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Coordinating the relationship between border agencies on both sides of the border will decrease clearing times and set the stage for streamlining documents and interface ICT-systems with the other sides border agencies. This will ultimately facilitate the establishment of more one-stop border posts across major routes in the region and the implementation of the National Single Window System across the region which can enhance the harmonization and hence efficiency of border procedures.
The ESA BMO Network, the Eastern and Southern African Business Membership Organisation Network, represent the private sector in ten ESA countries: Botswana, Burundi, Kenya, Mozambique, Rwanda, South Africa, Tanzania, Uganda, Zambia and Zimbabwe.
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For a full overview of the different border agencies in the ESA region see annex 1
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Beside the lack of interface between existing ICT-systems, the majority of the systems are not robust enough, there are frequent network disruptions and also a number of smaller border posts are challenged by not having any ICT-systems at all. Naturally, this is adding to delays and hence increasing the costs of doing business in the region. Fortunately, ICT solutions are today available to enhance compatibility or ensure harmonization between border post systems, e.g. through the RADDEx (Revenue Authorities Digital Data Exchange) a system developed to facilitate exchange of Customs data between two or more countries. The RADDEx solution enables customs data to be communicated instantly from the point of transit origin, through all points of transit, to the point of destination. This advance notification facilitates streamlined processing of goods, increased transparency, increased accuracy in goods verification and risk assessment and enhances overall efficiency including the avoidance of duplicate data capture at border posts. This data exchange also reduces customs clearance time thus benefiting both the private sector and revenue authorities alike.
ESA BMO Network recommendations National governments must provide the necessary support to promote the use of RADDEx (Revenue Authorities Digital Data Exchange) throughout the ESA region Increase the capacity of the systems (bandwidth) to withstand the massive processing at the border posts and the exchange of data within the countries. Use of web-based systems to enable private sector to access the network 24-hrs, 7 days a week. There is need to upgrade the systems to enable users work offline (document processing ) and transmit online Use alternative sources of energy, e.g. automatic generators and solar power should be installed at the border posts for continuity during power outages
The ESA BMO Network has carried out research in 5 member countries: Kenya, Mozambique, Rwanda, Zambia, and Zimbabwe. A total of 50 companies contributed to the findings. 5
Surveys and interviews carried out among members of the ESA BMO Network revealed that it is in fact quite expensive for companies to trade in the region due to differences in border procedures. From the survey carried out, indications are that companies on average experience delays of approximately 3 days when crossing border 5 post in the ESA region. These delays in time translate into monetary costs in terms of extra transport costs and loss of production.6 In addition companies revealed that they also incur extra costs in form of informal fees to speed up the process of clearing cargo through the various border agencies and officials. This is a delicate issue but companies report that they spend 20-200 US$ on informal fees for each border crossing. Hence, there clearly seem to be a challenge of business ethics in both public and private sector at the border posts. Case: If a truck is transporting cargo from Zambia through Zimbabwe into Mozambique, it can be expected that the company will spend a total of 6 days crossing the two borders amounting to $555 just in transport costs. Imagine that the driver is also forced to pay informal fees at approximately $80 per crossing. This translates to another additional $160 to the cost for moving cargo across the border lines in the ESA region and hence, a total of $715 is incurred. This becomes quite expensive if a company on average moves cargo 10 times per year per truck: $7,150 per year. These added costs are hurting the competitiveness of ESA businesses. Consequences of the differences in border procedures in terms of delays and additional costs are hampering intra regional trade. And ultimately the costs are passed on to consumers. As long as these challenges are not addressed properly by Governments in the ESA region, there will be less economic development, less job creation and ultimately less poverty reduction in the 10 countries.
4. What to do
The problem and negative consequences of having different border procedures in the ESA region can in fact be reduced significantly. Best practices from the South East Asian region shows, that transnational harmonization of border procedure will increase the effective and efficient clearance of goods, boost the participation of national industries in the global marketplace, contribute significantly to the economic competitiveness of nations, encourage investment and development of industry and increase the participation of small and medium enterprises in international trade.7 There is an overall need to harmonize border procedures throughout the three phases: coordinating agencies, streamlining documentation and interfacing ICT-systems across all ESA member countries to make border transactions more efficient and effective. In addition to the issue specific recommendations presented under each section above coordinating agencies, streamlining documentation and interfacing ICT-systems the ESA BMO Network has the following overall recommendations to facilitate the harmonisation.
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Transport costs cover costs per truck passing the border including costs for driver, hire of truck, and cargo storage. Production costs cover costs in respect to loss of production time, run out of stock, company may become an unreliable supplier, and risk of losing markets, e.g. Zimbabwean companies report of an 12,000 US$ loss of production per day of delay at border posts. 7 Proceedings of the Eastern Asia Society for Transportation Studies, Vol. 5, pp. 1728 - 1741, 2005
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Other Recommendations
The ESA BMO network also recommends the following; Reduce the number of documents The governments in the ESA region should work towards reducing the number of documents used for trading goods across the border Reduce the number of agencies operating at the borders The governments in the ESA region should review the agencies represented at the borders with a view to reduce the number of agencies at the border so as to increase the speed of clearance at the border 24 hour limit Governments must set targets for speeding up the process of crossing borders to reduce the average time of 3 days. Hence the ESA BMO Network recommends that national and/or regional targets should be not exceed 24 hours inclusive of obtaining all documents, during inspections, electronic registration processes. Awareness of requirements There should be clear communication and greater awareness of all the border procedures and specific requirements to allow companies to be more informed and be adequately prepared. This awareness could be by way of internet, pamphlets, posters, clients charter etc. Harmonizing opening hours Increasing common opening hours will shorten the time that cargo spends on crossing borders and this allows the borders to meet the target of spending no more than 24 hours. Reducing informal costs The additional informal costs incurred by business indicate that there is widespread mentality among border officials that encourage corruption. To tackle this menace it is recommended that national governments should consider; reducing human handling of documents by computerizing the border clearance processes; improving border staff competence; installing a regional or national hotline to report suspected incidents of corruption and establishing punitive penalties to those issuing and receiving informal fees.
Kenya
Mozambique
Zambia
Zimbabwe
Rwanda
Botswana
Kenya Revenue Authority Kenya Bureau of Standards Kenya Plant Health Inspectorate Services Immigration Police Department of Veterinary Services Alfandegas (Customs) MIPS Intertek Zambia Revenue Authority Immigration Zambia Bureau of Standards Ministry of Agriculture Plant and Phyto sanitary services Ministry of Livestock and Fisheries Ministry of Health Police Zimbabwe Revenue Authority Immigration Police Ministry of Agriculture Ministry of Health Customs Immigration Police Agriculture Customs Immigration Ministry of Agriculture Botswana Bureau of Standards
Road Transport and Safety Agency Ministry of Works and Supplys Road Development Agency Drug Enforcement Commission
Country Kenya
Mozambique
M14 DUC Bill of Lading Memorandum Quality Certificates depending the product Permits and licenses Cargo Manifest
Zambia
Customs Declaration Bill of Lading Commercial Invoice Certificates of Origin Transit Document Customs Declaration Bill of Lading Licenses Certificates of Origin Transit Document Customs Declaration Bill of Lading Commercial Invoice Certificates of Origin Transit Document Packing List
Zimbabwe
Rwanda
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