Integrated Border Management - Border Operations Assessment Kasumulu / Songwe

The USAID Southern Africa Trade Hub (SATH) is a regional project working to increase international competitiveness, intra- regional trade and food security in the Southern African Development Community (SADC) region. SATH aims to improve trade facilitation in transit and customs processes through improved and streamlined customs processes and procedures, transport corridors, and transit systems. To support SADC in its effort of reducing high cost of transport in the region, SATH is embarking on an initiative called the Integrated Border Management (IBM) Program which aims to improve border management efficiency to reduce the time and cost for goods crossing the borders. As the initial step in the implementation of the IBM Program, SATH is conducting border operations assessments (BOAs) to understand the border clearance processes as well as challenges border agencies face in executing their work, with the aim of working with the border agencies and their governments to address the challenges.

SATH travelled to Kasumulu/Songwe borders between 9 and 15 June 2011 to assess the processes for clearance of goods and to determine the time it takes trucks to clear the borders. In recognition of the critical role played by informal traders in the SADC region's economies, the border assessment exercise covered the clearance procedures of goods for small traders/ informal cross border traders (ICBTs). The primary purpose of the border operation was to analyze what the current border operations are with a view of making recommendations that would reduce the time and cost of transportation of goods and to set time and cost baselines which will be used to assess the impact of the implementation of the recommendations.

Interviews were conducted with public sector agencies and the private sector to determine what role they played in the clearance of goods, challenges they faced in effectively executing their operations and how they felt things should be improved. Among those interviewed were the Malawi Revenue Authority (MRA), Malawi Bureau of Standards (MBS), Health, Fisheries, Forestry, Agriculture Research, Veterinary, Immigration, Police, Petroleum Importer's Limited and Clearing and forwarding agencies. Interviews were also randomly done with selected traders, informal transporters, bus drivers and conductors to understand the clearance process for small traders. Although the clearance processes of goods were documented for both Kasumulu and Songwe, this document only analyses the processes in Songwe as analysis for clearance processes at Kasumulu border was completed in March 2011 by USAID COMPETE and SATH. Baselines for both Kasumulu and Songwe were established using data collectors to record time of arrival and departure of each truck from border entry and exit points, and where the setup of the border infrastructure did not allow for the collection of this data from border entry and exit points as was the case in Kasumulu, data was collected from the control sheets at the Customs front desk.

Challenges and Constraints

Below is a summary of the challenges identified at the Songwe border.

Key challenges

• There is lack of interagency coordination among agencies at the border resulting in duplication of inspections.

• There is no automatic verification that the declaration processed for export on one side of the border, is the same as the declaration processed for import on the other side, and thus no way to automatically verify that the import declaration has not been undervalued in an attempt to avoid duties. The escort sheets have to be physically carried across borders as a solution but this delays the customs release.

• In instances where the consignment arrives without the required permit, truck drivers travel long distances to apply for and retrieve permits while their trucks remained parked at the border.

• Most of the public agencies lack basic facilities and equipment such as phone, fax, internet and computers.

• While most border agencies need access to the same information in order to assess consignments, there is no ICT connectivity between border agencies for sharing of information.

• There is no electronic/remote filing of declarations by CFAs. Declarations are manually prepared and then presented to DTI for capturing into ASYCUDA; this negates the benefit that RADDEx connectivity provides between Tanzania and Malawi.

• Drivers/importers through CFAs have to make several payments at different pay points for services provided at the border.

• A lot of restrictions exist around the exportation and importation of agricultural products however communication of such information and the effective dates are not readily available or known at the border.

• ICBTs have inadequate access to information about requirements for trade in certain products, customs processes and procedures.

• ICBTs goods took an average crossing time of six hours through the border which is twice the time observed for clearing ICBTs at Nakonde .

• According to the baseline data, transit clearance takes longer than import clearance.

• There is inadequate infrastructure (no scanners , inspection shed, no warehouse).

Additional challenges

• Delays in goods clearance were attributed to a number of issues including MRA ICT network downtime and inadequate bond facilities by some CFAs.

• Presentation of documents that are not genuine by some importers as well as reluctance to declare the correct values and quantities of goods especially in the case of ICBTs result in the need for a higher level of physical examination.

• The border is porous however officials do not have sufficient resources to secure the border adequately.

• Concerns were raised that Malawi's criteria on operating as a clearing agent were not stringent and therefore anyone could operate as one at Songwe.

• The manual processing of ICBT declarations makes data collection and analysis difficult for government statistics.

• The weighbridge has been out of order for very long (more than 12 months) however trucks are still required to go through weighbridges for government statistical purposes.

• Government statistics are currently collected by means of separate checks instead of being integrated with pre-existing inspections, e.g. MERA.

• Concerns were raised especially by small traders on the high increase in customs processing fees from MK1200 (US$8) to MK5000 (US$33) on 3 June 2011.

Recommendations

A number of measures can be implemented immediately to address the constraints or challenges identified at Songwe.

Immediate

• Establish a Joint Border Committee (JBC) for all agencies at the border to discuss operational issues on a more regular basis e.g. monthly and promote a systems approach to the clearing process involving all agencies. All agencies should understand that poor performance by one department affects them all as that affects the overall outlook of their border.

• Develop a JBC Action Plan to address challenges and allocate responsibilities and time for implementation through activities including:

o Overlapping inspections and information needs to be identified and addressed

o Set up a system to regularly collect information for monitoring border performance and effectiveness of Action Plan activities;

o Lobby Tanzania to synchronize border operation hours by opening at 06:00 and not 07:00hrs (CAT) , to avoid the one hour lag in the morning;

o Agencies to improve the dissemination of information on their roles and requirements at the border, processes and applicable tariffs to importers including small traders through appropriate communication media including information desks at the border post and through the ICBT-focused Cross Border Trade Associations.

o Physical examination of machine packed consignments or heavy consignments to be conducted inland since there is no proper equipment at the border;

o Confirm and finalize infrastructure need requirements in order to approach funding sources

o Fast track the process of reviewing the criteria to allow one to practice as a Clearing Agent to ensure only those capable both in terms of resources and expertise are allowed to practice;

o Forestry to formalize their endorsement of required documentation;

Short and Medium Term Recommendations

• Connectivity of clearing agents to ASYCUDA to allow them to file declarations electronically would shorten the process currently taken for filing declarations through DTI;

• Investigate whether RADDEX can be configured to provide automatic verification of import declaration value against export declaration value to replace the physical delivery of escort sheet by officials across the borders.

• ICT connectivity between border agencies and their headquarters to facilitate issuing permits at the border where importer/exporter arrives at the border without permits;

• ICT connectivity between MRA and other Malawi agencies to allow for sharing of ASYCUDA information is necessary to ensure other agencies have access to the needed information for their clearance processes; Once connectivity has been achieved, to consider having a single pay point for fees payable at the border;

• Make collection of statistics invisible to the trader e.g. combining collection with already existing checks by Customs;

• There is need for all agencies to have basic facilities and equipment such as phone, fax, internet and computers to facilitate connectivity and communication among agencies.

• Introduce systems for capturing and analyzing data on ICBTs in terms of who is involved, the types and values of goods.

• There is need to create awareness and understanding amongst Informal Cross Border Traders about the SADC Trade Protocol and how these instruments can benefit them.

• The COMESA STR for cross borders should be extended to Songwe Border post.

• SATH to promote the systematic inclusion of ICBT issues on the regional trade agenda of SADC, Corridor Management Institutions and JBCs.

• SATH to collaborate with other donors to assist in addressing the challenges identified as delaying the movement of goods across the border.