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Customs and border management – Balancing trade with facilitation and public policy objectives


Customs and border management – Balancing trade with facilitation and public policy objectives

Customs and border management – Balancing trade with facilitation and public policy objectives

In recent years, the role of customs officers has transitioned from primarily collecting duties and taxes to a broader role that involves facilitating the flow of goods and services across international borders, and ensuring the legitimacy, safety, and security of goods admitted into the various countries. In carrying out this diverse role, customs officers together with the other border agencies apply certain controls that serve various public policy interests like protecting the economy from illicit trade practices and safeguarding the society and environment from dangerous goods. It has therefore become imperative that the relevant players in international trade maintain the delicate balance of facilitating trade vis a vis implementing various public policies. An example of the delicate balance is the Letter of Commitment of Ghana. Whereas it ensures that export proceeds are repatriated, the private sector views it as an impediment to export facilitation and calls upon the Bank of Ghana to conduct a review on it[1].

The Trade Facilitation Agreement and the Revised Kyoto Convention have been very instrumental in aiding customs officers and other border agencies to adopt measures that facilitate trade whist still collecting taxes. In doing so, customs officials are required to take the fundamental principles of trade facilitation into regard, like transparency, simplification, harmonization, and standardization. Export growth has been largely hampered by persistent non-tariff barriers to trade, which sometimes include protectionist policies. Border officials are only starting to accommodate the thought that less rigid border controls do not necessarily imply less revenue collection. As such, they are slowly implementing various border management reforms. Such reforms often hinge upon a diverse range of factors, some of which include a sound and transparent regulatory framework; organizational collaboration; technology and system interoperability; changes in business processes and procedures; public and private sector capacity building; and change management.

The uptake of border management reforms is still rather slow. However, the rigorous border controls on exports and imports have not helped to eliminate bureaucracy and red tape. Certain practices that impede trade continue to exist. They include undervaluation, smuggling, trade diversion, institutionalized corruption, lack of risk profiling, partial adoption of paperless trade, analogue customs procedures, among others. Similarly, goods in transit are also faced by numerous facilitation restraints resulting from factors like mandatory Customs checkpoints. There’s a lack of trust between customs and the private sector, and this has led to the slow adoption of streamlined export and import processes. All these factors cause delays and increased transaction costs at the border.

To streamline export and import processes at the border, the relevant players ought to be deliberate about the simplification, modernization and harmonization steps that they will undertake to realize this goal. The different administrative organs should increase their reliance on advance electronic manifest transmission. This will hasten the adoption of pre-departure and pre-arrival processing leading to early release of such shipment. They should utilize the risk profiling engines that are already embedded in a number of customs systems. In doing so, they must put in place mitigatory measures against poor imaging, data quality and data integrity.

Customs and other border agencies also need to recognize and accept that digitalisation is an integral part of a modernised customs environment, and that such reforms will make their processes more efficient, minimize transaction cost and increase trade leading to an increased revenue margin. This acceptance has a lot to do with change management. To be able to adopt these changes, they may need to take the initiative to go on study visits to countries with automated customs processes, conduct a comparative analysis between the digital systems and analogue systems and undergo various capacity building initiatives, this would enable them embrace and implement the much needed change.

Whereas the primary foundation of adopting a digitalized customs system is to transform a paper-based process to an electronic one, system interoperability remains a very critical component in digitalization. It is important to ensure that the customs systems are properly integrated with the other relevant systems for a smooth clearance process, and more so that there is a feasible IT system to interoperate such systems with the other relevant government agencies within the single window. this would progressively eliminate the manual processes and paper based entry of documents .

Additionally, custom officers and border officials are vulnerable to corruption by the very nature of their work. Corruption is a deeply rooted, multi-faceted menace that continuously troubles the smooth operation of custom processes and procedures. It needs a coordinated and holistic approach to be reduced and subsequently eliminated from the borders. Thus, the government needs to ensure customs officials’ accountability by putting checks and balances at the border, and undertaking actions that prevent, detect, mitigate, and sanction corruption.

Finally, the relevant stakeholders should also harmonize their export and import regulations whether within a Regional Economic Bloc or a Free Trade Area. There are two sides to a border in cross-border trade, this implies that a trader must comply with the different regulations, each unique to specific jurisdictions that the shipment will transit. It therefore becomes very tedious to comply with the different regulations each time a shipment crosses a territory, it leads to high cost and time wastage at the borders.

Customs officers understand the importance of streamlined processes, most of them have a grasp of what is required of them by the Trade Facilitation Agreement and the Revised Kyoto Convention. The major setback is in implementation. Various governments, relevant border agency officials including customs officers and the private sector need to accord change management the seriousness it deserves. This will enhance momentum in the implementation of such border reforms.

[1] See, Alexander Dadzawa, ‘Ghanian Exporter Laments Letter of Commitment’ (18/8/2022) available at https://www.youtube.com/watch?v=DuqEauJB3rw

About the Author(s)

Edna Oduwo

Edna Oduwo is an advocate of the high court of Kenya with 4 years’ experience in both the public and the private sector, and a specialty in International Trade Law and Policy, which she is very passionate about. She worked with the Kenya Law Reform Commission for 3 years as a legal researcher, thereafter worked at the Ministry of Foreign Affairs, Office of the Registrar of Treaties, as a legal researcher for another 1 year.

Currently, she works with DHL as a GoTrade coordinator, Sub-Saharan Africa. GoTrade is a massive trade facilitation project that streamlines cross-border processes and capacity builds the private sector on matters global trade.

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