bay Corridor Group, 333 Indpendence Avenue, Namlex Chambers, 2nd Floor, Tel: + 264 61 251 669, Fax: +264 61 251 683, Cell: +264 81 122 7310 Email: projects@wbcg.com.na
Agnetha Mouton, Business Development Officer, Walvis Bay Corridor Group, 333 Indpendence Avenue, Namlex Chambers, 2nd Floor, Tel: + 264 61 251 669, Fax: +264 61 251 683, Email: agnetha@wbcg.com.na
