Digitalise transport and trade procedures to ease the supply of essential goods during COVID-19 and beyond
Governments across the world have implemented measures to stem the spread of coronavirus (COVID-19) pandemic. Trade-related measures have been implemented particularly to ensure the continuity of cross-border trade particularly of essential food and medical supplies at the same time avoiding the spread of COVID-19 through cross-border activities. Many have also closed sea and land borders to people while allowing essential cargo, subject to stringent screenings. Truck drivers have been tested and/or quarantined to curb transmission of the virus, and some border posts are operating at minimal capacity and for reduced hours to reduce human contact. These measures have added to already cumbersome border management procedures. Additional costs for storage and demurrage, while truck drivers wait for their COVID-19 test results or are quarantined contribute to frustrating to intra-regional trade.
Ports, which are an essential facility for the conduct of Africa’s trade with global partners, are facing challenges related to the capacity of warehousing and storage facilities as ships wait to load or disembark, as screenings, testing and other procedures are completed. This means that traders and logistics companies are facing higher ports tariffs and/or storage fees. Delays in ports due to COVID-19 restrictions, port staff shortages and new health checks therefore slow down the supply chain of essential food and medical supplies, impacting food security and critical healthcare.
This Blog focuses on the potential benefits of digitalisation of transport and trade procedures at border posts, including ports. Digitalisation of procedures not only facilitates the swifter movement of goods across borders but importantly also reduces human contact at the borders – containing the spread of COVID-19 through cross-border trade activities. More generally, digitalisation can also contribute to reducing corruption. This is of course important during times of crisis but is a fundamental governance concern.
During the 2020 Southern African Transport Conference webinar, the World Bank’s Martin Humphries recommended important short and medium-term solutions to secure the continuity of supply chains, and facilitation of safe and expeditious cross border trade. Humphries recommended, inter alia, the increased digitisation of ports to reduce the frequency of paper and human-based contacts, the introduction of gate appointment systems, improved cybersecurity, and increased automation in cargo operations. He proposed the adoption of multiple-entry or visa-free entry for truck drivers to increase the flexibility of cargo operations, and regional harmonisation of health testing and requirements, trucking regulations, vehicle standards, and licensing arrangements to support cross-border trade. Humphries further recommended the need for increased internal and external border agency collaboration through the use of information technology tools and electronic single window clearance to minimise physical contact, designing special (SPS or customs) regimes for expedited clearance of essential goods. He also encouraged the need for a transit guarantee scheme to reduce cost and improve the efficiency of cross-border traffic. He urged governments to work with private sectors through National Trade Facilitation Committees (NTFC) to identify services standards and precise inspection procedures for essential products. While many African countries have included private sector representation on their NTFCs, not all have done this. Since the private sector trades, and can provide very practical input on trade facilitation matters, it makes sense to institutionalise their participation in these committees. This strengthens trade policy and governance processes.
In addition to Humphries’ recommendations, we further urge the use of electronic customs documents and payments, pre-clearance, approved economic operator and more comprehensive single window solutions. Supported by effective risk management digital tools this would help to reduce border delays and increase the resilience of the transport sector as the world is dealing with the effects of COVID-19. But this should be standard practice in a 21st century economy. Some African countries (e.g. Ethiopia, Rwanda) are already implementing these measures during this pandemic. If all African countries implement such systems, and ensure inter-operability or harmonisation of systems, the multiplier effects, not only for intra-Africa trade, but also for our trade with the rest of the world, would be significant. There are important lessons from our COVID-19 experience for the implementation of the Annex to the African Continental Free Trade Agreement (AfCFTA) that deal with customs and border management, trade facilitation and transit trade.
It is also important to recognise that services play an important role in trade facilitation. References above to transport, e-payments and digital solutions more general are a pertinent reminder of this. Most intra-Africa trade is transported by road. This makes, for example, transport regulation a key consideration for trade facilitation and very important to the achievement of the objectives of the African Union’s flagship project ‘Boosting intra-Africa Trade BIAT.’ Transport services are one of the priority services sector in the AfCFTA negotiations. Member states have agreed to develop frameworks for regulatory cooperation. We contend that harmonisation of some regulations may well be necessary to bring meaningful benefits from the specific services. Transport regulations are a good example and very important in the context of this discussion. Harmonising axle load limits and regulations related to container dimensions, for example, is essential to ensure efficient transport services and cross-border trade. Cooperation on these regulations will not be sufficient. Transporters will still face the challenge of dealing with different consignment loads across borders into different jurisdictions with different regulations.
As countries grapple with the health and devastating economic effects of this pandemic, we need solutions focused on saving lives, creating jobs, and facilitating safe trade of essential goods across borders. Trade facilitation features prominently in several Annexes to the Protocol on Trade in Goods in the AfCFTA. Member states can take important lessons from the experience during the pandemic, to ensure effective and pragmatic preparation for the implementation of the AfCFTA to boost intra-Africa trade, but also improve trade performance with the rest of the world.
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