1. African Development BankTransformation Ready programmeRegional trade and integration component Presentation of work to date Johannesburg review meeting 30 June 2011
2. Research programme Final report Landscape analysis Assessment of regional integration Trade flows and customs Thematic reviews Trade and transport logistics Trade & business information Senegal Case studies Botswana Kenya
3. Progress to date African Development Bank – Transformation Ready programme – Regional trade & integration Initial presentation of Chapter 2 – Landscape analysis – 16 May 2011
4. Next steps African Development Bank – Transformation Ready programme – Regional trade & integration Initial presentation of Chapter 2 – Landscape analysis – 16 May 2011
5. African trade in context Africa’s share of world trade is very low: 2.85% in 2006, 3.41% in 2008 Over 80% of African trade is with regions outside Africa Europe and North America are predominant export markets for many countries Recent increase in trade with Asia, including tenfold growth in trade with China over decade Primary commodities are main exports. 60% of exports to RoW are oil 75% of imports from RoW are manufactured goods – hindering development of regional manufacturing Three of 56 countries accounted for almost half of African exports to RoW in 2004-6 (Algeria, South Africa, Nigeria) Economic downturn reduced the volume and value of African trade African Development Bank – Transformation Ready programme – Regional trade & integration Initial presentation of Chapter 2 – Landscape analysis – 16 May 2011
6. Intra-regional trade Within Africa there are significant national and regional variations in intra-regional trade: Southern Africa performance is strongest because of dominance of South Africa. Central Africa (ECCAS region) has particularly weak intra-regional trade. Exports Imports
7. Intra-regional trade: obstacles Predominantly small, low-income markets offering few economies of scale and limited demand Lack of complementarity: neighbouring countries tend to export similar primary commodities to extra-African markets, and have few manufactured good to trade regionally Difficulty of addressing informal trade within formal trading structures High trade costs, resulting from poor quality of transport and other infrastructure across historic borders, cf. stronger intercontinental links dating from colonial era High trade costs, resulting from bureaucratic and administrative inefficiencies, including failure to implement policies and processes, poor systems management and corruption Lack of coordination and harmonisation between within regions concerning trading mechanisms, standards, payment systems etc, in some cases exacerbated by inter-state conflict and border-region civil conflict Confusion between requirements of different RECs in instances of dual/multiple REC membership African Development Bank – Transformation Ready programme – Regional trade & integration Initial presentation of Chapter 2 – Landscape analysis – 16 May 2011
8. Regional integration – REC membership African Development Bank – Transformation Ready programme – Regional trade & integration Initial presentation of Chapter 2 – Landscape analysis – 16 May 2011
10. Regional integration in Africa – progress to date Establishment of FTA and CU in four regions and one sub-region COMESA, EAC, SADC, CEMAC, ECOWAS Establishment of Tripartite Agreement including COMESA, EAC and SADC – leading to FTA of 26 countries African Union Minimum Integration Programme favours further rationalisation Very limited progress in the other RECs ECCAS overall, AMU, CEN-SAD, IGAD Limited demonstrable impact on trade performance
11. There also International Players in trade and Regional Integration Legal and Policy Framework World Trade Organisation GATT Articles V, VII, and X Doha Round TF dossier World Customs Organisation Kyoto Convention, SAFE Framework of Standards Regional Institutions AU, EU, COMESA, ECOWAS, SADC/SACU NAFTA, Mercosur, ASEAN, etc. International UNECA, UNCEFACT, UNCTAD, WB UNECE,WTO, AfDB, ADB, IADB Trade & RI Operational Components EfficientMIS Regulatory Transparency Integrated Border Management (IBM) Simplified Procedures Single Window Application of International Standards Risk-Based Controls Harmonisation
12. ICTs and trade – analytical framework African Development Bank – Transformation Ready programme – Regional trade & integration Initial presentation of Chapter 2 – Landscape analysis – 16 May 2011 Underlying economic and political challenges: Undiversified and non-complementary economies Landlocked status Political instability and conflict Lack of domestic demand and limited skills Weak financial infrastructure Trade barriers Non-tariff barriers Tariffs Transport costs Transaction costs
13. Trade facilitation comprehensive streamlining of processes, formalities, procedures and documents … supported by an improved legal and regulatory framework, the optimal arrangement of IT solutions, and the implementation of an improved human resources management policy Key issues: elimination of unnecessary processes and duplication elimination of scope for corruption and illegality coordination of agencies within government and across borders targeting of inspections legal framework for trade reduction of delays in consignment transit African Development Bank – Transformation Ready programme – Regional trade & integration Initial presentation of Chapter 2 – Landscape analysis – 16 May 2011
14. Assessing the role of ICTs and the potential contribution of ICTs African Development Bank – Transformation Ready programme – Regional trade & integration Initial presentation of Chapter 2 – Landscape analysis – 16 May 2011 Which trade barriers and aspects of trade management are most susceptible to ICTs? Efficiency What complementary factors are necessary to enable ICTs to add value? Coordination What policy interventions can foster synergies between ICTs and wider context? Knowledge
15. Initial findings – trade flows and customs African countries have embarked on various reform programmes to address tariff and non-tariff barriers to trade. Some of these have incorporated the use of ICTs to facilitate trade easier The automation of customs and border processes is central to enhancing trade through the use of ICTs and most countries in Africa are at some level of automating such processes There is an overall move towards a web-based distributed ICT environment that integrates customs automation, African Development Bank – Transformation Ready programme – regional trade & integration Initial presentation of Chapter 2 – Landscape analysis – 16 May 2011
16. Initial findings –trade flows and customs Different systems that require interface - ASYCUDA widely used (85 countries, 42 in Africa), maintained centrally by UNCTAD for customs control, tax collection and trade stat. Lesson – the use should be preceded by reform of policies and regulations; capacity, the streamlining of processes and standardisation of forms and other trade instruments GAINDE 2000 (SIMBA 2005) – customs system with interfaces for e-payment, risk analysis, valuation and NSW interface Strong support for e-commerce and e-payment, faster development cycle African Development Bank – Transformation Ready programme – Regional trade & integration Initial presentation of Chapter 2 – Landscape analysis – 16 May 2011
56. Auditfeatures Multi-year, multi-module, internally developed Integration of XML Financial – e-payment Adobe forms Integration of risk engine Link to passenger processing system, ware house management
57. Implications of ICT in trade flows and customs Challenges are in cross-border trade Different systems – requirement of exchange across border (XML, RADDEX) Progress with ASYCUDA affects progress in 80% of the countries (e.g. Not all countries moved from ASYCUDA ++ to ASYCUDA World) Need for experience sharing between GAINDE, SARS CMS, ASYCUDA... African Development Bank – Transformation Ready programme – Regional trade & integration Initial presentation of Chapter 2 – Landscape analysis – 16 May 2011
58. 2. Initial findings – trade and transport logistics Focus on automation of movement of goods and infrastructure management (port, airport) less on people, money and services ICT use in trade logistics in Africa has been limited as exemplified by African countries’ score in Logistics Performance Index (LPI) The large number of landlocked countries and border crossings makes logistics in Africa particularly challenging There is overall disconnection between diverse proprietary tools including Electronic Cargo Tracking System, Port Community System, Cargo Community Systems implemented by ports, airports and inland (rail, road) transport authorities Efforts are underway in modernisation of transit and traffic management and studying non-tariff barriers across corridors to alleviate the situation There is an overall move towards a web-based distributed ICT environment that integrates customs automation to sea and air cargo community and other systems used for border management to establish a single nationwide system African Development Bank – Transformation Ready programme – regional trade & integration Initial presentation of Chapter 2 – Landscape analysis – 16 May 2011
59. Initial findings – trade and transport logistics Port management – port community systems Cargo management – cargo community systems Transit management –transport observatories such as databases on corridor performance, automated tracking of delays and reasons Tracking - Electronic shipment tracking system (RUFAATRACK), DHL and Fedex Tracking Payment - e-payment systems, e-banking – e.g. – potential for mobile payment Integration of different logistic system and linking to National Single Window African Development Bank – Transformation
60. Examples -trade and transport logistics Portnet of Singapore Managed by Port of Singapore Authority (PSA) Linked to PSA’s terminal operating system (CITOS) and custom declaration system (TradeXchange) Fully integrated to online platforms for electronic commerce between the port users The Mauritius Cargo Community Services Ltd (MACCS) a CCS Established in 2008 aggregates, optimizes, synchronizes and secures Supply chain processes for Cargo stakeholders -Customs, Port Authority, Port Terminal, Container Freight Station, Freight Forwarders, Importers, Exporters, Customs Brokers and Shipping Agents). African Development Bank – Transformation Ready programme – Regional trade & integration Initial presentation of Chapter 2 – Landscape analysis – 16 May 2011
61. An example – trade and transport logistics TEMA Pilot transit management of Northern corridor (Burundi, DRC, Uganda, Tanzania, Kenya, Rwanda) Pay once - MIS needed at the bank for regional payments – to low them to transfer duties and taxes to relevant revenue authorities right from the country of customs declarations, sealing evasion loopholes and accelerating pace of cross border transactions TEMA corridor observatory Centralized, corridor-based database to monitor corridor performance based on road performance survey and automated GPS data to address corridor bottlenecks African Development Bank – Transformation Ready programme – Regional trade & integration Initial presentation of Chapter 2 – Landscape analysis – 16 May 2011
62. Trade and transport logistics: Implications Valuable support from regional trade hubs and initiatives such as TEMA and TESA ( cross-border flow of goods, money and people) Broadband connectivity is improving access to transaction Aided by countries’ move towards launching single window African Development Bank – Transformation Ready programme – Regional trade & integration Initial presentation of Chapter 2 – Landscape analysis – 16 May 2011
63. 3. Initial findings – trade and business information The development of broadband networks and increasing requirement for Customs, Immigration, Quarantine and Security (CIQS) agencies to collaborate has made it imperative to interconnect border management agencies Progress in backbone networks and broadband wireless has made it easier to interconnect remote border agencies to central sites. A number of barriers ranging from incompatible hardware and software, different data sets and mindsets have hampered efforts towards establishing public and private partnership platforms There is increasing need for sharing of experiences of the progress in developed countries (leading nations like, ZA USA, UK, Japan) and others such as Singapore and Mauritius in implementation of public and private partnership platforms and interconnecting border agencies African Development Bank – Transformation Ready programme – regional trade & integration Initial presentation of Chapter 2 – Landscape analysis – 16 May 2011
64. Initial findings – trade and business information Three major systems(WS, SW and IBM) are the driving forces for information exchange Web services e-regulations portal, e-procedures, forms, handbooks, e-learning system, databases of service providers, e-certification Single Window: Single point of information dissemination Single point for applications/issuance of documents by agency Single point for submission of trading documents by trader Single point of feedback on submissions Integrated Border Management: Coordination via information sharing of agencies: Agency HQ to border offices Agency to agency nationally Agency to counterpart agency regionally African Development Bank – Transformation Ready programme – Regional trade & integration Initial presentation of Chapter 2 – Landscape analysis – 16 May 2011
65. Examples – Single Windowstrade and business informationCase: Tunisie Trade Net (TTN) Established in 2000 as a semipublic agency, to operate a value-added network providing electronic data interchange for stakeholders and expediting the flows and processing of trade documents Brings banks, freight forwarders, port authorities, customs, maritime agents, importers, exporters, the ministry of trade and customs agency together Begun with standardisation and digitisaton of trade documents African Development Bank – Transformation Ready programme – Regional trade & integration Initial presentation of Chapter 3 – RECs, Opportunities and Challenges – 16 May 2011
66. Case Tunisie Trade Net (TTN) Processing shipping manifests, customs declarations, and technical control documents. Providing online tariff payments and transport documents. Network platform to allow for exchange of documents and messages among participants Simple user interface Benefits: reduced import and export processing times from days to minutes. Reduced physical inspection increase the efficiency of government administrative processes African Development Bank – Transformation Ready programme – Regional trade & integration Initial presentation of Chapter 3 – RECs, Opportunities and Challenges – 16 May 2011
67. Case – Mauritius NSW Proprietary system that was set up by Mauritius Network Services Ltd. in collaboration with Crimson Logic For submission of customs declarations, their processing and their return by electronic means Links Customs & Excise Department, Freight Forwarders, Shipping Agents, Customs Brokers, the Cargo Handling Corporation, the Ministry of Commerce, Operators within the Freeport, and Importers and Exporters Linked to Mauritius Automated Clearing and Settlement System (MACSS) public-private partnership between several agencies of the Mauritian Government, the Mauritius Chamber of Commerce and Industry, and Crimson Logic Self sustaining through pay-as you use-basis and helping to develop further e-government programmes African Development Bank – Transformation Ready programme – Regional trade & integration Initial presentation of Chapter 2 – Landscape analysis – 16 May 2011
68. Implications Increasing use of web and electronic commerce tools including XML that facilitate integration of various information sources Country single window initiatives growing, but still Lack of cooperation between logistics agencies (Customs, Immigration, Quarantine and Security - CIQS) internally in particular across borders Tendency to rely on various proprietary software by CIQS agencies that is difficult to create IBM African Development Bank – Transformation Ready programme – Regional trade & integration Initial presentation of Chapter 2 – Landscape analysis – 16 May 2011
69. African Development Bank – Transformation Ready programme – Regional trade & integration Initial presentation of Chapter 2 – Landscape analysis – 16 May 2011
70. ICT application maturity Consolidation, full supply chain Backoffice Few integrated modules global standardization Scope (national, international) Front end Regional (REC) Internal Standards Legislations Policy Networks Narrowband Broadband
71. The ICT RI Dimension IT Promoting RI and trade Regional and national fiber-backbones are improving opportunities for trade CAB is fostering integration in CEMAC region COMESA, EAC and SADC Non-Tariff Barriers (NTBs) reporting, monitoring and eliminating mechanism – www.tradebarriers.org RI promotion of ICT Promotion of ICT strategies (SADC) Custom Union and promotion of ASYCUDA, EUROTRCE (e.g. COMESA, ECOWAS) Regulatory harmonization through regulatory association (WATRA, ARICEA, CRASA, EACO) Regional backbone initiatives (NEPAD, SATA) Regional Trade Hubs (SADC, EAC, ECOWAS Regional Trade Information System, BOS) PPP – TEMA, TESA, Trans-Kalahari corridor e-customs/e-trade Regional protocol on infrastructure (EAC Backhaul –EAC BIN) African Development Bank – Transformation Ready programme – Regional trade & integration Initial presentation of Chapter 2 – Landscape analysis – 16 May 201
72. In conclusion Country case studies (Botswana, Kenya, will bring more light into ICT and RI and innovative use in trade Customs Management Systems (CMS), Port Community Systems (PCS), Cargo Community Systems (CCS), Corridor Transit Systems (CTS), e-payment interconnected through NSW and IBM will be critical, but require Coordination – takes about five years to make breakthrough within and across borders Continuous learning and improvement of CMS, PCS, CCS, CTS, e-payment Adoption of open standard (e.g. ebXML) Lead countries will likely help other countries to emulate them African Development Bank – Transformation Ready programme – Regional trade & integration Initial presentation of Chapter 2 – Landscape analysis – 16 May 2011
73. In conclusion External support needs to focus on comprehensive and integrated regional and national solution and problem resolution TEMA and TESA are providing initial direction African Development Bank – Transformation Ready programme – Regional trade & integration Initial presentation of Chapter 2 – Landscape analysis – 16 May 2011
74. Thank you African Development Bank – Transformation Ready programme – Regional trade & integration Initial presentation of Chapter 2 – Landscape analysis – 16 May 2011