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Towards a Central Africa Trade Facilitation Strategy

Towards a Central Africa Trade Facilitation Strategy. BBL – September 29 th 2011. Content. Background for BBL 4-point agenda Logistic challenges and intra-regional TF Logistics challenges and inter-REC TF TF in custom union agenda Policy dialogue Conclusions and way forward.

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Towards a Central Africa Trade Facilitation Strategy

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  1. Towards a Central Africa Trade Facilitation Strategy BBL – September 29th 2011

  2. Content • Background for BBL • 4-point agenda • Logistic challenges and intra-regional TF • Logistics challenges and inter-REC TF • TF in custom union agenda • Policy dialogue • Conclusions and way forward

  3. Background: process • Process clients side: • AFT process: regional preparatory and Geneva • AfDB role • Process Bank side: • Input by Bank TTL • May 19, 2011 • Consensus on content and process: • Content: A holistic trade and transport facilitation strategy accounting for the views/vision of clients: Identify gaps in the current portfolio; propose an framework to all activities • Process: within Bank, with other development partners, with clients • The objectives of the BBL : agree content and process

  4. Background:Some basic few facts • Client side: • Two partially overlapping RECs: CEMAC and ECCAS: • Scope CEMAC + DRC (not accepted by all of the clients) • Two main corridors: Douala and Pointe Noire • Dominance of some large countries: Cameroon, DRC, Gabon • Key to Pan-African integration • Bank side: • Several CD • Not very popular to work on Inter-REC trade (CEMAC - ECOWAS) Trans-Cameroon Corridors (Douala to CAR and Chad) Eastern Africa Corridors (Mombasa, Dar Es Salaam) Trans-Equatorial Corridors (Matadi / Pointe–Noire to CAR and DRC) South – Eastern Africa Corridors (Durban, Dar Es Salaam)

  5. Background: heterogeneous region • A contrasted region: • High income (Gabon) developing –LMIC (Cameroon, Congo), LDCs • Major oil and mineral producing countries in SSA • weak infrastructure, fragile states, land locked countries, sparsely populated countries and forested areas, poor intra-regional interconnection. • Weak regional economy, venerable to external shocks

  6. Background: Underperforming by most rankings In terms of absolute ranking of the countries, the two landlocked states of Central Africa, Chad and Central African Republic, are the last two for the cost to export, and Congo is joining them to constitute the last three for the cost to import.

  7. Background: Poorly integrated region • Deficit of transport infrastructure due to : • Geography: sparsely populated areas not generating sufficient transport demand to justify heavy investment in infrastructure • High costs decreasing competitiveness, and preventing development of trade

  8. 4-Part agenda (1): intra-regional logistics • The trade corridor is decomposed into three components: • Maritime gateway • Land transport link • Inland terminals • For each node and mode, physical operations and documentation process are influencing each other’s efficiency • Overall coordination of the corridor is ensured through policy dialogue

  9. 4-Part agenda (2): connector for Pan-African integration • harmonization of facilitation instruments and policies between RECs • Lack of harmonization can prevent movements of persons (visa issues), movements of trucks across borders, raise payment across border difficulties, etc. • Border management agencies and facilities • For inter-REC trade, all procedures take place at the border and, in most cases, outside the main trading routes. Corresponding border posts generally lack adequate facilities, and border management staff may not be sufficiently trained, particularly when dealing with small scale traders • Transport and logistics services • Inter-REC volumes are modest, and small scale traders are common • Transition from informal to formal trade requires the availability of consolidation and support logistics services so that several traders can combine their goods to access third party transport services. • For each category, the magnitude of the challenges and the policy response differ, depending on whether they refer to formal or informal trade.

  10. 4-Part agenda (3): Trade facilitation and effective customs union • To strengthen the customs union, the following is needed: • Harmonization of tariff nomenclature. • Common regulations guiding customs management. • Shared payment systems. • Removal of standards-related trade restrictions within CEMAC.

  11. 4-part agenda (4): Policy dialogue • TF involves disparate sectors with different interests • Government makes the rules, and private sector must obey them; need effective cooperation from both sides. • The best policy has its roots in facts in an adequate framework for credibility, especially where non-economic factors prevail.

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