REMOVING BARRIERS TO TRADE IN THE ECA REGION

1. REMOVING BARRIERS TO TRADE IN THE ECA REGION BUILDING SUSTAINABLE CAPACITY FOR COMPETITIVE TRADE AND FOOD SECURITY AFRICAN GRAIN TRADE SUMMITS 2013 Dismantling barriers to regional integration & market access to optimize market opportunities & Food Security. Enhancing Transport Logistics in Eastern Africa. Mr. David Adolwa, USAID E.A. Trade Hub Regional Transit Trade Advisor (ECA) THE PRESENTERS VIEWS MAY NOT REPRESENT USAID VIEWS

2. IN ANOTHER LIFE

3. PRESENTATION OUTLINE

4. FACT SHEET • Regional program working in 15 countries in East and Central Africa • Funded by the US Agency for International Development (USAID). • The Project is designed to enhance economic growth and food security by stimulating increased trade and competitiveness in both regional and global markets by. • Harmonizing regional trade and transit policies and procedures • Supporting private sector trade associations • Building capacity of regional businesses to take advantage of preferential trade opportunities.

11. As far back as the 1960s, architects of African integration agreed that establishing the required transport infrastructure was vital to lubricate the wheels of intra-African trade and distribute its benefits regionally. The continent's leaders embarked on ambitious projects such as the trans-African highways -- segments of which would eventually stretch from Cairo to Dakar, Tripoli to Windhoek and Lagos to Mombasa.

13. 21 KILOMETERS

15. COMPARATIVE COSTS The high cost of transport is the most significant barrier to trade and investment in East and Central Africa. Africa remains the most fragmented continent and is composed of micro economies excluding Nigeria, South Africa and Egypt. Africa is home to the majority of landlocked countries and least-developed countries. Intra-African trade is very low. At an average of 10 to 20 %, the level of trade among African countries compares unfavourably with other regions of the world. Intra-trade among the EU-27 is around 70 per cent, 52 per cent for East Asia, 50 per cent for North America and 26 per cent for South America. A major constraint to regional and international trade is the high transaction costs for trade across borders in East Africa due to deficiencies in soft and hard infrastructure. The problem is even more severe for the landlocked East African Countries that include Rwanda, Burundi, DRC and South Sudan. CORRIDOR PERFORMANCE DATA FROM VARIOUS STUDIES 20093

16. COST TO THE TRANSPORT BUSINESS DATA FROM LEADING LOGISTICS SERVICE 2011

17. BARRIERS @ THE BORDER • Poor/inadequate infrastructure • Conflict between public and private sector • Disconnect with HQ • Excessive control and regulation • Incompetence and corrupt practices • Lack of trade facilitation mind set • Low levels of ICT usage • Turf wars • Unprofessionalism & incompetence

18. WHAT IS BEING DONE JICA, WORLD BANK, TMEA , AFDB USAID EATH • Roads • Weigh Bridges • Cranes • ICD • One Stop Border Posts • Container Terminals • Business Plans • Customs Clearance Systems • Single window systems • Revenue Authority Digital Data Exchange • Single Window Operations Systems • Joint Border Committee • One Stop Centers • Lean Operations • Joint Inspections • Resource Sharing • Joint Resource Mobilization • Private Sector Participation • Training

19. EVERYONE TO FULFILLING SAME AGENDA EVERYONE HAS OWN AGENDA MINDSET Private Sector Government and its agencies All efforts focused on facilitating trade Development Partners Local Government

20. STRATEGIC FRAMEWORK For Removal Of Barriers To Trade And Investment PRIVATE SECTOR DRIVEN

21. The Joint Border Committee • Multi-sectrol collaboration of key Government agencies as well as Private Sector involved in the clearance of cargo for the purpose of: • Supporting and promoting 24/7 border post operations • Promoting joint inspection of Cargo • Enhancing inter agency collaboration at border post • Promoting the sharing of available resources at the border • Creating a trade facilitation mind set • Defusing tension and conflict between public and private sector • Eliminating the disconnect with HQ

22. JBCS IN EAST AFRICA • Over 1,800 persons mobilized • Over 55 Government Agencies involved • 3 Corridors covered • 16border posts covered

23. BORDER OUT BOUND CUSTOMS CONTROL AREA INBOUND CUSTOMS CONTROL AREA IN BOUND CUSTOMS CONTROL AREA OUT BOUND CUSTOMS CONTROL AREA

24. BORDER OUT BOUND CUSTOMS CONTROL AREA INBOUND CUSTOMS CONTROL AREA IN BOUND CUSTOMS CONTROL AREA OUT BOUND CUSTOMS CONTROL AREA

25. BORDER ONE STOP BORDER POST CUSTOMS CONTROL AREA ONE STOP BORDER POST CUSTOMS CONTROL AREA

26. MAIZE PRICES IN EA ON 20/09/13

27. HIGHEST & LOWEST

28. MOVE THE MAIZE TO BUJUMBURA Masindi • Distance :1,011 km • Journey time: 3-4 days • Number of customs territories to cross :3 • Number of Border posts :4 Katuna/Gatuna –Akanyaru/Kanyaru • Average number of polices checks 2-5 • Weigh bridges 2 (Uganda) • Condition of Road Mostly good condition, poor sections under construction • Transport cost $ 4,500-5,500 Semi -Trailer-6 Axles Six axle semi trailer 28 tones payload = 311 of 90 kg bags TRANSIT CARGO Bujumbura

29. MASINDI MAIZE IN BUJUMBURA 38.24% Purchase price Masindi 31.41% Transport to Bujumbura 30.35 % Traders Margin TRADERS MARGIN + OVERHEADS WHOLESALE PRICE FOR MAIZE US$ 51.19 Wholesale price in Bujumbura COST OF TRANSPORT AND OTHER FREIGHT CHARGES

30. THE FREIGHT FORWARDING AGENT • Clearing & forwarding of cargo is involving and you do not have the expertise and infrastructure to cope with the multiple transactions. • There are established and licensed firms that have accumulated adequate expertise and infrastructure in this field that you can use. • They act as agents for the Customs Services Department and are licensed to provide declaration services on behalf of the Commissioner of Customs. • They also provide you with logistics management of your cargo from source to destination. It is their responsibility to ensure that your goods are delivered to their destination in good condition and in good time while at the same time complying with Customs and other statutory requirements. • They will charge you a fee for the services they provide. East African Community Customs Management PART XI CUSTOMS AGENTS Licensed Freight Forwarding Agents (Customs Agent) act as agents for transacting business relating to the declaration or clearance of any goods or baggage other than accompanied non-manifested personal baggage of a person travelling by air, land or sea.

32. ENHANCING THE FFA EFFICIENCY • Country Specific Guidelines for • Air Exports Cargo • Air Imports Cargo • Road Imports Cargo • Road Exports • Sea Exports • Sea Imports • Managing Transit Cargo

34. COMMON EQUIPMENT Vehicle & Semi -Trailer-6 Axles 28T PAYLOAD TRANSIT CARGO 8T 16T 24T Maximum Gross Vehicle Mass (GVM) 48T

35. COMMON EQUIPMENT Vehicle & Drawbar Trailer-6 Axles 26T PAYLOAD TRANSIT CARGO TRANSIT CARGO 8T 16T 8T 16T Maximum Gross Vehicle Mass (GVM) 48T

36. EMERGING OPPORTUNITY IN AXLE LOAD CONTROL Vehicle & Drawbar Trailer-7 Axles 56 TONE PAYLOAD TRANSIT CARGO TRANSIT CARGO 16T 8T 8T 16T 8T 16T Maximum Gross Vehicle Mass (GVM) 56T

37. OTHER SUPPORT INITIATIVES

38. EA BORDERS - UNIQUE – DIVERSE

39. BORDER ASSESSMENT

40. DATA EXCHANGE AMONG REVENUE AUTHORITIES International Sea Port Inland Border Post Destination or Origin of Cargo KEY TO SYMBOLS Cargo Truck Customs Data

41. HEAVY COMMERCIAL VEHICLE • Driver Training Testing & Certification

42. Joseph Adewa's Executive Director Total Kenya Ltd

45. RESULTS TO DATE

46. BUILDING SUSTAINABLE CAPACITY FOR COMPETITIVE TRADE AND FOOD SECURITY 123 Gardenia Road off Magnolia Road, Gigiri P. O Box 1555 – 00606 Nairobi, Kenya T: +254-719-032-000 F: +254-719-032-271 E: info@competeafrica.org www.competeafrica.org THANK YOU VERY MUCH FOR YOUR ATTENTION