High Level Side Event At the 1st TICAD V Ministerial Meeting Innovative Approaches for Accelerating Connectivity in Africa - One Stop Border Post (OSBP) development- Saturday, 3 May 2014 @Palais des Congres, Yaounde, Cameroon 1
Outline of Presentation 1. Background of Corridor and OSBP development 2. What is ONE STOP BORDER POST? 3. OSBP projects in Africa 4. Case Studies 5. Challenges, successes, and ways forward 6. Key questions for discussion 2
Brief Demographics of Africa Landlocked Countries Africa Asia Europe North America South America % of No. of Landlocked Countries 28.6% 29.2% 30.0% 0.0% 16.7% % of Areas of Landlocked Countries 28.5% 15.2% 7.1% 0.0% 8.5% % of People living in Landlocked Coutries 24.4% 3.7% 9.3% 0.0% 4.7% 3
Cost and Days of Export and Import Import Time (Days) Import Cost (USD) Country, Region 2008 Time to Cost to Time 2014 to Cost to export export (US$ import or Group 2008 2014 import (US$ (days) /container) (days) /container) Singapore 6 460 4 440 Sub-Saharan Africa 31 2,108 38 2,793 Landlocked Countries in Africa 40 3185 51 4280 Legend Import Time (Days) East Asia & Pacific 21 856 22 884 Europe <25 & Central Asia 25 2,109 26 2,339 <1000 25 - <35 Latin America & Caribbean 17 1,283 19 1,676 1000 35- - <1500 <45 Middle 1500-45- East <2000 & <55 North Africa 20 1,127 24 1,360 South 2000- Asia 55- <2500 <65 33 1,787 34 1,968 OECD 2500- high 65- income <3000 <75 11 1,070 10 1,090 3000- >75 <4000 Source : JICA CBTI team mapped Source: ICA/JICA team mapped Legend Import Costs (USD) Source : JICA CBTI team mapped >4000 based on 2008 World Bank Data based on 2008 World Bank Data based Source: on ICA/JICA 2013 World team Bank mapped Data based on 2013 World Bank Data 4
Background of Corridor and OSBP Development At the turn of the millennium in 2000, Africa s GDP was US $600 billion. Today it is US $2.2 trillion or four times greater.per capita GDP has tripled. Dr. Kaberuka, President of the African Development Bank (AfDB) at the 50 th Anniversary of the African Union In order to achieve further development Deeper Regional Integration (Abuja Treaty) Release potential Implementation of PIDA PAP Corridor Development 5
Corridor Development Ports ICD Road Check Point Weighbridge Unloading Loading Unloading Destination Road ICD Road Border One less day in travel time 7% increase in exports. Freund et al(2010) Additional day in custom 2.8% cut in the growth rate of exports Martincus et al(2013) 6
What is one stop border post? Definition and Rationale Definition: An OSBP is a border post that combines two stops for national border control processing into one and consolidates border control functions in a shared space for exiting one country and entering another. It 2015 uses simplified procedures and joint processing wherever appropriate. Rational: 1 To achieve greater trade facilitation by combining border clearance activities in a single location so as to benefit from economies of scale, reduce transit delays, simplify clearance procedures, increase cooperation and coordination of controls, foster data and intelligence sharing and to improve risk management and control over 2 fraud. To fosters optimal utilization of available resources like scanning equipment, weighbridges and office accommodation. 7
Map of OSBP in Africa 73 Morocco 74 Tunisia 75 76 Algeria Libya Egypt Mauritania Senegal Cabo Verde Gambia Legend 52 49 Mali Burkina Faso 5048 Niger Guinea Guinea Nigeria Bissau 52 Benin Togo 1 Sierra Leone Ghana Cote Liberia D Ivoire 54 555756 65 Cameroon Under Consideration Construction Planned Construction On-going Construction Completed 72 60 53 61 63 62 59 Equatorial Guinea Sao Tome and Principe 70 Gabon 71 67 69 Chad Central African R. Rep. Congo D.R. 66 Congo Angola 31 Zambia Sudan Rwanda Brundi 24 3025 47 South Ethiopia Sudan South Sudan Tanzania Zambia Malawi Kenya Kenya Zimbabwe Namibia 43 26 Botswana Mozambique Lesotho South Africa 39 11 Uganda 16 15148 17 229 1812 2 37 38 44 45 Swaziland 46 Seychelles 27 28 32 3 7 6 40 19 20 1 45 29 3635 34 42 33 Eritrea Djibouti 41 Madagascar Mauritius Somalia Comoro Seychelles Mauritius 8
Economic Impact of Malaba OSBP (Kenya/Uganda) Monetary Costs of Delays $384.40/Truck/day(24h) $320/Truck/20h X 600 Trucks/Day X 360days = $69,192,000 $70 million of savings per year 20h of reduction 9
What realized the significant reduction at Malaba in early 2012 are following soft infrastructure: Joint operation across both border agencies enabled by EAC law; verification of cargo (where necessary) is conducted by all agencies of both countries at the same time. Interconnections of both customs IT systems that allows preparation beforehand. Streamlined flow of trucks. Based on WB/SSATP workig paper No.96 This is an important fact to remember when numerous programs of border reform tend to focus on the infrastructure. (WB/SSATP workig paper No.96, p. 8) Construction of OSBP facilities may not be an obligation for reduction of crossing time. 10
Case study: Lomé -Ouagadougou Corridor Current procedure: Cinkansé OSBP is not functioning border Port Lomé Cinkansé Togo Cinkansé OSBP Bitou Escorts (2/day) Ouagadougou 2-3 days 0.2-0.3 0.2-0.3 0.3-0.5 0.5-1 day 746km 38km 236km Planned procedure (efforts continuing): OSBP is functioning Simple check & data treatment 2-3 days 0.1 0.5 days The size of OSBP infra should conform to the simplified transit procedure at borders.
Challenges, successes, and ways forward Challenges High transport costs hindering trade of Africa About 70 OSBPs projects. all of existing OSBPs function well (due to lack of coordination among authorities, legal framework, procedural aspects, political will and inadequate facilities, etc.) Success Some success cases e.g. Malaba and Chirundu by joint operation across both border agencies, Interconnections of both customs IT systems, legal framework, streamlined flow of trucks, etc. Way forward Newly adopted WTO Trade Facilitation Agreement (in Dec. 2013) urges WTO members to make sure cooperation among border agencies of adjoining countries by adopting measures such as OSBPs and joint control. Time for accelerate our efforts to improve border procedures and enhance connectivity. High level commitment necessary. 12 12
Thank you for your Attention Merci de votre Attention Obrigado pela vossa atenção 13
Key questions for discussion How do we promote political commitment to accelerate cross-border transport? How do we translate the political momentum into tangible results? What are the common challenges faced by the OSBPs that are not fully functioning and how do we solve those challenges? What can we learn from best practices? In which cases are the OSBP approach most appropriate? How do we decide the size of investment in border infrastructure?
Abuja Treaty (Annex) Integration stages in the Abuja Treaty Target Year in the Abuja Treaty ECOWAS EAC SADC IGAD COMESA ECCAS CEN-SAD 1 st Stage 5 yrs. Strengthen RECs 1999 2 nd stage 8 yrs. Coordinate and harmonize activities and progressively eliminate tariff and non-tariff barriers 2007 3 rd stage 10 yrs. Free trade area X X X To be set X X X 2017 and customs union in each REC 2015 X 2011 To be set 2010 2011 To be set 4 th stage 2 yrs. Continental customs union 2019 5 th stage 4 yrs. Continental common market 2023 6 th stage 5 yrs. Continental economic and monetary union 2028 15
Trading Across Borders Data(Annex) 16
References Djankov, D., C. Freund, and C.Pham. 2010. Trading on Time. Review of Economic and Statistics, 92 (1) : 166-173 Hummels, D. 2001. Time as a Trade Barrier/ Working Paper. www.krannert.purdue.edu/faculty/hummelsd/research/time3b.pdf Kieck, Coordinated border management: unlocking trade opportunities through One Stop Border Post : World Customs Journal Freund et al(2010) -1day in travel time +7% increase in exports.. Hoekman et al(2009) -10% in exporting costs exports by +4.7%. Hummels(2001) Reducing international shipments by 1 day Volume of trade +0.8% Djankov et al(2010) Additional day of export time Moving away from trading partner of 70Km Martincus et al(2013) Additional day in custom -2.8% in the growth rate of exports 17