Transport Development and Trade Facilitation World Bank – UNOHRLLS June 13th

Responding to the needs of the landlocked countries Road projects funded by the donor community spend hundreds of millions in infrastructure to reduce vehicle operating costs and travel time But how to ensure that savings are passed to the traders, and ultimately to the consumers? Analytical work by the World Bank highlighted two important facts: Reducing costs only translates into reduction of prices when market conditions are right Delays and uncertainties have a greater impact than usually estimated

The economic cost of delays Border crossing delays, because they affect traders directly and indirectly, are of particular interest Delays affect not only directly the traders: Inventory cost (not new) But also uncertainties (see ‘Cost of Being Landlocked’) But also indirectly through more expensive logistics services: Idle trucks are not making money: less trips mean less income, and higher fixed costs to cover on each paying trip Idle goods need storage space: terminal congestion, queues at borders, etc.

Reducing border delays: 2, 1, 0 border posts? On the assumption that border delays were caused by border agencies, one-stop border posts were quickly adopted as the ‘miracle solution’: East Africa: EAC program to convert internal and external borders into OSBP Southern Africa: SADC Infrastructure Master Plan West Africa: ECOWAS Joint Border Post program But different approaches: Keeping layout / facilities but specializing posts New facilities development The next few slides are showing how reduction of border crossing time was achieved in East Africa

Background on the Northern Corridor Border Crossing Border delays are / were a concern for trucking companies and traders Regional strategy to convert border posts into OSBP, with Malaba as pilot SSATP provided support to TTCA-NC for before / after surveys on the three main crossings: Malaba (over 1000 trucks per day for both directions) Busia Gatuna

Reducing border delays works By chance, a major reform of operational practices at the border took place in the middle of the survey period (Nov to March 2012) On average, crossing time was reducing by 20h. In the survey sample: Before reform, 49% of trucks spent more than 24h at the border ( of which 13% over 48h) After the reform, all trucks passed in less than 6h

But remedy must be based on accurate diagnosis Border agencies process are frequently blamed for delays, but in reality, situation is more nuanced: Operating hours play a role: even if border agencies operate 24/7, agents often do not Driving patterns: borders as ‘rest stops’ for trucks Infrastructure not always a blocking factor: reform produced results in Malaba before rehabilitation

So, how they did it? Regional Economic Communities, Countries and development partners have coordinated their efforts in the East Africa OSBP program for a whole range of issues However, critical enablers of the reform were: The supporting IT The culture of cooperation The involvement of the private logistics operators (truckers, drivers and C&F agents) The measures that worked concerned all: Border management agencies: advance preparation with pre-arrival lodgment of the declaration (thanks to IT), and inter-agency coordination when the trucks have arrived Clearing agents: mandatory pre-arrival lodgment of declarations Truck drivers: traffic and parking rules to decongest access route and Customs Controlled Zone

Lessons for other corridors Too often, the focus of border projects is on physical facilities And when it is not, the focus is on public border agencies reform The Malaba case is rebalancing the respective importance of: Infrastructure versus inter-agency cooperation and IT Purely public versus an inclusive approach involving public and private

Olivier Hartmann & Dominique Njinkeu SSATP / TFF 10