Delays drop sharply on a major West African corridor - a win for trade (and evidence-based advocacy)

Saturday, October 27 2012

Joe Lamport
Delays on the Tema-Ouagadougou corridor, which connect Ghana’s busiest port to Burkina Faso’s inland cargo terminal, Ouagarinter, have fallen by 7% over the past five years – and cargo clearance times have dropped by 25%, a new USAID Trade Hub analysis of data shows.
 
Click to enlarge.
Click to enlarge.
 
“This is very encouraging news,” said Niels Rasmussen, transport director at the USAID Trade Hub. “Stakeholders have acted and real improvements have been achieved. It’s good news for transporters, exporters and importers alike.”
 
Evidence-based advocacy undertaken by various stakeholders independently and by the Borderless Alliance, a USAID Trade Hub-supported private sector-led coalition to increase trade, has led to the improvements, stakeholders said.
 
“I think there’s been so much advocacy that the customs agencies have had to take that into account,” said Yaya Yedan, the country representative of the Burkina Shippers’ Council in Ghana. “The Tema-Ouagadougou transport cost study that the Trade Hub published singled out Ouagarinter as a source of problems and they’ve made significant improvements.”
 
The Borderless Alliance, the USAID Trade Hub-supported private sector-led advocacy coalition, will continue its efforts to increase trade through evidence-based advocacy at its second annual conference in Ouagadougou, Burkina Faso, Feb. 14-15, 2013. Online registration is now open.
 
At meetings with stakeholders - like this one with Members of Parliament in Ghan
At meetings with policymakers - like this one with Members of Parliament in Ghana - stakeholders have pushed for improvements that are lowering delays and costs of transport.
The reduction in delays translates, theoretically, into a 14% drop in transport costs, but further analysis showed transport costs actually decreased by a much more modest 1.7%.
 
Still, the improvements are noteworthy, if for no other reason than what they say about the possibility to increase efficiency and lower costs, Rasmussen said.
 
“People are sometimes skeptical that the delays and costs of transport can be effectively reduced,” he said. “But they can – and they are.”
 
The reduction in delays was measured from the moment a ship berths in Tema to the moment goods are cleared at Ouagarinter, the inland terminal in Ouagadougou. In 2008, it took a total of 22 days, on average, to move a 20-foot container from the port to the inland terminal. In 2012, however, it took 19 days. Transporters immediately realize the benefit – because it costs about USD 400 per day to operate a truck, among other things, companies have said.
 
Despite significant congestion at the Tema Port – where the volume of containers handled has increased by an astounding 60% over the last year – delays along the corridor as a whole fell. The reduced delays were achieved because stakeholders at other points on the corridor improved the efficiency of their procedures.
 
For example, Cotecna, which inspects cargoes arriving to Ouagarinter, reduced its handling times from an average of 6 days to 3 days. In Tema, shipping companies are now working on Saturdays.
 
Stakeholders may take other actions to improve efficiency even further, Rasmussen noted. The Ghana customs service has been mulling the idea of extended work days, he said.
 
“Ports are an intersection of many different players with different interests,” he said. “As stakeholders collaborate more closely – such as under initiatives like the USAID Trade Hub-supported Borderless Alliance – additional improvements are possible – and likely."
 
More improvements are possible
 
The USAID Trade Hub's studies of transport costs on major corridors have led to a set of recommendations (below) that could to even greater efficiency.

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1 comment

Stephen Lande wrote 1 year 16 weeks ago

Reduction in trucking delays.

Congrats on the positive results from this initiative.

I have only one nit pick with your story.

Your table on How to Reduce Transport costs may seriously underestimate the saving from implementation of a single market in ECOWAS with no internal border controls--like the EU.

Although the direct savings per ton may only be USD 9.19 and USD 8.63 per ton for imports and exports respectively, there will be additiona saving in other area including fighing corruption and speeding up customs inspection.  In fact if you can develop the EU system without any border delays or minimal checks, the savings in fighting corruption and speeding up customs clearance will be much greater than from the more efficient border crossing.  That is why Manchester Trade has argued that the US should place a high priority on working wiht member states to agree on and implement the ECOWAS FTA and customs union.

The best way is to convince the EU and other preference donors to join the US AGOA program and extend duty-free treatment until 2020 for all SSA countries.  This would allow the AU to successfully implement the continental FTA and the Abuja Tteaty Customs Union thereby allowing all African countries to negotate FTAs from the same starting point (the CET) and hopefully end up with the same or similar tariff reduction schedules. .   

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