Africa Under ‘Unprecedented’ Pressure from Rich Countries over Trade Facilitation Agreement

flags2African countries are coming under strong pressure from the United States and the European Union to reverse the decision adopted by their trade ministers to implement the World Trade Organization’s trade facilitation agreement on a “provisional” basis.

At last week’s summit of African Union leaders in Malabo, Equatorial Guinea, “there was unprecedented [U.S. and European Union] pressure and bulldozing to change the decision reached by the African trade ministers on April 27 in Addis Ababa, Ethiopia, to implement the trade facilitation (TF) agreement on a provisional basis under paragraph 47 of the Doha Declaration,” Ambassador Nelson Ndirangu, director for economics and external trade in the Kenyan Foreign Ministry, told IPS.

“This pressure comes only when the issues and interests of rich countries are involved but not when the concerns of the poorest countries are to be addressed,” Ambassador Ndirangu said.

“Clearly, there are double-standards,” the senior Kenyan trade official added, lamenting the pressure and arm-twisting that was applied on African countries for definitive implementation of the agreement.

The TF agreement was concluded at the WTO’s ninth ministerial conference in Bali, Indonesia, last year. It was taken out of the Doha Development Agenda as a low-hanging fruit ready for consummation. More importantly, the agreement was a payment to the United States and the European Union to return to the Doha negotiating table.

The ambitious TF agreement is aimed at harmonising customs rules and regulations as followed in the industrialised countries. It ensures unimpeded market access for companies such as Apple, General Electric, Caterpillar, Pfizer, Samsung, Sony, Ericsson, Nokia, Hyundai, Toyota and Lenovo in developing and poor countries.

Former WTO Director-General Pascal Lamy has suggested that the TF agreement would reduce tariffs by 10 percent in the poorest countries.

In return for the agreement, developing and least-developed countries were promised several best endeavour outcomes in the Bali package on agriculture and development.

They include general services (such as land rehabilitation, soil conservation and resource management, drought management and flood control), public stockholding for food security, an understanding on tariff rate quota administration, export subsidies, and phasing out of trade-distorting cotton subsidies (provided largely by the United States) in agriculture.

The non-binding developmental outcomes include preferential rules of origin for the export of industrial goods by the poorest countries, a special waiver to help services suppliers in the poorest countries, duty-free and quota-free market access for least developed countries (LDCs), and a monitoring mechanism for special and differential treatment flexibilities.

African countries were unhappy with the Bali package because they said it lacked balance and was tilted heavily in favour of the TF agreement forced by the industrialised countries on the poor nations.

The Bali outcomes, said African Union Trade Commissioner Fatima Acyl, “were not the most optimal decisions in terms of African interests … We have to reflect and learn from the lessons of Bali on how we can ensure that our interests and priorities are adequately addressed in the post-Bali negotiations.”

The African ministers in Malabo directed their negotiators to propose language on the Protocol of Amendment – the legal instrument that will bring the TF agreement into force at the WTO – that the TF agreement will be provisionally implemented and in completion of the entire Doha Round of negotiation.

African countries justify their proposal on the basis of paragraph 47 of the Doha Declaration which enables WTO members to implement agreement either on a provisional or definitive basis.

The African position on the TF agreement was not acceptable to the rich countries. In a furious response, the industrialised countries adopted a belligerent approach involving threats to terminate preferential access.

The United States, for example, threatened African countries that it would terminate the preferential access provided under the Africa Growth Opportunities Act (AGOA) programme if they did not reverse their decision on the TF, said a senior African trade official from Southern Africa.

The WTO has also joined the wave of protests launched by the industrialised countries against the African decision for deciding to implement the TF on a provisional basis. “I am aware that there are concerns about actions on the part of some delegations [African countries] which could compromise what was negotiated in Bali last December,” WTO Director-General Roberto Azevedo said, at a meeting of the informal trade negotiations committee on June 25.

The African decision, according to Azevedo, “would not only compromise the Trade Facilitation Agreement – including the technical assistance element. All of the Bali decisions – every single one of them – would be compromised,” he said.

The United States agreed with Azevedo’s assessment of the potential danger of unravelling the TF agreement, and the European Union’s trade envoy to the WTO, Ambassador Angelos Pangratis, said that “the credibility of the negotiating function of this organisation is once again at stake” because of the African decision.

The United States and the European Union stepped up their pressure by sending security officials to Malabo to oversee the debate, said another African official. He called it an “unprecedented power game rarely witnessed at an African heads of nations meeting.”

In the face of the strong-arm tactics, several African countries such as Nigeria and Mauritius refused to join the ministerial consensus to implement the TF agreement on a provisional basis. Several other African countries subsequently retracted their support for the declaration agreed to in April.

In a nutshell, African Union leaders were forced to change their course by adopting a new decision which “reaffirms commitment to the Doha Development Agenda and to its rapid completion in accordance with its development objectives.”

The African Union “also reaffirms its commitment to all the decisions the Ministers took in Bali which are an important stepping stone towards the conclusion of the Doha Round … To this end, leaders acknowledge that the Trade Facilitation Agreement is an integral part of the process.”

Regarding capacity-building assistance to developing countries to help them implement the binding TF commitments, African Union countries still want to see up-front delivery of assistance. The new decision states that African Union leaders “reiterate in this regard that assistance and support for capacity-building should be provided as envisaged in the Trade Facilitation Agreement in a predictable manner so as to enable African economies to acquire the necessary capacity for the implementation of the agreement.”

The decision taken by the African leaders is clearly aimed at implementing the TF decision, but there is no clarity yet on how to implement the decision, said Ndirangu. “We never said we will not implement the TF agreement but we don’t know how to implement this agreement,” he added.

In an attempt to ensure that the rich countries do not walk away with their prized jewel in the Doha crown by not addressing the remaining developmental issues, several countries – South Africa, India, Uganda, Tanzania, Solomon Islands and Zimbabwe – demanded Wednesday that there has to be a clear linkage between the implementation of the TF agreement and the rest of the Doha Development Agenda on the basis of the Single Undertaking, which stipulates that nothing is agreed until everything is agreed!

More than 180 days after the Bali meeting, there is no measurable progress on the issues raised by the poor countries. But the TF agreement is on course for final implementation by the end of 2015. Source: Inter Press Service

African States urged to begin prioritising economic transformation

2014 Africa Transformation ReportThe inaugural Africa Transformation Report ranks Mauritius as the most economically transformed country out of 21 sub-Saharan African countries measured in its African Transformation Index, which takes account of a country’s economic diversification, export competitiveness, productivity, state of technology upgrading and human wellbeing.

The continent’s largest economy, South Africa, ranks second and Côte d’Ivoire third, while Nigeria, Burundi and Burkina Faso prop up the index.

The ranking has been included within a larger 207-page study, which cautions that, while many African economies are growing strongly, most economies are not transforming sufficiently to support a sustainable reduction in poverty, inequality and unemployment.

Six of the world’s fastest growing economies are currently in Africa, including Angola, Nigeria, Ethiopia, Chad, Mozambique and Rwanda, while several others are expanding at growth rates of over 6% a year. However, much of this grow is still premised on the extraction and export of natural resources and is not being broadly spread, leaving more than 80% of the continent’s labour force employed in low-productivity farming, or informal urban business activities.

Compiled over a three-year period by Ghana’s African Centre for Economic Transformation (ACET) in partnership with South Africa’s Mapungubwe Institute for Strategic Reflection (Mistra), the study urges African governments to position economic transformation ahead of growth at the centre of their economic and development policies.

Speaking at a launch in Johannesburg, lead author and ACET chief economist Dr Yaw Ansu said growth was “good” and had arisen as a result of macroeconomic reforms, better business environments and higher commodity prices.

“But economic transformation requires much more,” Ansu stressed, arguing that countries needed to diversify their production and exports, become more competitive and productive, while upgrading the technologies they employed in production processes.

ACET president Dr KY Amoako said the transformation narrative had already been accepted by the African Union in its Vision 2063, as well as by the African Development Bank and the United Nations Economic Commission for Africa. He added that the African Transformation Index provided policymakers with a quantitative measure for assessing their transformation performance and for guiding future strategies.

Mistra executive director Joel Netshitenzhe argued that to turn growth into an “actual lived experience” for Africa’s citizens there was the urgent need to form national social compacts between government, business and civil society to support transformation.

Finance Minister Pravin Gordhan emphasised the same point in his recent Budget address, when he highlighted the work being done to secure a social compact to reduce poverty and inequality and raise employment and investment. Gordhan stressed this could not be a “pact amongst elites, a coalition amongst stakeholders with vested interests. Nor can it be built on populist slogans or unrealistic promises”.

“Our history tells us that progress has to be built on a vision and strategy shared by leaders and the people – a vision founded on realism and evidence,” the Minister stressed.

Netshitenzhe also highlighted the report’s emphasis on coupling growth with social development. “In fact, rather than merely being a consequence of economic growth, a reduction in poverty and general human development can be part of the drivers of economic growth.”

The report highlights key transformation drivers as being:

  • Fostering partnerships between governments and the private sector to facilitate entrepreneurship, investment and technology upgrading.
  • Promoting exports, particularly outside of the natural resources sector.
  • Building technical knowledge and skills.
  • And, pushing ahead with regional integration.

Four transformation pathways are also highlighted, including labour-intensive manufacturing; kick-starting agroprocessing value chains, improving the management of oil, gas and minerals; and boosting tourism.

“It’s good that we are growing – we are no longer the hopeless continent. We can transform this hope into reality, but to do that governments must put transformation at the top of their agendas,” Ansu asserted.

He also called on African citizens to begin to demand transformation. “Ask your government, how come we are not diversifying? How come our productivity remains stuck? How come our technological levels and our exports are not growing?” Source: Engineering News

Mauritius – Customs Training of Trainers Course on SADC Rules Of Origin

The SADC Rules of Origin are the cornerstone of the SADC intra-trade and serve to prevent non-SADC members benefiting from preferential tariffs. The determination of the eligibility of products to SADC origin and the granting of preferential tariffs to goods originating in the Member States is an important process in the implementation of the SADC Protocol on Trade and regional integration. Annex I of the SADC Protocol on Trade provide that goods shall be accepted as eligible for preferential treatment within the SADC market if they originate in the member States, and the qualification of such products shall be as provided in Appendix I of Annex I of the Protocol on Trade.

The 2nd Customs Training of Trainer Course was held on the SADC Rules of Origin at the World Customs Organization (WCO) Multilingual Regional Training Centre, Mauritius Revenue Authority from the 25th -30th November 2013. The objective of the training course is to establish a pool of trainers on the SADC Rules of Origin who can provide guidance and train on the subject at national level to Customs officials and relevant Stakeholders.

During his opening address, Mr Sudamo Lall, Director General of the Mauritius Revenue Authority, laid emphasis on the critical importance of the ‘Rules of Origin’ as it has ‘great impact on the duties to be collected, as businesses increasingly locate the different stages of their activities in a way that optimizes their value-addition chain’. On the other hand Mr James Lenaghan Director Customs mentioned that ‘the Rules of Origin in any Free Trade Area are of prime importance as they serve to determine which goods can benefit from preferential tariffs. This enables member states of a particular Free Trade Area to benefit from the tariffs advantages inherent to the Protocol of trade agreed within that Free Trade Area. Since Customs is the controlling agency for preferential origin, it is vital that our officers are trained to correctly apply the SADC Rules of Origin’.

During their short visit at the training workshop, the Executive Secretary ,Dr Stergomena Tax and the WCO Secretary General, Mr Kunio Mukiriya addressed the group on the importance of rules of origin as the basis for regional integration. Dr. Tax also urged the participants from all SADC Member States to cascade the knowledge gained at the Centre to their respective countries.

The SADC Customs Training of Trainers programme is being implemented in collaboration with the World Customs Organization (WCO), the Regional Office for Capacity Building (ROCB), the WCO Regional Training Centres and GIZ (Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ). Source: SADC Secretariat

Mauritius Revenue Authority – Launch of the WCO Multilingual Regional Training Centre

This slideshow requires JavaScript.

The SADC region is now equipped with a third World Customs Organization accredited Regional Training Centre in addition to the South African and Zimbabwean Regional Training Centre. The Regional Training Centres are excellent platforms for Customs to advance capacity building and to share information and best practices.

The Mauritius Revenue Authority (MRA) has been selected by the WCO to host the RTC as part of the WCO initiative to optimise resources in the region and in line with government’s objective of making of Mauritius a Knowledge Hub. The RTC represents the 25 of its kind adding to the existing Centres across the world and is the fourth one in the WCO ESA region.

The Centre will enable the WCO achieve its mission of enhancing Customs administrations in the WCO ESA region thereby helping these Customs administrations to make an important contribution to the development of international trade and to the socio-economic well-being of their country.

Under the WCO strategy the RTC has four main objectives namely: development of regionally relevant training; maintenance of specialist trainer pools; provision of specialist training at a regional level; and development and support of the WCO’s blended learning programme. Moreover, it has as task to develop and maintain annual training plans and work in partnership with the private sector to maintain effective relationships between Customs and economic operators as well as assist Member countries in their training needs.

The Mauritius RTC is equipped with English, French and Portuguese language facilities as well as an e-learning platform. The Vice-Prime Minister and Minister of Finance and Economic Development, Mr. Xavier Luc Duval, formally opened the RTC on the 25th November 2013. In his opening address, Secretary General Mikuriya commended the leadership and continued engagement of Mauritius, previously as WCO Vice-Chair for the East and Southern Africa (ESA) Region from 2011 to 2013, and now as host of an RTC. He hoped that this RTC would serve to share knowledge and strengthen the human resource network for Customs cooperation and regional integration.

 

Will Africa’s Leaders Finally ‘WALK’ the Talk?

Kenya's capital Nairobi, September 23, 2011. The road, which is being built by China Wuyi, Sinohydro and Shengeli Engineering Construction group, is funded by the Kenyan and Chinese government and the African Development Bank (AFDB). The project will cost 28 billion Kenyan shillings ($330million), according to the Chinese company. AfDB has cut the expected economic growth rate for Kenya in 2011 to 3.5-4.5 percent from an earlier forecast of 4.5-5 percent due to high inflation and a volatile exchange rate, the bank's country economist for Kenya said on Friday. REUTERS/Thomas Mukoya

Kenya’s capital Nairobi, September 23, 2011. The road, which is being built by China Wuyi, Sinohydro and Shengeli Engineering Construction group, is funded by the Kenyan and Chinese government and the African Development Bank (AFDB). REUTERS/Thomas Mukoya

The citizens of the African continent have been introduced to one grand vision of development after the other – from OAU to AU. However, there is a tendency by some of the member countries to retreat from fulfilling regional treaty commitments, which, in some cases, would entail losing a degree of sovereignty.

What is the biggest stumbling block to achieving the African Integration Vision?

But after more than 50 years of solemn regional integration declarations these rhetorical and symbolic efforts still haven’t made the regional integration schemes any more inclusive. For example, when analysing the ‘inclusiveness’ trends as measured by Poverty and Income Distribution Indicators, most Sub-Saharan African countries won’t achieve the MDG target of reducing extreme poverty rates by half ahead of the 2015 deadline. This is despite the increasing total merchandise export as well as within most of the regional economic communities (RECs).

Some have tried to absolve policy-makers of the lack of progress with regards to achieving the milestones of the “linear” integration model based on the European experience and advocated by the Abuja Treaty. They propose an alternative non-trade oriented approach; the so-called functional regional cooperation. This perspective focuses on setting standards for transport such as the SADC recognized driving license; construction of a new regional corridors; an African identity etc. This less ambitious but perhaps more realistic perspective could lead to failure in removal of trade barriers, while at the same time presenting a much more positive outlook of regional integration than what international economic data would otherwise show.

The AfDB is attempting to get to the bottom of this regional integration – inclusive growth conundrum in its 2013 African Development Report, currently under preparation. But we might already get some good answers to this question through an ongoing research project entitled ‘PERISA‘. Led by the ECDPM & SAIIA, it intends to look deeper into what regional integration/cooperation really entails and what the underlying drivers/factors and specific bottlenecks are. In July, we got a hint on what to expect from the research project from a very enriching Dialogue on the Drivers and Politics of Regional Integration in Southern Africa.

National versus Regional

South Africa has developed a ‘2030 vision’ and national strategic plan. It includes some proposals to reposition South Africa hegemon in the region. However, very few of the National Development Plans (NDP) in Southern Africa even mention regional integration. Mauritius being an exception as it benefits from the support of the Regional Integration Support Mechanism (RISM), which is disbursed directly into the budget of the government as untargeted financial assistance. Notwithstanding this support and the disbursement to the nine other Member States of the Common Market for Eastern and Southern Africa (COMESA) and additional donor-supported initiatives in other RECs, there is still a flagrant absence of alignment between commitments taken at the regional level and the actual planning process at the national level.

This discrepancy between the regional and national level is a matter of concern because if these Regional Trade Agreement (RTA) commitments do not feature amongst the country’s national priorities then there is an even greater risk that they will not be implemented in practice. This latent risk perhaps goes a long way in explaining the relative poor record when it comes to the level of domestication of regional integration legal instruments, implementation of trade and regionalintegration-related budgets, implementation of Council of Ministers’ trade-related decisions, which the AfDB will seek to capture through its forthcoming system to measure regional integration in Africa.

During the meeting a call for a community of practice among national planning agencies was made which could assist and drive the integration process through the convening of regular meetings between regional and strategic national planners. It is positive to observe that Southern African countries seem to have warmed up to this idea of an informal community of practice outside the formal institutional structure.

What can Development Finance Institutions do about this inertia?

In addition to the supply-driven collection of regional integration statistics, Multilateral Development Banks (MDBs) could also lend technical and financial support to the formation of Regional Planning entities’ process. Amongst others this could include providing support to the above-mentioned community of practice of national development planners interacting with regional planners. This could eventually ensure that regional integration gets fully mainstreamed within the national planning policy instruments as illustrated in Mauritius’ latest 2013 budget, whose overarching theme rests on six main objectives, including fast-tracking regional integration.

There seems to be a consensus that the RECs must have technical capacity to facilitate the RTA negotiation process and decision-making process. Both the UK Department for International Development (DFID) through its TMSA programme and the AfDB through its forthcoming 2014-2016 Tripartite Capacity Building Programme are attempting to address this deficiency in a coordinated manner in line with fundamental principles of the Paris Declaration on Aid Effectiveness. Source: ECDPM
website (An analysis by Christian Kingombe, Chief Regional Integration & Infrastructure Officer at the AfDB).

 

SA Trade Policy Goes Against Integration Tide

South African Trade & Industry Minister Rob Davies

South African Trade & Industry Minister Rob Davies

South Africa has adopted a new trade policy approach aimed at looking at its own interest first, despite a drive for more regional integration to sustain Africa’s trade growth with the rest of the world. Importers of several products have been experiencing dramatic increases in tariffs from South Africa, as well as an increase in anti dumping and safeguard measures aimed at protecting South African industries.

Trade and Industry Minister Rob Davies this week approved the increase of tariffs on frozen poultry following an application by the local poultry industry. George Geringer, a senior manager at PwC, said regional trade relations had been put on the back burner in favour of measures to protect South African manufacturing industries against cheaper imports.

“Government realised that manufacturing as a percentage of gross domestic product has declined from about 40% to about 12% in the past 20 years,” Mr Geringer said at the 16th Africa Tax and Business Symposium hosted by PwC in Mauritius.

Trade between Africa and the rest of the world has increased by more than 200% in the past 13 years, with optimism from the World Bank that Africa could be on the brink of an economic takeoff, similar to that of China and India two decades ago.

A key element for Africa to sustain the trade growth is regional integration to build economies of scale and size, in order to compete with other emerging markets – but limited resources, internal conflict and the lack of a mechanism to monitor the integration process is blocking it, says trade analyst from PwC.

South Africa has been regarded as the “champion” of the Southern African Development Community (Sadc). Sadc member countries eliminate tariffs, quotas and preferences on most goods and services traded between them. The member countries include Mauritius, Mozambique, Namibia, Swaziland, Botswana and the Democratic Republic of Congo.

The assistant manager at PwC’s international trade division, Marijke Smit, said less than 10% of African nations’ trade was with each other, compared with 70% between member states of the European Union. Benefits of regional integration include increased trade flows, reduced transaction costs, and a regulatory environment for cross-border networks to flourish. Ms Smit said an unsupportive business environment and cumbersome regulatory framework, weak productive capacity, inadequate regional infrastructure, poor institutional and human capacity, and countries’ prioritising their own interests stood in the way of integration.

Mr Geringer referred to the new action plan endorsed by leaders from the African Union in January last year. The plan will see the creation of a continental free-trade area by 2017. The enlarged free-trade area will include Sadc, the East Africa Community and the Common Market for South and East Africa (Comesa). The trade bloc will include 26 nations in three sub-regions. Source: BDLive.com

Nigeria Customs Service – Organically Developing The National Single Window

Nigeria Trade Hub 2The WCO Single Window Experts Accreditation Workshop took place on 23rd – 27th September, 2013 at Customs Border Control Training Centre (CBCTC), Seoul, Korea. The objectives of the workshop included:

  • Promoting the work of Single Window
  • Developing expertise meant for executive management
  • Developing different expertise in other technical areas of Single Window.

Developing this expertise brought about the WCO Data Model and SW accreditation Workshop as there are several areas where experts can emerge, including areas of Business processes, Legal, Data Model etc. The past efforts in capacity building served as a guide to developing the program for the workshop. The expectation included shaping assistance and building capacity in the areas of Single Window.

The participants included representatives from Nigeria, Mauritius, Chile, Singapore, Tanzania, Mexico, United Arab Emirates, Russia Federation, Saudi Arabia and Korea. Three out of the ten participants (Nigeria, Singapore, Mauritius) were accredited Co-Facilitator Status for the World Customs Organization at the end of the workshop. This demonstrates that Nigeria is certainly moving in the right direction and aligning to International Standards. Source: Nigeria Trade Hub

African Countries of the Future 2013/14

fDI 2013-14 Rankings for Africa

fDI 2013-14 Rankings for Africa

South Africa has been crowned as the African Country of the Future for 2013/14 by fDi Magazine, One of the economic powerhouses of the African continent, South Africa has been named fDi Magazine’s African Country of the Future 2013/14, with Morocco in second position and Mauritius in third. New entries into the top 10 include Nigeria and Botswana. Click here to access the full report!

South Africa has consistently outperformed its African neighbours in FDI attraction since fDi Markets records began in 2003. Figures for 2012 build upon South Africa’s historical prominence as an FDI destination with the country attracting about one-fifth of all investments into the continent – more than double its closest African rival, Morocco. In 2012, FDI into South Africa amounted to $4.6bn-worth of capital investment and the creation of almost 14,000 jobs.

South Africa claimed the title of fDi’s African Country of the Future 2013/14 by performing well across most categories, obtaining a top three position for Economic Potential, Infrastructure and Business Friendliness. Its attractiveness to investors is evident in its recent FDI performance, where the country defied the global trend with 2011 and 2012 figures surpassing its pre-crisis 2008 statistics. Despite a slight decline of 3.9% in 2012, South Africa increased its market share of global FDI, which further increased in the first five months of 2013 as the country attracted 1.37% of global greenfield investment projects. According to fDi Markets, South Africa now ranks as the 16th top FDI destination country in the world.

South Africa’s largest city, Johannesburg, was the top destination for FDI into Africa and is one of only five African cities that attracted more investments in the first five months of 2013 compared to the same period of 2012. South Africa ranked third behind the US and the UK as a top source market for the African continent in 2012, accounting for 9.2% of FDI projects.

In 2010, South Africa became the ‘S’ of the BRICS – five major emerging national economies made up by Brazil, Russia, India and China. While FDI into South Africa fell 3.9% in 2012, this was the lowest recorded decline of the BRICS grouping which, on average, experienced a 20.7% decline in FDI. In its submission for fDi’s African Countries of the Future 2013/14, Trade and Investment South Africa (TISA) stresses the importance of the country’s attachments to its BRICS partners. Source: fDI Magazine

WEF – Global Competitiveness Report 2013-14

WEF - Global Competitiveness Report 2013-14South Africa is ranked 53rd this year, overtaking Brazil to place second among the BRICS. South Africa does well on measures of the quality of its institutions (41st), including intellectual property protection (18th), property rights (20th), and in the efficiency of the legal framework in challenging and settling disputes (13th and 12th, respectively). The high accountability of its private institutions (2nd) further supports the institutional framework.

Furthermore, South Africa’s financial market development remains impressive at 3rd place. The country also has an efficient market for goods and services (28th), and it does reasonably well in more complex areas such as business sophistication (35th) and innovation (39th). But the country’s strong ties to advanced economies, notably the euro area, make it more vulnerable to their economic slowdown and likely have contributed to the deterioration of fiscal indicators: its performance in the macroeconomic environment has dropped sharply (from 69th to 95th).

Mauritius moves up by nine places this year to 45th place, becoming the highest ranked country in the sub-saharan region.

Low scores for the diversion of public funds (99th), the perceived wastefulness of government spending (79th), and a more general lack of public trust in politicians (98th) remain worrisome, and security continues to be a major area of concern for doing business (at 109th).

Building a skilled labor force and creating sufficient employment also present considerable challenges. The health of the workforce is ranked 133rd out of 148 economies-the result of high rates of communicable diseases and poor health indicators more generally.

The quality of the educational system is very poor (146th), with low primary and tertiary enrollment rates. Labor market efficiency is poor (116th), hiring and firing practices are extremely rigid (147th), companies cannot set wages flexibly (144th), and significant tensions in labor-employer relations exist (148th). Raising educational standards and making the labor market more efficient will thus be critical in view of the country’s high unemployment rate of over 20 percent, with the rate of youth unemployment estimated at close to 50 percent. For the full report, click here!

SADC Member States driving the Customs regional integration agenda

Delegates from the SADC member states gathered in Port Louis, Mauritius between 9 and 13 October to establish a SADC Customs ICT strategy for the region. The conference, sponsored by the United Nations Economic Commission for Africa, coincided with the 200th anniversary of Customs in Mauritius.

Following recent developments on IT connectivity and data exchange in the region, the conference addressed other areas of ICT in Customs which have a significant influence not only for internal Customs processing but its impact and effect on the broader stakeholder community. The conference was well attended with representatives from Angola, Mozambique, Lesotho, Swaziland, Namibia, Botswana, Tanzania, Zimbabwe, Seychelles, Mauritius, Democratic Republic of Congo, Malawi, and South Africa.

The event also drew international interest with representatives from the World Customs Organisation, Trans-Kalahari Corridor, SA Trade Hub, the East African Community, Southern African Customs Union, and the UN Economic Commission for Africa.

“Customs Connects, Borders Divide” conveyed the central theme for the event with the WCO IT and Capacity Building expert, Mats Wicktor, providing an enabling platform upon which the conference deliberations occurred. A detailed presentation clearly outlined the WCO’s the basis for standards, recommendations and guidelines, with specific reference to the Data Model, the Unique Consignment Reference and the most recent developments on Globally Networked Customs (GNC).

Other keynote addresses were made by Mozambique (DGA) on their experience in implementing the Single Window concept (for more details on this project visit URL: http://tfig.unece.org/case-stories.html).  Host nation Mauritius presented their Cargo Community System, and a number of other IT developments namely, e-Certificate of Origin, valuation database for 2nd hand motor vehicles, and the recently implemented Customs Enforcement Network (CEN) solution. SARS presented its Customs Modernisation journey highlighting some of the key ICT products and features and the respective efficiencies and trade facilitation benefits introduced for trade. Furthermore, it elaborated on its current bilateral data exchange initiatives with Swaziland, Zimbabwe, Mozambique as well as the IBSA countries.

The business end of the conference saw the finalisation, tabling and vetting of a draft SADC Customs ICT strategy. The strategy provides a broad framework, focussed around the concept of Customs-to-Customs data exchange. It seeks to create synergy between member states in regard to aspects such as transit management, common risk and enforcement principles, the entrenching of the One Stop Border Post concept, as well as automation of certificates of origin. From a SADC point of view, the strategy will support the realisation of its Strategic Plan – envisaged to include a Customs Union.

Mauritius Customs turns 200

Mauritius Customs 1st Day CoverOn the ocassion of my 300th post, join me in raising the Portcullis for Mauritius Customs! During September, the Mauritius Revenue Authority (MRA) marked the bicentenary celebrations of Customs services in Mauritius by launching a special First Day Cover with four stamps on the Customs Department to mark the bicentenary celebrations of Customs Services in Mauritius. The issue of these new stamps is an acknowledgement of the significant contribution of the Customs services to the economic and social life of the country for more than 200 years. The four stamps depict the Customs Services in different fields with denotation of Rs 7, Rs 8, Rs 20 and Rs 25 illustrating some of the areas where the customs services are involved in their fight against crime and fraud prevention through the use of people, animals and state-of-the-art technology.

On 18 August 1797, a ‘bureau de Douane’ was established for the purpose of raising revenue in a context of war and blockade. It became a major financial institution contributing towards 50% of total revenue. The British took over in 1811 and installed the first Collector of Customs.British Customs practices were gradually introduced in the colony in line with British commercial law.

In modern times, the MRA Customs Department has set as one of its main objective to combat the illicit trade of drug and other illicit substances. The MRA has a team of 6 drug detector dogs handled by certified dog handlers trained by the French Customs and the South African Revenue Services (SARS). Our dogs have been selected carefully from examined litters and were declared competent drug detector dogs as per SAQA Unit Standard in the handling of a service to detect illicit substances.

Since 2008, our sniffer dogs have detected drugs in 25 instances involving the import of Cannabis, Heroin, Hashish, Subutex and other illegal substances worth around Rs 42,530,543. The Drug Detector Dog squad operates at the courier services, Parcel Post Office, Vehicle Search at Airport, Port and Freight Stations, Port area, Airport (Plaisance Air Transport Services & Luggage on carrousels at SSR Int. Airport and Aircraft search) as well as at the seaport for search of vessels. Source: Mauritius Revenue Authority

Namibia buys into ‘Single Window’ concept

From April 12-13, Southern African Trade Hub (aka USAID) presented Single Window as a cutting-edge tool for trade facilitation to the Ministry of Industry and Trade, Ministry of Finance, Customs and other private sector organizations, explaining how a NSW for Namibia could improve the Trading Across Borders index ranking, which currently stands at 142 out of 183 countries. Single Window is a crucial instrument that will eliminate inefficiency and ineffectiveness in business and government procedures and document requirements along the international supply chain, reduce trade transaction costs, as well as improve border control, compliance, and security.

Benefits for Government: A Single Window will lead to a better combination of existing governmental systems and processes, while at the same time promoting a more open and facilitative approach to the way in which governments operate and communicate with business. Traders will submit all the required information and documents through a single entity, more effective systems will be established for a quicker and more accurate validation and distribution of this information to all relevant government agencies. This will also result in better coordination and cooperation between the Government and regulatory authorities involved in trade-related activities.

Benefits for trade: The main benefit for the trading community is that a Single Window will provide the trader with a single point for the one-time submission of all required information and documentation to all governmental agencies involved in export, import or transit procedures. As the Single Window enables governments to process submitted information, documents and fees both faster and more accurately, traders would benefit from faster clearance and release times, enabling them to speed up the supply chain. In addition, the improved transparency and increased predictability would further reduce the potential for corrupt behaviour from both the public and private sector.

If the Single Window functions as a focal point for the access to updated information on current trade rules, regulations and compliance requirements, it will lower the administrative costs of trade transactions and encourage greater trader compliance. The Permanent Secretary for the Ministry of Industry and Trade underscored the need for Namibia to proceed with the Single Window concept, and advised participants that his Ministry, together with the Ministry of Finance, would jointly package the Single Window concept and submit it to Cabinet for Government approval.

In Southern Africa, Mauritius already has an effective Single Window, which is reflected in its “Trading Across Borders” ranking of 21. Mozambique recently launched its pilot Single Window. SATH will support and facilitate the processes for the establishment of a Botswana National Single Window system to streamline cross border trade. The current SATH Trans Kalahari Corridor (TKC) Cloud Computing Connectivity program, which is being piloted between Botswana and Namibia, provides an ideal technology platform for linking Botswana and Namibia Single Windows, leveraging the investment by BURS, Namibia Customs and SATH to date in the development of this system. SATH is currently in the process of gauging support for National Single Window in South Africa.

Excuse my cynicism, but the SA Trade HUB  has yet to demonstrate the viability of its Cloud Computing solution between Namibia and Botswana Customs. What is reported above is the usual sweet and fluffy adjectives which accompany most international customs and trade ICT offerings, ignoring prerequisite building blocks upon which concepts such as Cloud and Single Window may prove beneficial and effective. Past project failures in Africa are usually blamed on the target country in not bedding down or embracing the new process/solution – never the vendor. Given the frequency of technology offerings being presented by donor agencies on unwitting national states, there seems little foreign interest in ‘bedding down’ or ‘knowledge transfer’ than the ‘delivery of expensive technology’.

Related articles and references