East Africa streamlines customs posts and accelerates trade
One-stop borders: Faster, more efficient and less corrupt
by Eleanor Whitehead
Scenes of trucks backed up for endless kilometres are all too familiar at Africa’s overland border crossings, leading to high costs, chronic inefficiency, corruption and sluggish trade competition.
Trucking companies complain that they waste an average two to three days at East African border crossings. “Borders constitute between 10 and 15% of the total transit times,” explained Hosea Nyangweso, principal civil engineer with the East African Community (EAC), a five-country bloc dedicated to regional cooperation comprising Burundi, Kenya, Rwanda, Tanzania and Uganda.
These queues cost money and can add up to a 25% surcharge on transport costs along the corridors of the EAC, according to Paul Sitienei of the Kenyan logistics group Panal Freighters.
In turn, expenses constrain Africa’s regional trade and the export of goods from the continent’s many landlocked countries. The consumer is too often the victim of these extra expenditures.
Over the past decade, governments have identified “one-stop border posts” (OSBPs) as a potential answer to these challenges.
In April the EAC passed its long-awaited One Stop Border Posts Bill, which makes it mandatory for member states to build single-stop border stations as part of an effort to boost trade flow. The bill will require that partner states “implement one- stop border processing arrangements by establishing and designating control zones at the respective border posts,” the EAC secretariat said. It requires the rubber stamp of regional heads of state before it becomes legislation. It is unclear when this might happen.
Currently trucks in the region stop twice—once on each side of the border— to be inspected and submit customs documentation. If implemented, the law will end that inefficiency, making just one stop mandatory. This requires neighbouring countries to coordinate their rules and agencies, and to position border officials for both nations at a single point. Truck drivers can then submit paperwork, including customs documentation or applications for import-export permits, at that one post. The process sounds simple, but the collaboration can shave days off transport times.
“The essence is to simplify and harmonise the systems between the agencies involved and to get the agencies working together,” explained Paul Richards, senior adviser at Crown Agents, an international development company. “With that harmonisation there could be major moves forward in facilitating the movement of goods and people.”
Under a process which began in 2005, East Africa is developing 15 single-stop borders along the main transport corridors in the region, with about half of these now nearing completion, according to Mr Nyangweso. For example, the Holili border post between Kenya and Tanzania is complete and will be inaugurated soon, according to regional officials.
These developments often require huge infrastructure upgrades to improve roads, parking facilities and customs buildings. “It’s a whole transformation process,” he explained.
The benefits are already visible at Malaba, a crossing along the main highway between Nairobi, Kenya, and Kampala, Uganda, which began its still incomplete transformation to a one-stop post in 2008. Even without hard infrastructural upgrades, average crossing times dropped from nearly 25 hours at the end of 2011 to less than four hours in 2012, according to the World Bank. Truckers saved about $69m per year using that crossing, the bank reported.
The EAC is unable to say how long it will be before all its one-stop crossings will be up and running, but when they are, Panal Freighters projects that border delays will fall by up to 60%. “This reduction in waiting times will reduce costs for businesses and increase their competitiveness by ensuring that products reach markets faster,” Mr Sitienei said. “As trade volumes increase, truck operators will be able to service their financial obligations and cut the costs involved in acquiring financing.”
But for those efforts to be successful, border posts require more than just hard infrastructure enhancements. Once the right legislative frameworks are in place, upgrades to information and communications technology (ICT) and staff training are both crucial.
“The border post is a business operating environment, not a piece of physical infrastructure,” explained Steve Brady, director for customs and trade facilitation at Crown Agents. “The physical infrastructure is crucial, but you need investment in the technology and institutional frameworks that go alongside it.”
The World Bank flags certain technology requirements: “The measures which seem effective in reducing crossing times are linked to the preparation of the border crossing…prior to the arrival of the truck,” said Olivier Hartmann, senior trade facilitation specialist at the World Bank. “In that sense, information technology systems enabling advance information to be provided and exchanged are critical.”
OSBPs, including Malaba, are implementing ICT systems allowing them to receive and review documents before the vehicle arrives at the border, speeding up the formalities truck drivers must undergo on site.
Others are installing electronic single windows, which allow different authorities to enter trade-related information into a computerised network. The idea is to combine the procedures operated by different agencies in a single country, making the data available to many participants.
Africa’s best-known one-stop border station has proved the benefits of these developments. Since Zambia and Zimbabwe upgraded the border post at Chirundu in late 2009, crossing times have been cut from an average of 96 hours in 2008 to about 33 hours in 2013 despite a 65% increase in traffic volumes, according to TradeMark Southern Africa (TMSA), a programme to improve trade performance in Eastern and Southern Africa.
“Unlike those days when we didn’t have a one-stop border post, there is not so much waiting at Chirundu now,” Zimbabwean truck driver Constantine Pajeri told the TMSA team.
Transport groups can accrue savings of up to $600,000 thanks to faster and more efficient crossings at Chirundu, according to TMSA estimates. Faster processing times mean that governments have additional revenue: tax collection on the Zambian side of the border increased more than 100% to $20.3m per month between 2009 and 2012.
In turn, those earnings trickle down to the consumer. “A saving of one day or two at the border means more round trips for the trucking company. In a competitive environment, reduced costs lead to reduced prices, or at least may help to contain price increases,” explained the World Bank’s Mr Hartmann.
The upgrades may also help to reduce sleaze at the posts. Border crossings are hotspots for corruption, but new ICT systems can increase transparency, the EAC’s Mr Nyangweso said.
Currently, Tanzanian transport companies each pay around $13,000 per month in bribes to revenue authorities, police officers and customs officials, while their Kenyan counterparts pay an average of $6,715 a month, according to Transparency International. “The trade facilitation deficits faced at border posts are people-driven and related to cumbersome customs procedures, bureaucratic behaviour and corruption tendencies,” Mr Sitienei explained. “With the East African community states coming together, we have seen some sense of organisation and reduction of bureaucracy and corruption, which are the main contributors of increase in cost.”
Mr Nyangweso agrees that the single-stop posts will help curb sleaze. “We expect that once the EAC law is operational the problem will reduce,” he said. “The use of ICT such as electronic single window systems will reduce the human interface, which will mitigate the issues of corruption which we know are rampant.”
East Africa is not the only region implementing one-stop border posts. The crossings are being considered or developed across most of the continent. Following in the footsteps of the EAC, the Economic Community of West African States (ECOWAS) is also developing the necessary legal frameworks for joint border posts.
Meanwhile, the EAC is sharing information with its neighbouring regional group- ings, the Southern African Dev- elopment Community (SADC) and the Common Market for Eastern and Southern Africa (COMESA).
“Those regions are revis- ing their protocols to align with the EAC Act. We are trying to standardise the infrastructure services between the whole tripartite sub-region,” Mr Nyangweso stated.
There is a way to go before the region’s planned single- stop crossings are fully operational, but the cogs are in motion and the EAC is confident. “Once the regional law is signed by the heads of state there’s not much obstacle left,” he said.
