DRAFT TRENDS IN TRANSPORT AND LOGISTICS ON THE TEMA-OUAGADOUGOU-BAMAKO CORRIDOR. West Africa Trade Hub Technical Report #51

Transcription

1 DRAFT TRENDS IN TRANSPORT AND LOGISTICS ON THE TEMA-OUAGADOUGOU-BAMAKO CORRIDOR West Africa Trade Hub Technical Report #51 May 2013

2 TRENDS IN TRANSPORT AND LOGISTICS ON THE TEMA- OUAGADOUGOU-BAMAKO CORRIDOR West Africa Trade Hub Technical Report No. 51 May 2013 This publication was prepared for review by the United States Agency for International Development. Afua Eshun prepared this report under the direction of Niels Rasmussen, Transport Director at the USAID West Africa Trade Hub. For more copies of this report please contact DISCLAIMER: THE AUTHORS VIEWS EXPRESSED IN THIS REPORT DO NOT NECESSARILY REFLECT THOSE OF THE UNITED STATES AGENCY FOR INTERNATIONAL DEVELOPMENT OR OTHER AGENCIES OF THE UNITED STATES GOVERNMENT.

3 TABLE OF CONTENTS TABLE OF CONTENTS... 3 LIST OF FIGURES... 5 LIST OF TABLES... 5 ACRONYMS AND ABBREVIATIONS... 6 EXECUTIVE SUMMARY... 7 INTRODUCTION TRENDS IN REGIONAL TRAFFIC FLOWS TRAFFIC THROUGH WEST AFRICAN PORTS SAHELIAN TRANSIT TRAFFIC TRAFFIC THROUGH TEMA PORT BURKINA INTERNATIONAL TRAFFIC MALI INTERNATIONAL TRAFFIC TRENDS ON THE TEMA OUAGA CORRIDOR TRENDS IN COSTS, DELAYS & PROCEDURES ON THE TEMA-OUAGA CORRIDOR IMPORTS: TEMA-OUAGA CORRIDOR EXPORTS: TEMA-OUAGA CORRIDOR REFORMS & CHANGES IN REGULATIONS & PROCEDURES 2008 TO TEMA BAMAKO CORRIDOR INTRODUCTION IMPORTS: TEMA-BAMAKO CORRIDOR EXPORTS: TEMA BAMAKO CORRIDOR RECOMMENDATIONS: TEMA-BAMAKO CORRIDOR WEST AFRICA VERSUS NORTH AMERICA ( ) CONCLUSIONS & RECOMMENDATIONS REFERENCES ANNEX A: ASSUMPTIONS, EXCHANGE & INFLATION RATES ANNEX A.1: CASE STUDY ASSUMPTIONS ANNEX A.2: DEFINITION OF COSTS USED IN THE STUDY ANNEX A.3: DEFINITION OF STANDARD TIME AND DELAYS ANNEX A.4: INFLATION & EXCHANGE RATES ANNEX A.5: EU AND NORTH AMERICAN TRANSPORT PRICE INDEXES ANNEX B: TEMA OUAGADOUGOU CORRIDOR (IMPORT) ANNEX B.1: VESSEL ARRIVAL IN TEMA PORT ANNEX B.2: PROCEDURES & COSTS IN TEMA PORT (TRANSIT IMPORT TO BURKINA FASO) ANNEX B.3: ROAD TRANSPORT LEG - TRANSIT IMPORT TO BURKINA, MALI & NIGER

4 Annex B.3.1: Trucking Prices 2008 and 2012 Northbound Cargo Annex B.3.2: Procedures & Costs at Paga (Ghana Border with Burkina Faso) Transit to Burkina, Mali or Niger Annex B.3.3: Import Procedures & Costs at Dakola (Burkina Faso Border with Ghana) ANNEX B.4: IMPORT PROCEDURES & COSTS AT OUAGARINTER 2008 & Annex B.4.1: Ouagarinter Import Procedures and Costs in Annex B.4.2: Ouagarinter Changes in Import Procedures and Costs from 2008 to ANNEX C: OUAGADOUGOU-TEMA CORRIDOR (EXPORT) ANNEX C.1: EXPORT PROCEDURES AT OUAGARINTER (SOUTHBOUND CARGO) ANNEX C.2: ROAD TRANSPORT LEG BURKINA EXPORT (SOUTHBOUND CARGO) Annex C.2.1: Trucking Prices 2008 and 2012 Burkina Export (Southbound Cargo) Annex C.2.2: Export Procedures at Dakola (Southbound Cargo) Annex C.2.3: Transit Export Procedures at Paga, (Southbound Cargo) ANNEX C.3: PROCEDURES & COSTS AT TEMA PORT (TRANSIT EXPORT) ANNEX D: OUAGADOUGOU BAMAKO SUB-CORRIDOR (MALI IMPORTS & EXPORT) ANNEX D.1: PROCEDURES AND COSTS IN TEMA PORT (TRANSIT IMPORT TO MALI) ANNEX D.2: TRUCKING PRICES TRANSIT IMPORT TO BAMAKO ANNEX D.3: Annex D.2.1: Annex D.2.2: Annex D.2.3: ANNEX D.4: MALI IMPORT THROUGH TEMA PORT (NORTH & WEST BOUND CARGO) Faramana (Burkina Border with Mali) Procedures for Mali Import Koury (Mali Border with Burkina) Procedures for Mali Import Faladie (Bamako Truck Terminal) Procedures for Mali Import MALI EXPORT THROUGH TEMA PORT (EAST & SOUTH BOUND CARGO) Annex D.3.1: Faladie (Bamako Truck Terminal) Procedures for Mali Export Annex D.3.2: Koury (Mali Border with Burkina) Procedures for Mali Export Annex D.3.3: Faramana (Burkina Border with Mali) Procedures for Mali Export ANNEX E: REVISION TO THE 2010 TEMA-OUAGA CORRIDOR DATA ANNEX E.1: INTRODUCTION ANNEX E.2: REVISION TO THE 2008 CORRIDOR COST & TIME DATA ANNEX E.3: REVISION TO THE 2010 NORTH AMERICAN BENCH MARKING DATA ANNEX F: TRAVEL TIME, TRUCK UTILIZATION & BORDER CROSSINGS ANNEX F.1: TRUCK TRAVEL TIMES AND DELAYS ON THE TEMA-OUAGA-BAMAKO CORRIDOR ANNEX F.2: TRUCK UTILIZATION TEMA-OUAGA-BAMAKO CORRIDOR ANNEX F.3: BORDER CROSSING TIMES ANNEX G: UEMOA & GHANA SUMMARY TRAFFIC STATISTICS ANNEX G.1: SUMMARY ANNEX G.2: PORT TRAFFIC (COTONOU, LOMÉ, TEMA, ABIDJAN, DAKAR) ANNEX G.3: LANDLOCKED COUNTRY TRAFFIC (NIGER, BURKINA FASO, MALI) ANNEX H: RECOMMENDATIONS FROM ROAD GOVERNANCE EVENTS

5 LIST OF FIGURES Figure 1: Map of the Lomé-Ouaga and Tema-Ouaga-Bamako Corridors... 9 Figure 2: Map of West African ports Figure 3: West African port traffic Figure 4: Sahelian transit traffic Figure 5: Tema port throughput (1,000 tonnes) Figure 6: Tema Port throughput (tonnes) versus time at anchor and berth (days) Figure 7: Tema Port Number of vessels versus total throughput (tonnes) Figure 8: Tema port transit (import& export) traffic by country (1,000 tonnes) Figure 9: Cotonou port transit traffic (1,000t) Figure 10: Dakar port transit traffic (1,000t) Figure 11: Lomé port transit traffic (1,000t) Figure 12: Abidjan port transit traffic (1,000t) Figure 13: Burkina overseas import (1,000t) Figure 14: Burkina overseas export (1,000t) Figure 15: Mali overseas import (1,000t) Figure 16: Mali overseas export (1,000t) Figure 17: Alternative routes Tema-Bamako Figure 18: Tema-Bamako routes via Ouagadougou Figure 19: 2010 WA-NA transport cost comparison revised Figure 20: 2012 WA-NA transport cost comparison LIST OF TABLES Table 1: Trade Hub corridor reports data collection & publishing years Table 2: Burkinabé traffic (1,000t) Table 3: Import One 20 container (TEU), door-to-door to Ouagadougou Table 4: Import One 20 container (TEU), break-bulk to Ouagadougou Table 5: Export One 20 container (TEU), door-to-door from Ouagadougou Table 6: Export One 20 container (TEU), break-bulk from Ouagadougou Table 7: Distance to Bamako from the sea & traffic through various ports : Table 8: Import One 20 container (TEU), door-to-door to Bamako Table 9: Import One 20 container (TEU), break-bulk to Bamako Table 10: Export One 20 container (TEU), break-bulk from Bamako Table 11: West Africa and USA Transit Time and Cost Comparison 2012/ Table 12: Improve West Africa Transport & Logistics - Issues and opportunities

6 ACRONYMS AND ABBREVIATIONS ASYCUDA Automated Systems for Customs Data CMC Conseil Malien de Chargeurs CEPS Customs Excise and Preventive Services ( Ghana) CMTR Conseil Malien des Transporteurs Routiers CFA Communauté financière d Afrique CIF Cost, Insurance & Freight ECOWAS Economic Community of West African States EMAGHA Entrepôts Malien au Ghana EU European Union GCNet Ghana Community Network Services Limited GHS Ghana Cedis GPHA Ghana Ports and Harbours Authority GSA Ghana Shippers Authority IRTG Improved Road Transport Governance (OPA in French) ISRT Convention A/P.4/5/82 relating to Inter-State Road Transit of Goods (ECOWAS) IST Convention A/P.2/5/82 relating to Inter-State Road Transportation of Goods JAPTU Joint Association of Port Transport Unions OPA Observatoire des pratiques anormales OTRAF Organisation de transporteurs routiers du Faso MPS Meridian Port Services NA North America PMD Passage magasin douane SDV SCAC Delmas - Vieljeux TBL Through bill of lading TEU Twenty-foot equivalent unit UEMOA Union Economique et Monétaire Ouest Africaine USAID United States Agency for International Development USD United States Dollars WA West Africa XOF CFA franc, the common currency in UEMOA countries 6

7 EXECUTIVE SUMMARY This Report shows that Transport & Logistics efficiencies on the Tema-Ouagadougou corridor have improved considerably during the period Transport & logistics on the corridor (in US dollars) have gone down by 9% while reported bribes have been reduced by a whopping 50%! Processing times for import transit cargo along the corridor have also improved by about 15% and overall transit time by 4%, this in spite of the fact that rising port traffic has caused new s. For example, increased port congestion has resulted in container vessels spending longer time waiting at anchor before berthing. At the same time, container vessels calling at Tema are getting larger with the result that they spend longer time at berth. The improvements in West Africa contrast with the fact that moving a 20 container from the port of Newark to Chicago a distance slightly longer than Tema to Ouagadougou has increased by 50% since 2010, as reported by Maersk. This report is the third in a series of corridor studies prepared by the Trade Hub. The first report studied transport and logistics on the Tema-Ouaga corridor. Data for that report was collected in 2008 and the report was published in The second report, published in 2012, looked at the Lomé -Ouagadougou corridor. The current report, the third in the series, documents the developments and trends that we have observed on the Tema-Ouaga corridor between 2008 and The study also includes detailed descriptions of procedures, and s on the Tema- Bamako corridor as a benchmark for future trend analysis. The first section of the report reviews traffic flows in the sub-region, which covers UEMOA countries and Ghana. Traffic flows are an indicator of economic growth. The more growth the more trade and the more trade the more goods are transported. Traffic flows are also an indicator of the relative importance of ports and corridors. While port traffic 1 has increased by about 12% this growth is unevenly distributed among the ports and corridors. The Ports of Cotonou, Lomé and Abidjan had relatively stagnant traffic flows with growth limited to about 5% whereas traffic through Dakar port grew by 19% and Tema experienced an increase in traffic of 31%. Abidjan is the most important port in the area handling almost a third of total traffic followed by Tema and Dakar each with about 20% of total traffic and Cotonou and Lomé each with around 13% of total traffic. Transit traffic with the Sahel landlocked countries represent about 12% of total traffic. Cotonou handles on average about 40% of this traffic. In 2008 the other four ports handled about 15% each of total transit traffic but by 2012 Lomé, Abidjan and Dakar all saw their share of transit traffic grow to about 20% each while Tema saw its share decrease to only 7%. This may be related to the stricter implementation of axle load regulations in Ghana than elsewhere. 1 As reported by Cotonou, Lome, Tema, Abidjan and Dakar ports, the 5 largest ports in the area covered by the study, i.e. UEMOA countries plus Ghana. 7

8 Traffic in West Africa is very unbalanced with export representing less than 30% of total traffic. This is even more pronounced for the land-locked Sahel countries where export represents only 5% of total international traffic. Section 2 reviews developments on the Tema-Ouaga corridor from 2008 to 2012 and, as mentioned above, we documented important improvements in transport and logistics efficiencies. We also noted that using containers on the Tema-Ouaga corridor is faster and cheaper than transporting goods as break-bulk. Still, the most common handling mode on the corridor is transporting goods as break-bulk. Some of the reasons for this include the high deposit for the container required by shipping lines and the short turnaround time allowed before demurrage charges apply. The report also notes that the relative low transport for export observed in 2010 continues, but that it is considerably more expensive to export containerized goods than goods handled as break-bulk. This is because containers for export can only be obtained from a shipping line and their services are more expensive and quite possibly of better and of higher quality - than what can be obtained by other service providers. Section 3 reports on procedures, and times experienced on the Tema-Bamako corridor in This is of interest to users in its own right and also provides a bench mark against which to evaluate future developments and trends. Section 4 compares transport and s in West Africa (from Tema port to Ouagdougou) with for a similar situation in North America (from Newark port to Chicago). We first made this comparison in the 2010 Tema-Ouaga report and found then that transport in West Africa was about 5 times more expensive (for imports) and took 3-4 times longer, with much uncertainty. As we repeated the comparison in 2012 we realized that the 2010 data needed revision and the revised comparison now shows that in 2010 transport in West Africa were more like 2.5 times more expensive and times and s 2-3 times longer, still with much uncertainty in both and times. In 2012 we found that West Africa has improved relative to North America to the extent that in West Africa are now only 1.6 times higher than in the US while the time relationship has remained more or less the same with West Africa still requiring 2-3 times longer time, with much uncertainty. Section 5 concludes with a summary of the issues and recommendations identified and formulated by the Trade Hub from 2008 to 2012 through its work on Road Governance and Corridor studies as well as its work on expediting trade and promoting the implementation of the ECOWAS Trade Liberalization Scheme. The section also includes a discussion on advocacy and how to achieve positive change, and concludes with a plea addressed to government agencies and all other stakeholders from the public and private sector for openness and transparency with data and information. Finally, the annexes contain detailed information on corridor procedures, and times in 2008 and 2012, statistics on traffic from ports and shippers councils, and much other relevant information that would have clogged up the text. 8

9 INTRODUCTION Road transport is easily the most important form of transportation in West Africa accounting for between 80 to 90% of passenger and freight transport in the sub-region 2. Road transport in West Africa is characterized by high coupled with long s and much uncertainty due to complex and opaque procedures in ports, at border crossings, and at inland terminals where goods is cleared for consumption. This result in very low level of inter- and intraregional trade, discourage investments, limit the ability of West African companies to compete in world markets, and increase unnecessarily the cost of goods to West African consumers. Whereas it is easy to see that there are problems, solutions can be difficult to come by because of the complex nature of many of the issues, which usually involve numerous stakeholders with conflicting interests, and because a general lack of relevant, reliable and timely information related to the issues to be tackled makes it difficult to design effective advocacy and design appropriate rules and regulations. Figure 1: Map of the Lomé-Ouaga and Tema-Ouaga- Bamako Corridors To address the concern of lack of information, the Trade Hub has conducted a series of studies on transit corridors documenting transport and logistics and procedures as well as time and s for each corridor. Research for the Trade Hub s first transport cost study was conducted between June-September 2008 on the Tema-Ouagadougou corridor. The study, published in 2010, showed that transport and logistics on the corridor is characterized by high, long s and much uncertainty both in regard to and time. The study also found that the most important actions that would reduce transport and logistics, transit times, s and uncertainty on the Tema-Ouagadougou transport corridor include creating a single market in the ECOWAS region, deregulating the West African trucking market, simplifying, harmonizing and automating customs procedures, promoting the use of containers for all transit cargo and fighting corruption. In all, the report suggested 23 recommendations which if implemented, could result in a reduction of 46% of the transport and 2 Assessing Regional Integration in Africa IV: Enhancing Inter-African Trade, United Nations Economic Commission for Africa,

10 logistics encountered in West Africa for Burkinabè import and a reduction of 33% in the case of export. Subsequently, a study of the Lomé-Ouagadougou corridor was conducted between 2009 and 2010 and published in Findings from this report pointed to the fact that very few transport and logistics inefficiencies are corridor specific, but rather common to the region as a whole. Many of the recommendations made with respect to the Tema-Ouagadougou corridor also applied to the Lomé - Ouagadougou corridor such as the need for transport reform and modernizing customs procedures. A few corridor specific inefficiencies included the use of convoys for Transit cargo from Lomé port to the Togo/Burkina border (this has since been abolished), and the strict application of a bilateral cargo sharing agreement on transit traffic between Togo and Burkina. This report on the Tema-Ouaga-Bamako corridors documents changes and trends in, s and procedures on the Tema-Ouaga corridor from 2008 to 2012, and establishes a benchmark for, s and procedures on the Ouaga-Bamako sub-corridor. The report also summarizes the recommendations for reducing barriers to trade in West Africa that have resulted from the Trade Hub transport cost and procedure studies, from workshops and roadshows conducted by the UEMOA/Trade Hub Road Governance initiative also known as l Observatoire des pratiques anormales (OPA), and from the work of the Trade Hub business environment team. Table 1: Trade Hub corridor reports data collection & publishing years Corridor report Data collected Published Tema-Ouadougou Lomé-Ouagadougou Tema-Ouagadougou-Bamako

11 1. TRENDS IN REGIONAL TRAFFIC FLOWS 1.1. TRAFFIC THROUGH WEST AFRICAN PORTS The main ports in West Africa other than Nigeria are from east to West: Cotonou, Lomé, Tema, Abidjan and Dakar. These ports are also the primary gateways for the landlocked countries of Niger, Burkina Faso and Mali. Figure 2: Map of West African ports According to port statistics, the total traffic handled by these ports amounted to 60.3 million tonnes in 2012, up only Source: African Development Report 2010 (AfDB) by 12% from 53.8 million tonnes in The most important port of the five in terms of traffic is Abidjan with almost a third of the total at 21.7 million tonnes in Dakar and Tema come second and third with very similar traffic levels of 11.9 and 11.5 million tonnes respectively. Cotonou and Lomé also have very similar traffic levels at 7.8 and 7.4 million tonnes respectively. Imports and exports in West Africa are very unbalanced with exports representing on average 27% of imports and actually fell by 8% during the period. Abidjan dominates exports from West Africa with an average of 61% of that traffic while in all other ports, export represents on average less than 20% of total traffic. Figure 3: West African port traffic The situation is nuanced somewhat when the smaller ports of Takoradi in Ghana and 25,000 San Pedro in Cote d Ivoire are included as both of these ports are primarily for 20,000 export. Takoradi in 2011 handled 4.9 million tonnes of cargo of which 57% was 15,000 Cotonou Lome export while San Pedro handled 1.2 Tema million tonnes in 2010 of which 76% was 10,000 Abidjan export. Traffic through Cotonou, Lomé and Abidjan ports remained fairly stagnant between 2008 and 2012 with growth rates between 5% and 7% while Dakar port did better with an increase of 19% while 5,000 - Source: Ports Dakar 11

12 traffic through Tema port grew the most by an impressive 32%. The five ports differ considerably in the relative importance of transit traffic. For example, for the port of Cotonou and Lomé, transit represents on average 50% and 35% of total traffic respectively. For Tema and Abidjan, transit is of much less important representing only about 5% of total traffic while Dakar is somewhere in between with transit representing on average 11% of total traffic. The ports have also seen their relative importance of transit traffic change over the period. Tema for example has seen its transit traffic fall by 35%, while Cotonou transit traffic has remained stable and Lomé has seen its transit traffic grow by some 43%. The real winners during the period are Abidjan and Dakar which both have seen their transit traffic grow by about 125% SAHELIAN TRANSIT TRAFFIC For the ports of Tema, Abidjan and Dakar, transit traffic consist from 90% to 100% of traffic destined to or coming from the Sahelian land-locked countries of Niger, Burkina Faso and Mali. Cotonou is a gateway also for Nigeria and thus Sahelian transit traffic represents only 80% of total traffic. However, in the case of Lomé port, only about 50% of transit traffic goes to the land-locked countries while the other half is mostly clinker for Ghana. Figure 4: Sahelian transit traffic 3,500 3,000 2,500 2,000 1,500 1, Cotonou Lome Tema Abidjan Dakar Source: Ports According to data from Shippers Councils, the landlocked countries of Niger, Burkina Faso and Mali registered international traffic of about 8.8 million tonnes in Based on a study of the Dakar- Bamako corridor 3 we estimate that bilateral traffic from neighboring countries approximately equals transit traffic in volumes. Total transit traffic has grown by about 25% over the period 2008 to 2011 with traffic to Niger having remained stagnant while Burkina Faso and Mali having seen a growth of 32% and 12% respectively. According to the data we have received, Mali alone represents about 50% of total transit traffic. 3 Dakar-Bamako Corridor Cost of Transport Analysis, Prepared for USAID Senegal by Booz Allen Hamilton (2010) 12

13 The imbalance between transit import and export is is even more pronounced than the imbalance between port total import and export foro the regiona as a whole with Sahelian transit export being only between 5% and 7% of Sahelian total between 2008 and TRAFFIC THROUGH TEMA PORT The port of Tema handles approximately 60% of Ghana s import/export traffic and is an important gateway to the landlocked countries of Burkina Faso, Mali and Niger. The remaining Ghanaian traffic goes through the port of Takoradi which handles mainly export. Figure 5: Tema port throughput (1,000 tonnes) 14,000 12,000 10,000 Total cargo handled by the port of Tema reached 11.5 million tonnes in 2012, up 32% from the 8.7 million tonnes handled in On average, Ghana imports constitute about 80%, Ghana exports 15 %, and transit cargo, import and export together, about 5% of total port throughput. Containerized Traffic 8,000 6,000 4,000 2, Transhipment Transit - exp Exports Transit - imp Import During the same period, Source: Tema Port containerized cargo grew by about 48% in terms of numbers of containers handled (TEU). The size of the average container vessel also increased so that while the number of container vessel calls decreased over the period, individual container vessels stayed longer at berth. 13

14 Figure 6: Tema Port throughput (tonnes) versus time at anchor and berth (days) Figure 7: Tema Port Number of vessels versus total throughput (tonnes) 4 14,000, ,000, ,000, ,000, ,000, ,000, Total port throughput (MT) 8,000,000 6,000,000 4,000,000 2,000,000 Waiting time at Anchorage (days) Time at berth (days) ,000,000 6,000,000 4,000,000 2,000, Total port throughput (MT) Number of vessel calls Source: Meridian Port Services Tema transit traffic The Tema port started handling transit traffic only in the late nineties. However, due mainly to the political crisis in Cote d Ivoire, Tema transit traffic grew rapidly to reach around 885,000 tonnes in This traffic remained at around 850,000t per year until 2008 after which it declined to 509,000 tonnes in 2009, a level at which it has remained since. In 2012, Tema transit traffic was 530,000 tonnes. Figure 8: Tema port transit (import & export) traffic by country (1,000 tonnes) B. FASO MALI NIGER OTHERS Source: Tema Port The most important landlocked country using Tema port for is Burkina Faso with an average of 330,000 tonnes per year over the last ten years fluctuating between a high of 398,000 tonnes in 2007 and a low of 246,000 tonnes in In 2012 Burkinabè transit traffic at 370,000 tonnes represented 70% of total Tema transit traffic. 14

15 Other landlocked countries using Tema port are Mali and Niger. Mali transit traffic has declined steadily over the last 10 years from more than 400,000 tonnes in 2003 to around 45,000 tonnes in Transit traffic through Tema port to and from Niger has for the last 10 years fluctuated around 104,000 tonnes per year with a high of 151,000 tonnes in 2008 and a low of 46,000 tonnes in 2009 and reaching 52,000 tonnes in The declining transit cargo volumes through Tema port is partly the result of the resurgence of the Port of Abidjan as a strong competitor for transit traffic in the region thanks in part to the rail link between the port and Ouagadougou. However, stricter enforcement of axle load regulations in Ghana, since July 2009, compared to other West African countries, may also have played a role in this development. In the case of Mali for example, volumes through Tema decreased in 2009, even though total volume of cargo to Mali increased in that year. West African Ports competing with Tema Cotonou and Tema are not really competing for the same customers as on average 80% of Cotonou s transit traffic is with Niger. Dakar is even more specialized in having basically only one Sahelian customer namely Mali. Dakar traffic to Mali has grown by 151% between 2008 and Figure 9: Cotonou port transit traffic (1,000t) 3,000 2,500 2,000 Figure 10: Dakar port transit traffic (1,000t) 1,800 1,600 1,400 1,200 1,500 Niger Burkina Faso Mali 1, Niger Burkina Faso Mali 1,000 Nigeria 600 Other Source: Port autonome de Cotonou Source: Port autonome de Dakar 4 These numbers are based on port statistics. It should be noted that numbers from the Shippers Councils do not necessarily match those from the ports because different methods are used. 15

16 Lomé port on the other hand is a very strong competitor to Tema as it serves the same landlocked countries and handles about three times more transit volumes for those countries than Tema, or 1.36 million tonnes in Abidjan is also a serious competitor for Tema traffic to and from Burkina Faso and Mali with 1,38 million tonnes of transit traffic in 2012, almost the same amount of transit traffic for the Sahel countries as that handled by Lomé. Figure 11: Lomé port transit traffic (1,000t) 1, Figure 12: Abidjan port transit traffic (1,000t) Burkina Niger Mali Burkina Mali Source: Port autonome de Lomé Source: Port autonome d Abidjan As for Dakar, Mali is its most important customer with about 95% of all transit traffic and 15% of total traffic. Furthermore, this traffic has grown by no less than 150% from 2008 to The remaining Dakar transit traffic goes to neighboring coastal countries such as Mauritania, Gambia and Guinea Bissau 1.4. BURKINA INTERNATIONAL TRAFFIC As mentioned above, Burkina transit traffic is very imbalanced with international export amounting to only about 10% of total traffic over the last five years as shown in table 2 below: Table 2: Burkinabé traffic (1,000t) Increase Burkina total 1,821 2,373 2,615 3,183 2,400 32% Burkina total imp. 1,641 2,119 2,334 2,893 2,183 33% Burkina total export % Export as % of total 10% 11% 11% 9% 9% Source: Burkina Shippers Council 16

17 Tema is one of four ports competing for Burkinabè imports (Lomé, Tema, Abidjan and Dakar). According to CBC data, most of Burkinabè import comes through the ports of Lomé and Abidjan with 658,000 and 580,000 tonnes respectively in 2012, followed by Cotonou and Tema almost neck and neck for Burkinabè import cargo with 357,000 and 370,000 tonnes respectively. Tema s share of Burkinabè export cargo has declined drastically over the past several years, with the majority Burkinabè export going through Lomé during the years 2003 to 2007 and from 2008 through Abidjan, except for 2011 when Cote d Ivoire was suffering from a sever political crisis. See Figures 13 and 14 below. Figure 13: Burkina overseas import (1,000t) 1,400 Figure 14: Burkina overseas export (1,000t) 250 1,200 1, COTON 150 LOME ABIDJA 100 TEMA TAKOR 50 COTONOU LOME ABIDJAN TEMA MALI INTERNATIONAL TRAFFIC Statistics from the Malian Shippers Council confirms that the majority of Malian cargo transits through the port of Senegal while the contribution of Tema has decreased steadily over time for imports and is now virtually non-existent for exports. The figures below show the statistics from for Malian import and export: 17

18 Figure 15: Mali overseas import (1,000t) 2,500 2,000 1,500 1, Cotonou Lome Tema Abidjan Conakry Dakar Noukchott Figure 16: Mali overseas export (1,000t) Cotonou Lome Tema Abidjan Conakry Dakar Nouakchott Source: Conseil Malien de Chargeurs Abidjan and Dakar have over the years been the preferred ports for Malian imports. Proximity and the availability of rail from Dakar contribute to the high use of the Dakar port. Cote d Ivoire also performs consistently, an exception being in 2008 at the height of a political crisis in that country. Alternative routes form Tema to Bamako One important reason for the uncompetitive nature of the Tema-Bamako corridor is its length. It has been estimated that developing the road through Wa, Hamile (Ghana border with Burkina Faso) via Bobo Dioulasso to Bamako would reduce the distance to Bamako by some 150 kilometers which will make the Tema-Bamako corridor more competitive. An even shorter route suggested by distancesfrom.com is through Bondoukou and Ferkessedougou in Cote d Ivoire would shorten the trip by almost 300 km. However the existing road via Hamile was in poor condition at the time of writing this report and we do not know the condition of the route through Cote d ivoire. Figure 17: Alternative routes Tema-Bamako Source: 18

19 2. TRENDS ON THE TEMA OUAGA CORRIDOR TRENDS IN COSTS, DELAYS & PROCEDURES ON THE TEMA-OUAGA CORRIDOR The Tema-Ouagadougou transport and logistics cost study published in 2010 had its genesis in 2005 when USAID was asked by UEMOA to support an Observatory to identify Bad Practices 5 (l Observatoire des pratiques anormales - OPA). USAID accepted the request and gave the Trade Hub the mandate to implement the program. The Trade Hub thus became involved in a joint ECOWAS and UEMOA initiative to reduce the number of fixed checkpoints on transit corridors in West Africa and eliminate the bribes and s incurred by the drivers as a result of these checkpoints. The Road Governance program aims to reduce the number of fixed checkpoints along the transport corridors in West Africa and the s and corruption they entail and which negatively affect West Africa s competitiveness in world markets and unnecessarily increases cost to consumers at home. UEMOA and the Trade Hub hoped that eliminating road blocks would resolve transport problems in West Africa. However, the work raised the question as to whether hurdles other than road blocks also significantly impact the efficiency of transport in West Africa. To answer this question, the Trade Hub initiated, in mid-2008, a study of the Tema-Ouagadougou corridor documenting all procedures, and s traders experience while importing to, or exporting from, Burkina Faso through the Ghanaian port of Tema. For import that meant procedures, and s from the moment a vessel arrive at anchor in the Port of Tema until the goods is cleared for consumption in Ouagadougou. For export it meant procedures, and s from the moment the goods is presented to customs for export clearance in Ouagadougou until it is loaded on a vessel in Tema port. The Trade Hub collected official fees and tariffs for various transactions and confirmed, through a series of interviews and focus group sessions, stakeholders perception of average values for formal, such as official fees and legitimate charges, and of informal, i.e. bribes and illicit facilitation payments, as well as the time and s taken for the various procedures. The team collected data on each of these cost categories for different import and export commodities and handling modes, selecting the most representative responses and standardizing the units of analysis to Twenty-foot Equivalent Unit containers (TEU) and metric tonnes (t). It should be noted that at each node in the transport chain goods is subject to both processing time and dwell time. Processing time is the time it takes to complete a procedure, which almost always involves involuntary s of various kinds. Dwell time is the total time the goods spends at the node and include voluntary s. For example, some importers may choose to keep their goods in the port because storage there is cheaper than elsewhere. Processing time is a measure of how fast goods can move through the transport and logistics chain whereas dwell time is the time the goods actually remains in a place such as a port, border crossing or inland terminal, including voluntary s. Processing time and dwell time can differ quite radically. Processing time is important for measuring improvements in procedures and handling methods while dwell time is important to evaluate congestion in port, terminals and at border crossings. The Trade Hub studies report on processing times and do not include dwell time. 5 ECOWAS Decision A/DEC/13/01/03 19

20 The study found that s and bribes at road barriers - lthough a serious and highly visible cancer on society - are a small part of the total bribes and s suffered by traders and transporters on the Tema Ouagadougou corridor. For example, bribes paid by drivers at road barriers amounted to less than 15% of the total amount of bribes incurred by traders, either directly or indirectly, when importing goods to Burkina Faso through the port of Tema. The study also showed that issues such as inappropriate or poorly implemented regulations and hurdles of many kinds in ports, at border crossings and at the inland terminals have a greater impact than the issue of checkpoints on the efficiency of West Africa s international and regional trade and its ability to compete in world markets. In 2012, and procedures on the Tema-Ouaga corridor were updated using, with few exceptions, the same methodology as the one used in the first Tema-Ouagadougou Corridor study. The purpose being to document the current situation and record changes in, procedures and cargo processing times and s that had occurred during the period. The one major change in methodology we did introduce was in regard to time and s for the road transport leg. In 2008 these numbers were arrived at through stakeholder interviews. In 2012 we decided to use the data provided directly by truck drivers through the Road Governance initiative for both the 2008 and the 2012 scenarios. Thus in the following tables the standard time for the trucking leg is the average total travel time reported by drivers while s is defined as the standard deviation of the travel time distribution. We believe travel times reported by drivers to be more accurate than perception data from stakeholders although in the future we hope to verify this with GPS data from transporters. For more information on this see Annex F. In order to standardize the scenarios for future trend analysis, and to correct some definitions and a few errors that we found in the 2010 Tema-Ouaga corridor report, we revised the original 2008 and s data. For example in the original report we considered 8 different case studies for import and 8 for export with of different combinations of products, weights and values for each scenario. In the current study we are considering only 2 scenarios for import and 2 for export namely: - Import: A cargo of cooking oil with a weight of 22 tonnes and value of USD 22,000 transported (a) in a container door-to-door or (b) transported as breakbulk to and from Burkina; and - Export: A cargo of shea nuts with a weight of 17 tonnes and a value USD 8,500 transported (a) in a container door-to-door or (b) transported as breakbulk to Tema where it is stuffed into a container for onward transport to its ultimate destination. This required re-calculating the original numbers (collected in 2008). These revisions are explained in detail in Annex E IMPORTS: TEMA-OUAGA CORRIDOR The performance of the Tema-Ouagadougou corridor in USD with 2008 (revised) and 2012 data is summarized in the tables below for the scenarios explained above: 20

21 Table 3: Import One 20 container (TEU), door-to-door to Ouagadougou 2008 (revised) 2012 Total Standard & Total Standard & ( total time ( total time in (including in (including PORT bracket) s) bracket) s) (USD) (days) (USD) (days) Anchorage and Berthing n/a n/a Port, transit yard, customs and forwarding 468 (44) (19) ROAD TRANSPORT LEG Sub-total Port 468 (44) (19) Road Transport Tema-Ouaga 2,664 (33) ,622 (14) Border Crossing at Paga 0 (24) (19) Border Crossing at Dakola 128 (17) (17) OUAGARINTER Sub-total Road leg 2,792 (74) ,749 (50) OUAGARINTER cargo clearance procedures 1,184 (149) (56) Sub-total Ouagarinter 1,184 (149) (56) GRAND TOTAL Import container 4,444 (267) ,058 (125) Import change: Container % (-53%) -15 % / -4% Changes in - imports The good news is that in dollar terms, the total cost of moving a truckload of containerized cargo from a vessel in Tema port through the clearance procedure in the Ouagarinter inland terminal in Ouagadougou has gone down by 9% from USD 4,444 to USD 4,058. Most of the reduction has occurred in Ouagarinter with smaller reductions in the port and on the road leg. This is contrasts with the fact that the of moving goods from the Port of Newark to Chicago, as reported by Maersk, has increased by almost 50% from 2010 to See Section 5 for more detail. However, as shown in Annex A, transport price indexes in both the US and in Europe show transport prices to have been largely stable during the years While total have been reduced by 9% from 2008 to 2012, reported bribes, or informal payments, were down by more than 50%! Bribes are a relatively small part of the total transport and logistics : 6.0% of the 2008 (revised) total and 3.1% of 2012 total, but avoiding or negotiating informal payments in frustrating, takes time and introduces elements of uncertainty in time and. Bribes and informal facilitation payments are therefore still an important barrier to both trade and investments. 21

22 Regarding informal payments it should be noted that trucks carrying perishable goods or trucks that are not in good order and operated by drivers and carrying goods that are inadequately or incorrectly documented are subject to much more harassment and higher bribes at checkpoints and borders than the transit trucks considered in the Trade Hub corridor studies. This is documented in the quarterly Road Governance reports which have a section on the road governance situation in regard to selected regional agricultural products on a number of regional corridors in West Africa 6. Changes in time and s - imports While total and bribes have gone down by 9% and 53% respectively, the total time, including s, for moving goods from the arrival of a vessel at anchor in Tema port to clearance for consumption in Ouagadougou has been reduced by only 4 %. This may not seem much of a reduction but it is actually quite impressive because this overall improvement has happened in spite of increased congestion and s in the port of Tema. During the period, overall tonnage throughput in Tema port grew by 32% while the number of containers handled increased by 48% without any expansion of the port infrastructure. At the same time the average container vessel that call in Tema port has grown in size and therefore stays longer at berth for loading and unloading, adding to the total time. The result of this is that the time vessels wait at anchor and at berths has increased by 115% from 2.6 days to 5.6 days. Improvements elsewhere along the corridor have however compensated for the increased s at anchor and at berth. For example, processing and travel time has improved by 15%. The major improvements that have occurred include: a) In Tema port and terminals: improved clearance processes have reduced processing time and s by more than 30% from 4 to 2.7 days; b) In Ouagarinter: Improved procedures have reduced clearance time by 45% from 6 to 3.3 days Containers versus breakbulk - Imports Moving containerized cargo to Ouagadougou through the port of Tema is cheaper than transporting break-bulk cargo by about 5%. This advantage remained steady between 2008 and The savings related to using containers are due to several factors including: - It takes an average of about 9 hours to move a container into the stripping area, which is avoided if the cargo stays in the container - The cargo stripping operation is avoided thus saving the related formal and informal. - Time and cost is saved in waiting for escorts at Dakola at the Burkina border as customs escorts are no longer required from Dakola to Ouagarinter (since 2009). The cost and time involved in transporting goods as break-bulk from Tema to Ouagarinter, the international truck terminal in Ouagadougou, are summarized in table 4 below: 6 See quarterly reports from the UEMAO/Trade Hub Road Governance initiative l Observatoire des pratiques anormales (OPA) at 22

23 - Table 4: Import One 20 container (TEU), break-bulk to Ouagadougou Total Standard & Total Standard & ( total time ( total time in (including in (including bracket) s) bracket) s) PORT (USD) (days) (USD) (days) Anchorage and Berthing n/a n/a Port, transit yard, customs and forwarding 549 (59) (25) ROAD TRANSPORT LEG Sub-total Port 549 (59) (25) Road Transport Tema -Ouaga 2,880 (33) ,040 (14) Border Crossing at Paga 0 (24) (19) Border Crossing at Dakola 128 (17) (17) OUAGARINTER Sub-total Road leg 3,008 (74) ,177 (50) OUAGARINTER cargo clearance procedures 1,184 (149) (56) Sub-total Ouagarinter 1,184 (149) (56) Grand TOTAL Import breakbulk 4,741 (282) ,281 (131) Import change: Breakbulk % (-54%) -15% / 6% Grand TOTAL Container 4,444 (267) ,058 (125) Comparison: Container versus breakbulk -6% (-5%) -8% / -6% -5% (-5%) -8% / -4% However, the high deposit required by shipping lines and the short time available to return the empty container before incurring demurrage still discourage the general use of containers. IN the 2012 report on the Lomé -Ouagadougou corridor we found that using containers were more expensive than moving goods as break-bulk by about 12% on that corridor. We speculate that this may be related to the stricter implementation of axle load regulations in Ghana. In the 2010 Tema-Ouaga report we estimated that about 20% - 30% of transit import and export traffic with Burkina remained containerized all the way (door-to-door). We do not have precise numbers but stakeholders estimate that this is still approximately the case in EXPORTS: TEMA-OUAGA CORRIDOR. The and processing times for containerized export cargo for the case of 17 tonnes of Shea nuts with a value of USD 8,500 are summarized in Table 5 below and compared with the and time of exporting: 23

24 Table 5: Export One 20 container (TEU), door-to-door from Ouagadougou Total Standard & Total Standard & ( total time ( total time in (including in (including OUAGARINTER bracket) s) bracket) s) (USD) (days) (USD) (days) OUAGARINTER cargo clearance procedures 171 (12) (0) ROAD TRANSPORT LEG Sub-total Ouagarinter 171 (12) (0) Road Transport Ouaga-Tema 1,920 (33) ,520 (11) Border Crossing at Dakola 45 (9) (8) 0.3 Border Crossing at Paga 359 (0) (0) TEMA Sub-total Road leg 2,324 (42) ,908 (19) TEMA cargo clearance procedures 313 (11) (31) Sub-total TEMA 313 (11) (31) Grand TOTAL Export container 2,808 (65) ,451 (50) Export change: Container % (-23%) +6% /-14% Grand TOTAL Import container 4,444 (267) ,058 (125) Import change: Container % (-53%) -15 % / 11% Comparison: Export versus import -37% (-76%) -69%/-69% -40% (-60%) -61%/-72% Changes in - Exports The first Trade Hub study of the Tema-Ouaga corridor found that exporting cost about 40% less and took about 70% less time than importing. This relationship between importing and exporting has remained about the same over the period. Exporting less because transporters usually include an empty return trip in the price they quote for imports and therefore can offer lower prices for the export leg to compete for the little export traffic there is available. For example total export from Burkina Faso as a whole has represented less than 15% of total transit traffic over the last 10 years, and on the Tema-Ouaga corridor export transit traffic represents even less at about 2% of total traffic. Furthermore, export is subject to few if any duties and taxes and therefore attracts less attention by officials and is subject to fewer controls thereby speeding up clearance processes and reducing the demand for bribes. Total for exporting from Burkina Faso through Tema port has gone down by 13% in dollar terms. That follows 24

25 fairly closely the 9% reduction in total recorded for import. /bribes related to exports have gone down a respectable 23% compared to the impressive reduction of 53% for bribes paid on imports. However one should keep in mind that informal payments on exports were much lower than for imports to begin with by 76% in 2008 and by 60% in Changes in time and s - Exports The overall time required to export a container from Ouagarinter through Tema port was reduced by 14% or almost one day from 5.7 to 4.9 days between 2008 and As for standard processing time, improvements were recorded in Tema port while Ouagarinter remained the same in 2008 and 2012 at 0.3 days. However travel time increased by 0.6 days for reasons we do not know, leaving overall processing time with a slight increase of 6% from 2008 to Containers versus breakbulk - Exports Exporting goods from Burkina Faso by either container or breakbulk is presented in table 6 below: Table 6: Export One 20 container (TEU), break-bulk from Ouagadougou OUAGARINTER Total ( in bracket) (USD) Standard & total time (including s) (days) Total ( in bracket) (USD) Standard & total time (including s) (days) OUAGARINTER cargo clearance procedures 171 (12) (0) ROAD TRANSPORT LEG Sub-total Ouagarinter 171 (12) (0) Road Transport Ouaga-Tema 673 (33) (11) Border Crossing at Dakola 45 (9) (8) 0.3 Border Crossing at Paga 353 (0) (0) TEMA Sub-total Road leg 1,071 (42) (19) TEMA cargo clearance procedures 404 (22) (37) Sub-total Tema 404 (22) (37) Grand TOTAL Export breakbulk 1,646 (76) ,549 (56) Export change: Breakbulk % (-26%) +6% / -33% Grand TOTAL Container export 2,808 (65) ,451 (50) Export change : Container % (-23%) +6% / -14% Comparison: Container versus breakbulk +71% (-14%) -3% / -2% +58% (-11%) -3% / -6% 25

26 Exporting cargo by container from Ouagarinter through the port of Tema is slightly faster by some 3% but about almost 60% more expensive than transporting the goods as breakbulk even though bribes are lower by some 10%. This situation hasn t changed much from 2008 to The reason for this is that container export can only be done through a shipping line and thus requires its services which are more expensive and probably better than what is available elsewhere 2.4. REFORMS & CHANGES IN REGULATIONS & PROCEDURES 2008 TO 2012 The Situation in 2008 In the 2010 Tema-Ouagadougou corridor study (with data from 2008) we identified many issues opportunities and concluded that the most important actions that would reduce transport and logistics, transit times, s and uncertainty on the Tema-Ouagadougou transport corridor include the following (quoted verbatim from the 2010 report): Creating a single market in the ECOWAS region This would solve many problems as it would remove borders, and thus eliminate the landlocked status of Burkina Faso and other Sahelian countries for transport and trade. Deregulating the West African trucking market This would result in more competition based on price and quality of service and thus lead to a more professional trucking industry with newer and better maintained trucks, making the Tema- Ouagadougou road-transit link faster and less costly. Fighting corruption This may be easier said than done, but is essential for reducing, transit times and uncertainties and also for building faith in the rule of law and thus encourage investments. Improving the capacity and efficiency of Tema s container terminal Port operating times and s depend on port-berth and terminal efficiency, as well as the complexity and efficiency of customs cargo-clearance procedures. In Tema port, the study identified the need to expand berthing and terminal capacity. Also, the entire port community has to work together to make the sum of its parts a more efficient institution which will make Tema port more attractive as a gateway for landlocked countries. Further automating and streamlining Ghanaian and Burkinabé customs procedures This would speed up processes and reduce the need for direct contact between customs agents and forwarders/importers which should result in fewer opportunities to offer/demand bribes. 26

27 Promoting the use of containers for all transit cargo on the Tema-Ouagadougou corridor This would reduce the frequency of container stripping, and thus improve speed and security from the perspective of both customs and the cargo owners. It would also reduce the occurrence of heavily overloaded trucks and it would make it more difficult for dishonest traders or transporters to engage in fraudulent practices. Aligning the Ghanaian and Burkinabé customs working hours to better suit trucking efficiency This would reduce s at the Ghana-Burkina Faso border crossing. Extending the GPS tracking system to the Dakola-Ouagadougou, Ouagadougou-Dakola and Paga- Tema legs This would eliminate the need for the costly and time-consuming customs-escort systems. Streamlining the cumbersome customs-inspection regime in Ouagadougou This would reduce the current long s, heavy bribes and truck demurrage. Eliminating the Ghanaian transit fee of USD 200 per consignment for southbound transit cargo This would remove a tax on transit cargo that is contrary to international conventions related to transit traffic, illegal under ECOWAS conventions and resolutions, unfair to Burkina Faso exporters, and detrimental to the competitiveness of the corridor. Improving the trust between the public and private sector Transporters and traders are known to engage in fraudulent practices in order to avoid duties and taxes, or to shift to the public sector by overloading trucks, for example. In response, governments institute complex, time-consuming and costly inspection procedures which offer plentiful opportunities to offer, or demand, bribes to speed things up or to encourage official agents not to enforce rules and regulations. Better trust between the private and public sectors may be achieved by introducing and promoting the World Customs Organization concept of Authorized Economic Operator (AEO) as well as promoting legal trucking and trading, and offer AEO operators preferential treatment. Developments since 2008 Most of the issues identified in the 2010 report with 2008 data - are still valid today, but sufficient changes have happened for total import and time having been reduced by 9% and 4% respectively. The more important changes include Improvements to Tema port clearance processes Exemption of containerized cargo from the convoy system in Burkina Faso Improvements to Cotecna inspection procedures in Ouagarinter These improvements are discussed in greater detail below. 27

28 Tema Port Clearance Process Port standard processing times for both containerized cargo and break-bulk have improved considerably over the period, by 55% for containers, and 40% for break-bulk cargo. Interviews with stakeholders suggest that these improvements in clearance times can be attributed to improved coordination between agencies at the port and streamlining of port clearance processes. The reason that total s haven t gone down much is because of increased port congestion, caused by significant traffic growth, has introduced new s. The situation can chance quickly however as illustrated by the fact that in 2012, a lack of tracking devices has at times obliged trucks to wait for several days in the transit yard and resulted in payments of illicit fees in order to secure a device more quickly. Tracking devices are issued to each transit truck to allow customs to follow the movement of a transit truck on its way to the border at all time so as to prevent diversion of the cargo to the local Ghanaian market. Improved efficiency in Cotecna inspection procedures at Ouagarinter The reduction in in Ouagainter is due to more efficient procedures which have led to a significant improvement in cargo processing time which again has led to the elimination of truck demurrage of approximately 360 USD per truck which was a common occurrence in At the Terminaux routiers à conteneurs du Burkina (TRCB) 7 yard within Ouagarinter, all containers are now required to be offloaded within the terminal upon arrival. This procedure was introduced to enable a truck to immediately load another container (either full or empty) and return to its origin, thus allowing a fast turnaround of the truck and a programmed flow of containers. Unfortunately it doesn t work like that. The truck that brought the container usually waits at Ouagarinter to deliver the container to the final destination and subsequently bring it back to the port so as to avoid the container demurrage charges. It has therefore been suggested that TRCB should not insist on containers being off-loaded and customs should do the clearance of the goods while the container stays on the truck unless the container has to be de-stuffed for the purpose of inspection, thus saving time and handling for the importer and the transporter. 7 TRCB is a new handling company mainly owned by CCBF (40%), Bolloré Africa Logistics (35%) and three shipping lines, Maersk, MSC and GETMA (15%). TRCB manages two terminals, one at Ouagarinter and the other at Bobo Dioulasso dry port. 28

29 Export Issues Export issues have not changed much during the period. Ghanaian customs still levies a formal transit fee of USD 200, paid in Ghana cedis, per consignment 8. A major source of at Paga is caused by the processing of the temporary vehicle import payment 9 called the laissez passer C59A form. After the police have entered the truck details online, these need to be approved by their counterparts in Accra before the laissez passer is issued. System failure or lack of a quick response from Accra results in this process usually lasting up to 5 hours. In Ghana, trucks should in principle travel in convoys because there is no GPS tracking on the Paga- Tema leg of the journey 10 but in reality no convoys are organized nowadays. Documents however are still transported by an escort for which the transporter is charged a fee to cover the agents travel and living expenses. 8 This is a charge per single declaration regardless of the number of containers or trucks it covers. 9 This procedure allows foreign trucks to enter Ghana. A similar process exists in other countries and is consistent with ECOWAS treaties. The laissez passer currently about GHS 76 per truck and is only valid for a period of one month. If the permit needs to be renewed this GHS 40 per month (with a receipt given is for only GHS 16!). Trucks that overstay their time limit before renewal are in addition subject to a penalty of 5 GHS per day. This compares unfavorably with corresponding temporary vehicle import payment in other countries. The charge for this service in Burkina is 2,000 FCFA, and 5,000 FCFA in Cote d Ivoire. 10 Custom administrations in West Africa usually hold the position that transit trucks must to travel in escorted convoys in order to avoid diversion of the goods. However, customs do not insist on convoys and escorts if the trucks can be tracked by GPS. 29

30 3. TEMA BAMAKO CORRIDOR 3.1 INTRODUCTION In 2011, the Trade Hub team collected data on the Tema-Bamako corridor to establish a bench mark against which to document future developments and trends in, time, s and procedures. In addition we attempted to identify the main areas of inefficiencies along the corridor and to make recommendations for cost reductions and other improvements on the corridor. Unfortunately the political unrest in Mali, which started with the military coup on March 21, 2012 and which is still ongoing, has prevented the team from going to Mali and work directly with stakeholders since then. Nonetheless, we found that the Tema-Bamako corridor is characterized by high, long transit times, s and uncertainty just as was the case with the Tema-Ouagadougou and Lomé- Ouagadougou corridors. Bamako can be served by no less than seven ports although Dakar handled most of Mali s traffic in both 2008 and 2012, with 45% and 57 % of total respectively. This is not surprising as Bamako is connected with Dakar by both road and rail. Abidjan is closer and the second most important port for Mali. However Abidjan saw Mali traffic decline both in absolute and relative terms during the period from 35% to 27% of total. Conakry is the closest port but handled only 2% of Mali traffic in 2012, presumably because the port is underdeveloped and the road in poor condition. Tema and Lomé ports are both about 1,800 km from Bamako but whereas Malian traffic through Tema fell from 7% to 4%, Lomé port saw its share of Malian traffic grow from 6% to 9%, possibly because of the stricter application of axle load regulations in Ghana. Table 7: Distance to Bamako from the sea & traffic through various ports : Port/Origin Distance to Bamako (km) Total Mali traffic 2008 (1,000t) Total Mali traffic 2012 (tonnes) Increase Cotonou 1, % Lomé 1, % Tema 1, % Abidjan 1,111 1,234 1,098-11% Conakry % Dakar 1,341 1,590 2,333 47% Nouakchott 1, % Burkina % Nigeria % Total 3,551 4,090 15% Source: CMC; and 30

31 3.2 IMPORTS: TEMA-BAMAKO CORRIDOR For cargo imported into Bamako via Tema, the and procedures in Tema are largely the same as for Burkina bound cargo. In Tema, the only difference is the intervention of Malian institutions acting instead of Burkinabè institutions. Malian institutions involved in the process are The Malian Road Transport Council (CMTR) and Les Entrepots Malien au Ghana (EMAGHA), managed by the Mali Shippers Council under the auspices of the Ministry of Equipment & Transport. As part of the port clearance process, CMTR issues two documents to transporters: the transport loading advice and the billet de chargement. The trucks have to pick up the transport loading advice, which is free of charge, before entering the port. Through this process CMTR registers the driver so that he can be traced an essential element of security. However as trucks are still able to enter the port without this document, a few drivers don t bother. The billet de chargement is checked by CMTR representatives at the Malian border and again at Segou or Sikasso depending on the route. Trucks found to be travelling without this document are subject to fines of up to XOF 20,000 but many truckers avoid the fines by paying bribes. CMTR publishes trucking tariffs as a guide to transporters but the rates are negotiated freely between truckers, forwarders and cargo owners. Stakeholders have however confirmed that the CMTR rates are close to actual rates so the CMTR trucking rates are used in this study. For the Tema-Bamako route we are looking at two scenarios for import and one for export: One 20 container loaded with 18 tonnes of textiles valued at USD 9,051 transported for two transport modes: a) one 20 container (TEU) transported door-to-door Table 8; and b) one 20 container (TEU) arriving by container and unloaded (stripped) in Tema and then transported to Ouagadougou as general cargo (breakbulk) Table 9. 31

32 Table 8: Import One 20 container (TEU), door-to-door to Bamako PORT Total ( in bracket) (USD) 2012 Standard & total time (including s) (days) Anchorage and Berthing n/a Port, transit yard, customs and forwarding 394(19) Sub-total Port 394 (19) ROAD TRANSPORT LEG Road Transport Tema-Bamako All 20 foot container cargo exceeding 19MT are charged as a 40 foot container 3,420 (74) 6.5 (should deduct days of s as no escort and stops in Ouaga/Bobo needed Border Crossings (Paga, Dakola, Faramana, Koury) 278 (78) Inland terminals (Ouagarinter, Bobo not included) n/a n/a Sub-total Road leg 3,707 (152) Faladie Faladie cargo clearance procedures 150 (57) Sub-total Faladie 150 (57) Grand TOTAL Import: Container 4,242 (228) foot containers in excess of 19 tonnes are charged as 40 foot containers, presumably because loading two such containers on a truck risks exceeding the allowed load. In the case of containerized cargo, considerable time is saved avoiding the convoy system as it is exempted from customs escorts in Burkina Faso. As such, trucks carrying sealed containers move directly from Dakola to either Faramana or Heremakono (Burkina borders with Mali). In so doing, they avoid time otherwise lost in waiting for convoys to be organized in Dakola, Ouagarinter and BoboInter, as well as overnight stays in Ouagarinter and BoboInter. As a result containers move days faster through Burkina Faso than break-bulk cargo. 32

33 Table 9: Import One 20 container (TEU), break-bulk to Bamako PORT Total ( in bracket) (USD) 2012 Standard time and s (days) Anchorage and Berthing n/a Port, transit yard, customs and forwarding 470 (19) Sub-total Port 470 (19) ROAD TRANSPORT LEG Road Transport Tema-Bamako 3,135 (74) 8.4 Border Crossings (Paga, Dakola, Faramana, Koury) 278 (78) Inland terminals (Ouagarinter, Bobo) 20 (4) (included in road transport) Sub-total Road leg 3,442 (156) Faladie Faladie cargo clearance procedures 150 (57) Sub-total Faladie 150 (57) Grand TOTAL Import: Breakbulk 4,053 (232) Grand total Import: Container 4,242 (228) Comparison: Container versus break-bulk +5% (-2%) -13% / -7% Contrary to the situation in Burkina Faso, containerized imports to Mali are slightly more expensive than break-bulk imports mainly due to the trucking price per container (container trucking fees typically include the return of the empty container to the port), in spite of the fact that break-bulk cargo experiences additional (stripping fees) and s (container positioning) in Tema port. Export from Bamako to Tema is done predominantly in break-bulk which can be arranged cheaper than in containers. In fact we have in fact no data on Malian export through Tema by containers. Table 10 below summarizes the cost and time involved in exporting goods in break-bulk through Tema. 33

34 Table 10: Export One 20 container (TEU), break-bulk from Bamako 2012 FALADIE Total ( in bracket) (USD) Standard time and (days) FALADIE cargo clearance procedures 38 (10) Sub-total Ouagarinter 38 (10) ROAD TRANSPORT LEG Road Transport Bamako-Tema 1,131 (52) Border Crossings (Koury, Faramana), Dakola,Paga) 578 (59) Inland Terminals (Bobo and Ouagainter) (included in total travel time) (included in total travel time) Sub-total Road leg 1,709 (111) TEMA TEMA cargo clearance procedures 396 (31) Sub-total TEMA 396 (31) Grand TOTAL Export: Breakbulk 2,143 (152) Grand TOTAL Import: Breakbulk 4,026 (232) Comparison: Export versus import - break-bulk -47%(-34%) -56%/ 66% As was the case on the Tema-Ouaga corridor, transport for export is about 50% cheaper than import and takes less than half the time. One should keep in mind however that volumes are very small. Mali s total export averaged less than 300,000 tonnes per year over the last 5 years and Tema s share of that was around 5% or close to 15,000 tonnes per year. 3.3 EXPORTS: TEMA BAMAKO CORRIDOR The analysis for import starts from the point when a vessel drops anchor outside Tema port and starts waiting for a berth to unload. For export the analysis starts from the moment goods are presented to Mali customs in the Faladie terminal in Bamako for export clearance until the goods is loaded on a vessel in Tema port. Imported goods destined for Mali arrive in Tema predominantly in containers - in 2010, only 5% of total cargo arrived in bulk vessels. The goods are unloaded from the vessel to the port, cleared through customs and then loaded onto trucks. Once loaded on a truck, customs, insurance agents, the port authority and national security agents check the truck and cargo for compliance with laws 34

35 and regulations and to ensure that all payments are cleared. Before leaving on its journey to Ouagadougou, GCNet equips the truck with a global positioning system (GPS) device to allow Ghana s Customs, Excise and Preventive Services (CEPS) to track the truck at all time in order to ensure that the goods is not illegally diverted into Ghana. The trip to from Tema to Bamako involves a number of stops at checkpoints within Ghana operated by police, customs and transport unions, among others, before the truck arrives at the Ghana-Burkina Faso border. At the border, police and customs officials on both sides inspect and process the shipment before continuing. Since May 2009, containerized cargo and certain specific commodities 11 are exempted from travelling in convoy and may proceed directly to the Burkina/Mali border. Trucks under escort proceed to Ouagarinter where they complete more formalities. At Ouagarinter, another convoy is formed and a new escort is assigned for the journey to the dry port in Bobo Dioulasso. Figure 18: Tema-Bamako routes via Ouagadougou The escort is again changed and the convoy continues to the Burkina/Mali border crossing. If cargo is destined for Bamako, the truck proceeds to Faladie, the international terminal in Bamako, where the importer clears the goods and pay customs duties before finally taking possession. If Bamako is not the final destination, customs clearance can be done at a number of major towns in Mali. From Bobo Dioulasso to Bamako drivers have 2 routes to choose between: The northern route goes through Faramana in Burkina and Kouri in Mali while the southern route goes through Koloko in Burkina and Heremakono in Mali. In 2010 approximately 70-80% of trucks used the northern Faramana/Kouri route for the reasons below: The possibility to load or offload cargo at Segou on the Niger River, especially if the final destination of the cargo is in the North of Mali. The presence of a weighbridge on the Heremakono route where the weighing is done per axle which means that if the truck's load is not well balanced, it can result in a fine even if the total load is in compliance. 11 Refrigerated cargo, vehicles under temporary importation, salt, cement, rice, medicines, personal effects, metallurgical cargo, fresh foods 35

36 Fuel consumption is higher when passing through Koloko/Heremakono because of the hilly nature of the route despite the slightly shorter distance. Clearance Procedures Ouagarinter After completing formalities at the Paga/Dakola border, trucks not carrying containers travel the 176 km to Ouagadougou in convoys with customs escort, a trip that takes approximately 3-5 hours. The escort agent from Dakola, hands over the truck documents to customs at Ougarinter, no forwarder intervention is needed. Once the escort arrives with the truck documents, the trucks again join a convoy organized once daily for the journey to Bobo Dioulasso. Clearance Procedures BoboInter The road from Ouagarinter to Bobo Dioulasso is about 353 kms and takes around 6-8 hours. It is mandatory that all trucks, except those carrying containers or goods otherwise exempted from the convoy requirement, pass through the dry port at Bobo. The main procedure at Bobo is the exchange of escort documents and the intervention by forwarders is not required. At Bobo truckers wait for their documents until the escort arrives with the documents. Sometimes the trucks are not accompanied by an escort, but the documents sent through one of the truck drivers. Drivers may leave as soon as their documents arrive and do not have to wait for departure of a convoy but there is still an escort who is in charge of transporting the documents and a formal charge of XOF 5,000 is paid for this service. Customs insists on an escort carrying the documents because of fears that traders/transporters may otherwise falsify the documents en route. Exemption of containerized cargo from convoy system in Burkina The Customs Escort Regime for transit cargo in Burkina Faso is governed by Arrete No /MEF/SG/DGD. According to this directive, customs escorts are mandatory for all cargo transiting Burkina by road until they exit national territory. Excluded cargo includes personal effects, diplomatic cargo, perishables and cargo under escort by other countries. In 2009, this arrete was amended to make additional exemptions from the customs escort systems. Exemptions now include containers, refrigerated trucks, vehicles and heavy engines, vehicles on temporary importation into the country, chemical products, salt, cement, rice and medicines. There is an estimated 48 hours of in Burkina Faso as a result of the escort system. A customs agent accompany a limited number of trucks (ten in Burkina Faso) in a tight convoy to ensure that none of the convoy trucks deviates from the prescribed route and that they all reach their intended destination. Customs agents in principle retain possession of the documents of all trucks under its care until they reach the next station where a new customs agent is assigned to take over possession of the documents. Documents are retained by Burkina customs until the point of exit by the truck from Burkina. The arête specifies escort fees from various destinations within Burkina. Escort fees are levied to cater for feeding and lodging for customs officers assigned to escort the convoys. This fee is paid only once for the whole trip until the cargo exits national borders. Convoys are not allowed to travel at night and as such, no convoy departs from a given location after 4:30 pm. 36

37 3.4 RECOMMENDATIONS: TEMA-BAMAKO CORRIDOR The recommendations emanating from the 2010 Tema-Ouaga and 2012 Lomé -Ouaga corridor studies are also valid on the Tema-Ouaga-Bamako conrridors. Below are a few additional recommendations that have not previously been formulated by the Trade Hub: Recommendation: border crossings The manual transfer of documents from Burkina to Mali customs causes the most. As both countries uses ASYCUDA, there should be the possibility of electronic transfer of cargo/truck details for more efficient operations, or Customs should allow the truck drivers to transport the documents in sealed envelopes. Trucks are scanned in Sikasso on the southern route to Bamako. If the scanning process determines that a container is suspicious it has to travel to Bamako in a convoy. Transporters thus incur extra s and complain that they are not compensated if they subsequently are found to have been compliant. It appears that the scanning operators use the threat of declaring goods suspicious to extract bribes. Corruption at the scanner at Sikasso raises the bribes paid on this route considerably, an issue that needs to be addressed. Recommendation: Faladie terminal operations The movement of trucks from the towns Seno and Nyamana to the Faladie terminal in Bamako is restricted to between 11am 3pm and from midnight to 6am. As there is no congestion between Nyamana et Senou to Faladie, it is recommended that traffic into Faladie be allowed at all times from these places. Recommendation: Multiple Road Fund Guarantee Payments ECOWAS countries should seriously consider adopting the international TIR system 12 in order to solve the issue of multiple national guarantee systems currently in place. Until that happens, authorities in Ghana, Burkina Faso and Mali should adopt the agreement among national guarantors to establish a common guarantee scheme for the three countries. A pre-requisite however is the interconnection of the customs systems which is still a work in progress. Background: The ECOWAS 1990 Interstate Road Transit Convention (ISRT) which supplements the 1982 ISRT regime specifies that a guarantee shall be provided by a financial institution which shall cover at least the sum of duties and taxes payable on the goods and any penalties that might be apply. In this way, each member country should be able to recover its losses in case goods are fraudulently diverted into local markets. The original intent was that a single guarantee should cover the transit voyage from origin to destination as is the case of the TIR system on which it was modeled. In practice, problems of trust and of divergent interests of different national guarantors mean that the guarantee provided by 12 See and 37

38 each guarantor covers only its national territory, ending at the border of the state where the declaration originates. At this point, a new declaration is prepared and a new guarantee obtained. This segmented system is costly and generates more paperwork and s than necessary. Recommendation: Multiple ISRT logbooks ECOWAS countries should agree on using a single ISRT logbook for an entire transit journey this would be achieved as part of the TIR package, if adopted, as discussed above Background: The ECOWAS 1982 ISRT convention stipulates that the transport of all transit goods should take place under the cover of an Inter State Road Transit Logbook from the point of departure in one country to the final destination in another country. However in practice, each country has a separate logbook system and does not recognize logbooks issued by other countries on the corridor. This was discussed in both the Tema-Ouaga study and Lomé -Ouaga study and the issue here is the same, only more pronounced since on the Tema- Bamako corridor, three countries and therefore three logbooks are involved. 38

39 4. WEST AFRICA VERSUS NORTH AMERICA ( ) Transport within West Africa is time consuming and expensive compared to the situation in developed countries. West Africa (WA) is handicapped by structural issues such as lack of economies of scale and a strong imbalance between import and export which is particularly pronounced in landlocked countries. However, the one advantage West Africa does have is low cost of manpower. In the 2010 Tema-Ouaga report, we made the observation that labor in the USA are about 25 times higher than in West Africa 13. Still it may not be realistic, in the short term at least, to expect West Africa to obtain and efficiency levels equal to those of Europe and North America (NA). Nonetheless, comparing the cost of moving a container from arrival in the port of Tema to release for consumption in Ouagadougou with the equivalent transport in the US provides a goal to strive for and a benchmark against which to measure progress. Thus, to put the West Africa transport and logistics (T&L) and times in perspective, the 2010 Tema-Ouaga report included a case study in which the door-to-door transport for a 20 container between Tema and Ouagadougou was compared with the transport and times for a 20 container transported from the port of Newark on the East Coast of the US to Chicago. Chicago being slightly further from the port of arrival, Newark than Ouagadougou is from Tema, namely 1,130 km versus 1,030 km. The conclusion was that for moving goods (imports) in West Africa were about 5 times higher and transit times 2-4 times longer and also much more unpredictable than in North America. For this study we decided to review and update the North America West Africa transport comparison for The data we used comes from the Maersk website and through consultations with Maersk we realized that the 2010 comparison hadn t always compared likes with likes. For example when establishing in North America we had neglected to add a number of port fees and charges that should have been included. Also, in the case of West Africa, we used the full cost of moving two containers, i.e. a full truckload, of textiles from Tema port to Ouagadougou, divided by 2 to get the lowest possible cost per TEU. In the current comparison the scenario of one 20 foot container being transported on its own is used in the analysis of both scenarios in order to be more consistent. The 2010 comparison also included fees and customs clearance time in Ouagarinter which has no equivalent in the Newark-Chicago scenario. Ouagarinter fees and clearance times have now been excluded in the current comparison as well as in the revised 2010 numbers. A detail review of the revisions to the 2010 comparison can be found in annex E.3 The updated comparisons are summarized in the graphs and table below: 13 Sources: - West African truckers unions (salary range for a truck driver: USD per month, i.e. USD 0.60/hour). - US Bureau of Labor (Median hourly wages of heavy truck and tractor-trailer drivers were $17.92 in May 2008) 39

40 Figure 19: 2010 WA-NA transport cost comparison revised Figure 20: 2012 WA-NA transport cost comparison The revised 2010 numbers show that transport and logistics in West Africa were about 2.5 times higher than in North America and 2 to 3 times longer. In other words, transport in West Africa are still considerably higher than in developed countries (as represented by North America in this case study) but not by as much as we thought in In 2012, transport in West Africa have improved vis-à-vis North America and are now only 1.6 times higher. Transport times and s however remain the same with West Africa still being 2 to 3 times longer and having much uncertainty. See Table 11 below for details. Table 11: West Africa and USA Transit Time and Cost Comparison 2012/2010 Comparable per TEU 2010 (revised) 2012 % Change in cost % Change in time US Imports : USD 1,339 / 5 days USD 1,958 / 5 days +46% 0% US Exports: USD 1,060 / 3 days USD 1,583 / 3 days +49% 0% WA Imports: USD 3,260/8-15 days USD 3,192/ 7-14 days -2% -12%/-1% WA Exports: USD 2,808/3-6 days USD 2,451/ 4-5 days -13% +33%/-16% WA compared to US - import X 2.4 / x 2.3 X 1.6 / % 0 WA compared to US - export X 2.7 / x 1.5 X 1.5 / % 0 40

41 From 2010 to 2012, transport and logistics expressed in US dollars have increased by almost 50% in North America while comparative in West Africa have decreased in by 2% for imports and 13% for exports. The cost increase in the US may be due to the significant increase in fuel prices in the USA from 2010 to 2012, about 33% increase for diesel for example 14. Interestingly enough the cost increases reported by Maersk are contrary to the North American transport price index we quoted in Section 2 above. This revised comparison between North America and West Africa underscores that in spite of the improvements observed in West Africa there are still many challenges to overcome and opportunities to take advantage of before transport and logistics in West Africa is as efficient as in North America. 14 See 41

42 5. CONCLUSIONS & RECOMMENDATIONS The most important conclusion from this study is that change for the better may be slow but it does happen when it comes to transport and logistics in West Africa as demonstrated by the important improvements over the period that we have documented on the Tema-Ouagadougou corridor. Lower & bribes Transport & logistics on the corridor (in US dollars) have gone down by 9% over the period while reported bribes have been reduced by more than 50%! The true local impact of this is difficult to interpret as, during the period, the cedi has lost almost half its value against the US dollar and inflation in Ghana has been 68%. The franc cfa on the other hand has strengthened against the US dollar by about 20% and Burkina Faso was subject to a cumulative inflation of 18% over the period. Shorter time & s The overall time required to move a container from Tema port to Ouagainter has been reduced by 4% between 2008 and This may not seem like much but has happened in spite of vessels spending longer time waiting at anchor, because of port congestion, and longer time at berth, because vessel are larger and carrying more containers. These new s however, were more than compensated for through reduced processing times for transit import which overall improved by about 15%. Timing of corridor performance data for comparison When the first Corridor study was conceived it was hoped that it could be used by operators to choose the most efficient route. So when in 2012 we published the second corridor study, the Lomé- Ouagadougou corridor report, we noted that this corridor seemed more competitive in terms of processing time and s than the Tema-Ouaga corridor. However, as the data for the Lomé- Ouaga report was collected about 2 years after the Tema-Ouaga data, the apparent higher efficiency may simply be a result of a general trend across the region of slow but steady improving transport and logistics performance. Therefore, if one wants to compare different corridor performances a conclusion from these studies is that the data must be collected at approximately the same time for the comparisons to be reliable and relevant. Summary of Issues and Opportunities In spite of the improvements that are being reported in this study, there still remain many opportunities for the transport & logistics sector in West Africa to do better in terms of lower, less informal payments, better utilization of facilities and equipment, faster processing and more certainty in, times and information. Through its work on Road Governance and Corridor studies and its work on expediting trade and the analysis of the ECOWAS Trade Liberalization Scheme, the Trade Hub has identified many issues that, if successfully addressed, will make West Africa considerably more cost efficient and more competitive in world markets. 42

43 The issues identified by the Trade Hub and others can usefully be categorized under the following headings: Regional Integration Customs modernization and the availability of information Expediting trade Ports, border crossings and inland terminals Transport Reform Finance Insurance & Cargo security bonds Safety & security Enforcement & implementation of rules & regulations Corruption The table below summarizes the main recommendations that have come out of the Trade Hub s transport and business environment work over the past few years, complemented with recommendations from the 2008 ECOWAS Regional Transport and Transit Facilitation Program. In regard to Customs modernization and the availability of information, the Trade Hub has developed several recommendations over the years based on our studies and input from stakeholders. However we find that the summary put together by the WTO as part of the Doha trade facilitation negotiations 15 is more comprehensive and we are therefore quoting it in the table below: Table 12: Improve West Africa Transport & Logistics - Issues and opportunities ISSUE/OPPORTUNITY RECOMMENDATION/ACTION Regional integration Establish a common market Agree on Common External Tariffs Remove internal borders (Requires common collection and distribution of duties UEMOA has established a common market but has not removed internal borders) Simplify ECOWAS Customs code Notify member states of changes in policy and rules in a timely manner Customs modernization and availability of information Publication and availability of information Ensure prompt publication of a wide range of information, such has procedures, duties and taxes, fees, rules for classification and valuation, etc. in a non-discriminatory and easily accessible manner Prior publication and consultation Ensure reasonable interval between publication and entry into force of new or amended trade-related laws or regulations 15 From the WTO Draft Consolidated Negotiating Text TN/TF/W/165/Rev.14 which are part of the current Doha Round Trade Facilitation negotiations. The document reviews these and several sub-issues, which all apply to West Africa. An additional resource for customs reform is the WCO International Convention on the Simplification and Harmonization of Customs procedures (revised Kyoto Convention (2006) 43

44 Advance rulings Ensure the right to a ruling in writing, within and valid for a specified time, to a written request on questions such as tariff classifications, rules of origin etc. Appeal procedures Ensure the right to an administrative or judicial appeal of a decision Impartiality, non-discrimination and transparency Ensure impartial, transparent and non-discriminatory regimes shall be in place to deal with import alerts, detention of shipments and test procedures to address risks related to animal health, plant health and food safety Fees and charges in connection with importation and exportation Ensure that fees and charges are limited in amount to the approximate cost of services rendered Release and clearance of goods Ensure procedures for - Pre-arrival clearing - Separation of Release from final Determination and Payment of Duties, Taxes, Fees and Charges - Risk management - Post-clearance audit - Publication of Average Release Times - Trade Facilitation measures for Authorized Operators - Expedited shipments Consularization A consular transaction (invoice or visa) and related fees shall not be required for the importation of any goods it is not known by the authors how big an issue this is in West Africa Border agency cooperation Ensure alignment of working days and hours and procedures and formalities. Develop and share common facilities and do joint controls. Establish one stop border post controls and expedited processes for goods in transit ities connected with importation, exportation and transit Take the following actions: - Minimize the complexity of formalities - Simplify documentation requirements - Accept copies of originals - Use international standards - Establish Single Windows where traders can submit documentation at a single entry point - Pre-shipment and destination inspections shall not be required - The use of customs brokers shall not be mandatory Freedom of transit Customs convoys for transit traffic shall not be required except in circumstances of high risk. Transit formalities shall be minimal and charges shall only represent the cost of services rendered. Customs cooperation Customs authorities shall endeavor to cooperate and share information Expediting Trade (ECOWAS Trade Liberalization Scheme - ETLS) Streamline and speed up the ETLS approval process Give preferred treatment to ETLS approved operators, as per ETLS rules Respect existing agreements on the duty free flow of regional goods, in particular local agricultural products 44

45 Transport reform Create a regional trucking market, including the abolishment of quotas and the permission of cabotage (The aim is an ECOWAS-wide trucking market. However until this is achieved, trucking can be deregulated on bilateral basis or among smaller groups of countries) Improve truck/cargo allocation Encourage & facilitate fleet renewal/access to finance Professionalize of the industry - Assure transporters are qualified, registered, solvent and compliant with regulations - Assure drivers are well trained in safety, driving and loading and knowledgeable of rules & regulations Provide training and information radio programs/ sms on transport in local languages update & improve Drivers Guides Improve safety - Enforce axle load & vehicle dimension regulations - Provide rest stops & parking areas - Ensure the availability of towing services along corridors Ports, border crossings and inland terminals Finance Insurance and cargo security bonds Safety & security Implementation & enforcement of regulations Simplify procedures Provide expedited services for transit traffic Extend and harmonize working hours Provide express lanes for low-risk, transit and ETLS approved shippers Access to finance Currency convertibility Implement the ISRT single security bond for transit goods A better alternative may be to replace the ISRT scheme with the well-established international TIR system adopted by the UNECE and operated by the International Road Union (IRU) Abolish the requirement that imported goods must be insured by a national insurance company in order to be cleared by customs This is a requirement in Burkina Faso and possibly also in other West African landlocked countries Ensure vehicles are in good driving conditions Ensure trucks are correctly loaded and respect authorized dimensions Ensure drivers are properly trained Provide proper rest stops along corridors Enforce speed limits and driving hours Harmonize traffic rules - develop & enforce a regional highway code Enforce Axle load regulations Corruption Eliminate fixes road checkpoints (Dec 15/2005/CM/UEMOA) Use mobile & targeted inspections for compliance, safety and security Punish corrupted officers & publicize policies and actions taken Establish toll free hot lines & report on outcomes 45

46 Issues and opportunities can further be divided into broad national or regional ones and narrow issues that are corridor or node specific. It is also useful to categorize issues and opportunities as either strategic or tactical. Strategic issues will usually have greater impact and may often be regional in nature, but are usually complex with legal or regulatory implications and are therefore likely to be difficult and time consuming to resolve. Tactical issues are national, corridor or node specific issues which require process rather than regulatory change and are therefore likely to be easier and faster to resolve but may have less impact than strategic ones. All the issues and opportunities listed above are found throughout the region. However there are also problems and opportunities specific to each country, to each corridor and to each node of transport, be it a port, a border crossing, or and inland terminal. Advocacy & Action for Change For change to happen effective advocacy based on evidence rather than perception and anecdotes is required. This is why the Trade Hub has supported and promoted on one hand the establishment of the private-sector-led Borderless Alliance for advocacy and on the other the West Africa Transport & Facilitation Observatory for timely and reliable evidence. In order to develop effective strategies for advocacy and action on a particular issue, one must be prepared to present well documented discussion papers to policy makers and other stakeholders with constructive ideas on how an issues can be improved, and to gain support for change. Such discussion papers must describe the issue in sufficient detail, provide context of why it is an issues and how it has evolved over time, estimate the organizational and implications of both inaction and action, and a discussion on how the issue is dealt with according to best practices. Consultation with stakeholders interested in and/or affected by the issue is also of utmost importance. It should be kept in mind that few issues can be resolved without close cooperation between the public and private sectors and that it is almost always a good idea to involve civil society. Plea for Availability of Information and Transparency One of the rationales for undertaking the corridor studies was, from the beginning, to address the lack of information which stakeholders have identified as one of the more serious hurdles to efficient trade and transport in the region. Much information relevant to transport and trade facilitation is available with government agencies, uniformed services, chambers of commerce and shippers councils, as well as associations and private companies, but access is often difficult, if not impossible. We would therefore like to conclude this report by making a plea for transparency and information sharing. For example if one takes the issue of checkpoints which was the genesis of the corridor reports, police and the gendarmerie points to the challenges of security and safety and the problems with non-compliant trucks and drivers. Customs justifies checkpoints by pointing to the issue of diverted cargo and thus lost revenue and problems with smuggling of arms and drugs and other illegal products, as well as non-compliant and fraudulent traders and transporters. 46

47 These are all very real, serious and difficult problems on which fixed checkpoints are unlikely to have much impact. Instead fixed checkpoints are seen by the public and private sector stakeholders to be primarily an excuse for officials to collect bribes. This has not only a negative effect on trade and transport, but also on the image of the uniformed services, which are often seen as thieves by ordinary people, and the trust between the government and people. The issues brought up by the police, gendarmerie and customs are however very real and it is in the interest of both the private and public sector to find effective ways to address them. And one important way to accomplish that is for the police, the gendarmerie and customs to be open and transparent with the information they gather. For example, the police and gendarmerie should report on accidents, security incidents, fines issued and collected, and on what is happening at checkpoints, while customs should report on the incidents of diverted cargo and other misdemeanors. This will greatly improve the image and understanding of the work done by these government agencies, provide the necessary information to holding dialogues, and allow private sector and civil society stakeholders to contribute constructively to finding solutions. 47

48 Tema Ouaga Bamako Corridor References & Annexes

49 REFERENCES Adjavor, B. Coordination and harmonization of policies towards an effective transit trade regime in West and Central Africa. Ministry of Foreign Affairs, Regional Integration and NEPAD (2008) African Development Bank and UNECA. Review of the implementation status of the trans-african highways and the missing links (2003) Anson, Cadot & Olarreaga, Tariff Evasion and Customs Corruption: Does Pre-Shipment Inspection Help? HEC Lausanne (2006) CARANA Corporation. Final report for the TESS special study on the impact of transport and logistics on trade competitiveness prepared for USAID, Trade and Enhancement for the Services Sector (2005) Chemonics International Inc. Evaluation of port fees and efficiency: Ghana vis-a-vis Benin, Côte d Ivoire, Nigeria, Togo and Dominican Republic. Prepared for USAID, Trade and Investment Program for a Competitive Export Economy (TIPCEE) (2008) Christ and Ferrantino. Land transport for exports: the effects of cost, time and uncertainty in sub- Saharan Africa, US International Trade Commission, April 2009 Committee on Regional Cooperation and Integration. Trade facilitation to promote intra-african trade (2005) Consia consultants, SITRASS, BESTE Etude des impacts de la réduction des charges des véhicules poids lourds EUROPAID/125136/D/SER/BF (2008) Darbéra R. Measuring the benefits from road haulage deregulation example of some French results, Proceedings of the World Conference on Transport Research, Antwerp (1998) Djankov, S. et al. Trading on time, World Bank, Doing Business document (2006) De Wulf, Luc., Ghana Leads West Africa in Transit Reform, Investment Climate in Practice, ECOWAS Vision document, March 2010 European Conference of Ministers of Transport. Regulatory reform in road freight transport: Etudes des impacts de la réduction des charges des véhicules de poids lourds. Proceedings of international seminar OECD Publication Service. Europaid/125136/D/SER/BF, octobre 2008 Essien, V. Regional trade agreements in Africa: a historical and bibliographic account of ECOWAS and CEMAC (2006) Hummels, D. Calculating tariff equivalents for time in trade USAID/Nathan Associates Inc. (2007) Limao, N., and A. Venables. Infrastructure, geographical disadvantage and transport. World Bank economic review 15 (3): (2001) McKinnon A.. Past trends, Regulatory reform in road freight transport: proceedings of the international seminar, February 2001 N Guessan, N. Improvement in transit transport in West Africa. First session of the Intergovernmental Preparatory Committee of the International Ministerial Conference on Transit Transports Cooperation, New York (2003) Ouedraogo R. et al. - Etude sur les possibilités d optimisation de l utilisation du corridor ghanéen par les chargeurs du Burkina Faso. Conseil Burkinabé des Chargeurs (2007) PADECO Etude comparative de faisabilité sur la création de guichets uniques dans les principaux ports du corridor Abidjan-Lagos: rapport final provisoire mai Raballand, G. & P. Macchi. Transport prices and - the need to revisit donors policies in transport in Africa, World Bank (2008) République Togolaise & République de Haute-Volta. Protocole d accord de transports routiers entre la république togolaise et la république de Haute Volta. 14 avril [1/3 :2/3 & agreement] (1984) Teravaninthorn S. & G. Raballand. Transport prices and in Africa: a review of the international corridors, World Bank (2008) USAID, Senegal. Dakar-Bamako Corridor Cost of Transport Analysis, Prepared by Booz Allen Hamilton (2010) 49

50 USAID West Africa Trade Hub. Transport and Logistics Costs on the Tema-Ouagadougou Corridor April 2010 USAID West Africa Trade Hub Transport and Logistics Costs on the Lomé -Ouagadougou Corridor January 2012 Zerelli, S., O. Hartmann & B. Stoven. West African road transport and transit Facilitation Strategy. ECOWAS Technical Assistance Project, Regional Transport and Transit Facilitation Program (Ref 9 ACP ROC 08) (2008) Zerelli, S & A. Cook. Trucking to West Africa s landlocked countries market structure and conduct, USAID West Africa Trade Hub (2010) 50

51 ANNEX A: ASSUMPTIONS, EXCHANGE & INFLATION RATES ANNEX A.1: CASE STUDY ASSUMPTIONS Most encountered by the importer or exporters are transaction based, i.e. they are independent of the type, value or tonnage of the cargo. However whenever there are charges that are not transaction based, we use the following assumptions in the detailed and procedure tables in the annexes that follow for both the Tema-Ouaga and Tema-Bamako corridors: IMPORT General Assumption: The import tables in the following Annexes document for the following cargo: - Mode: 20 foot container (TEU) - Type: Edible Oil - Value: USD 22,000 (a fully loaded container 16 ) - Weight: 22 tonnes With those general assumptions, two cases are considered for benchmarking and comparison: Case 1: Container arrives in Tema in a sealed container and is transported to Ouagadougou in the same container, and offloaded at importer s premises at final destination (referred to as container door-to-door ) Case 2: Container arrives in Tema, and cargo is offloaded from the container and loaded into a truck at Tema port for onward carriage to Ouagadougou (referred to as break-bulk ) EXPORT General Assumptions: The export tables in the following Annexes document for the following cargo: - Mode: 20 foot container (TEU) - Type: Shea nuts - Value: USD Weight: 17 tonnes Case 1: Container is loaded with cargo in Ouagadougou and is transported to Tema for export (referred to as container door-to-door ) Case 2: Cargo is loaded into a truck in Ouagadougou, transported to Tema, and loaded into a container at the Shipping line s container yard (referred to as breakbulk ) The assumptions for both Import and Export are based on real and documented cases that were part of the original 2010 Tema-Ouaga study We have chosen to concentrate on comparing moving goods in containers versus as break-bulk because using containers has many advantages such as: less handling and therefore less theft and damage; faster processing; 16 The maximum gross mass for a 20 ft (6.1 m) dry cargo container is 24,000 kg, and for a 40-ft (including the 2.87 m (9 ft 6 in) high cube container), it is 30,480 kg. Allowing for the tare mass of the container, the maximum payload mass is therefore reduced to approximately 22,000 kg for 20 ft (6.1 m), and 27,000 kg for 40 ft (12 m) containers. See

52 Annex A: Assumptions, Definitions, Inflation & Exchange Rates less likelihood of overloading and therefore less damage to road infrastructure and safer driving; Less likelihood of local fraud and smuggling if the cargo stays in a sealed container from origin to final delivery. However in spite of these advantages most goods is still moved as break-bulk and there is an urgent need to understand the dynamics of containers versus break-bulk in order to find ways of promoting containerization. ANNEX A.2: : : DEFINITION OF COSTS USED IN THE STUDY All receipted All un-receipted This definition is interpreted more carefully in this study than was the case in previouos corridor studies. For example the fee of a Coxeur in Tema port who is an independent agent matching a cargo owner with a transporter is informal as it is not receipted. However it is not an illicit payment as it is a voluntary payment for a service considered useful and not provided effectively by the formal sector. On the other hand, the charges by Goro boys at the Paga border who take the drivers documents and present them to Customs are considered illicit because it is an unnecessary service which seems to be imposed through intimidation. Port Costs: Trucking & prices: and informal port and shipping line charges All formal and informal charges associated with the organization of trucking, labor for loading of the truck, and the price of the trucking journey Note: Trucking prices Include Illicit payments by driver on the road, payments to coxeurs (trucking middlemen) at origin, and all payments made directly by the truck driver in the cargo clearance process. Customs processing : Forwarding : Duties and taxes: All formal and informal charges payable to customs authorities and other government agencies at the ports, at borders and at destination, as well as the fee for the bond required by the Ghanaian customs for all goods transiting Ghana commonly referred to as the guarantee premium. All formal and informal payable to forwarders for clearing goods and organizing transport Customs duties and taxes 52

53 Annex A: Assumptions, Definitions, Inflation & Exchange Rates Opportunity : The cost of capital locked up while goods are transported, or in the case of truck owners, when trucks are being unnecessarily ed ANNEX A.3: DEFINITION OF STANDARD TIME AND DELAYS Standard Time is defined to be the average time spent on an activity, assuming all things is working normally. Standard time is equal to normal processing and travel time. Delays are defined as the time spent over and above what respondents considered being normal processing and travel time at the various stages of the cargo clearance process. This includes waiting before processing, s caused by computer or communication downtime, officers being absent, waiting for convoys or escorts etc. ANNEX A.4: INFLATION & EXCHANGE RATES Exchange rates and inflation rates used in the analysis are listed below: Inflation Inflation Cumulative Ghana 16.5% 19.3% 10.9% 8.7% N/A 68% Burkina 10.7% 2.6% 1.4% 2.8% N/A 18% Source: Index Mundi - Exchange Rates Exchange Rates Tema-Ouaga study (2008) Lomé -Ouaga study (2010) 2011 (Average) 2012 (September) USD/GHS USD/XOF Source: 53

54 Annex A: Assumptions, Definitions, Inflation & Exchange Rates ANNEX A.5: EU AND NORTH AMERICAN TRANSPORT PRICE INDEXES Through a web search we found transport price indexes for both Europe and North America. These indexes suggest that transport prices at the beginning and the end of the period were fairly equal. This mirrors the transport development we observed on the Tema-Ouaga corridor. In stark contrast to this, the Newark-Chicago case study with information from Maersk, which we use to compare transport performance in West Africa and North America, show that transport in North America have gone up by about 50%. We don t know if this contradiction can be explained. US Transportation Price Index Source: Transportation Price Index 17 European Transport Price Index Source: Transport Market Monitor (Outlines developments in European road transport rates) 17 The Transportation Price Index (TPI) tracks monthly changes in prices paid for transportation services expressed in terms of US$ per ton-mile 54

55 ANNEX B: TEMA OUAGADOUGOU CORRIDOR (IMPORT) ANNEX B.1: VESSEL ARRIVAL IN TEMA PORT Process description (GHS) (GHS) Average standard time Observed average (GHS) (GHS) Average standard time Observed average Comments 1 Vessel arrives at anchor 2 Vessel at berth These activities are 24/24 whereas all other port activities are considered 8 hour days Total

56 ANNEX B.2: PROCEDURES & COSTS IN TEMA PORT (TRANSIT IMPORT TO BURKINA FASO) Process description (GHS) (GHS) Average standard time Observed average (GHS) (GHS) Average standard time Observed average Comments 1 List of documents required: - commercial invoice (translated into English), - packing list, - copy or original Bill of Lading 2 Rotation number to be provided by carrier when vessel at berth (needed for the customs declaration) 3 Invoice and packing list sent to customs valuation officer 4 In transit electronic customs declaration submitted to GCNet 5 Receive GCNet electronic entry ready to be printed. To assess the SIC insurance bond, send all documents to 2008: Done by Bond seat 2012: Done by Compliance officer Faster process Bond seat no longer exists

57 Annex B.2: Procedures & in Tema port (Transit imports) Process description (GHS) (GHS) Average standard time Observed average (GHS) (GHS) Average standard time Observed average Comments 6 Pay SIC bond and satellite tracking box, at the bank in the long room 2008: GHS 50 for GPS trans-ponder plus 0.50 % of the duty payable had the goods been imported to Ghana 2012: USD 50 for GPS trans-ponder plus 0.50 % of the duty payable Customs duty: 20% on cooking oil valued at USD 22, USD USD 50 USD GPS transponder fee currency has been changed from GHS to USD due to GHS volatility. Payment made in GHS based on current USD/GHS exchange rate : Return to the bond seat, with the bank receipt to be presented to the customs officer for system update 2012: Forwarder takes declaration and bank receipt to assigned compliance officer for verification and certification 8 Go to SIC with the bank receipt to print the bond 9 Go to the customs compliance officer, where the set of documents is verified. This officer assigns an examination officer at the freight station

58 Annex B.2: Procedures & in Tema port (Transit imports) Process description (GHS) (GHS) Average standard time Observed average (GHS) (GHS) Average standard time Observed average Comments 10 With the GCNet declaration number, the forwarder goes to the shipping line for the exchange of documents and pays the shipping charges. A Delivery Order (DO) is given back to forwarder USD USD Increase in s in processing times at some shipping lines while others have improved 11 With the declaration number, the forwarder goes to CBC to establish the 'freight declaration' and gets the 'CBC loading note' or 'bon de chargement' (needed for the truck laissez passer to enter the port), pays for the CBC way bill and goes to OTRAF for its loading advice. XOF 12, XOF 12, Quicker process OTRAF: XOF 10,000/truck; CBC Waybill: XOF 2,500 (by agent) (Drivers pay an additional XOF 10,000 to CBC, included in trucking price) 12 Burkina Faso Chamber of commerce: payment of PMD 'Passage Magasin Douane' (based on Bill of Lading) ; 20'/40' container: XOF 13,000/21,000; bulk XOF 385 per tonne XOF 13, XOF 13,

59 Annex B.2: Procedures & in Tema port (Transit imports) Process description (GHS) (GHS) Average standard time Observed average (GHS) (GHS) Average standard time Observed average Comments 13 Go to the freight station (GPHA, MPS, Golden Jubilee) with the shipping company's DO and the Burkina Chamber PMD, pay the handling charges and obtain an entry permit to load truck (a payment receipt) USD USD : Handling charges GHS 18.92/20' plus MPS dock transfer fees: USD : Handling charges of USD plus MPS dock transfer USD (VAT included) 59

60 Annex B.2: Procedures & in Tema port (Transit imports) Process description (GHS) (GHS) Average standard time Observed average (GHS) (GHS) Average standard time Observed average Comments 14 With handling charges payment receipt, entry permit and CBC 'bon de chargement', the forwarder and the driver enter the freight area and see the customs examiner to proceed to the examination (seal checking, car chassis number, cargo and number of packages also checked if container to be stripped ) GCNet on line release and issue of delivery allowance. Truck is loaded CASE 1 (container): CASE 2 (break-bulk) stripping fee: 2008: Fee based on 2.39 GHS/tonne, minimum 25t/TEU USD : Fee per unit USD 71.5/TEU : New procedures include weighing the loaded truck and issuing a weight certificate which is checked at the exit gate 16 At the exit gate, GPHA security checks on system if all is OK and issues the Waybill n/a n/a n/a n/a

61 Annex B.2: Procedures & in Tema port (Transit imports) Process description (GHS) (GHS) Average standard time Observed average (GHS) (GHS) Average standard time Observed average Comments 17 At the exit gate, a customs official checks if the cargo has received the delivery approval by a customs examination officer 18 Escorted by GPHA security to the Transit Parking Yard. Wait until sufficient number of trucks before departure in a convoy 19 Go to SIC, at the port and buy a log book (GHS 2.5) plus a sticker (GHS 1) filled by a customs agent. Information to be filled and given back to SIC for stamp and signature 20 Buy a customs seal at transit park customs office. The seal number is written on the entry 21 Go to the parking yard GCNet office to get the satellite device (paid in step 5). The officer keys the satellite devise number and the seal number into the system : When congested up to 10 GHC may be paid at the gate for quicker exit Quicker process Quicker process Increased s due to occasional device shortages - informal fees paid for quicker service. 61

62 Annex B.2: Procedures & in Tema port (Transit imports) Process description (GHS) (GHS) Average standard time Observed average (GHS) (GHS) Average standard time Observed average Comments 22 Go to the National Security service at the main port with all documents (GCNet entry, log book, commercial invoice, packing list) to vet the documents and sign the logbook 23 At transit park, a customs official detaches a copy of the documents 24 At transit park exit, customs check the seals 25 At the exit gate GPHA security verify the waybill 26 At exit gate National Security verifies that log book has been signed by their colleague at the port Transporter union fee (JAPTU) Truck is allowed to leave and has 5 days to reach the border. Forwarding fees: 2008 : USD 135/180 per 20 / :USD 150/200 per 20 /40 USD 135 USD

63 Annex B.2: Procedures & in Tema port (Transit imports) Process description (GHS) (GHS) Average standard time Observed average (GHS) (GHS) Average standard time Observed average Comments TOTAL: Case 1 (Container) GHS USD GHS 40 1,335 (22.3 hours) (2.8 days) 570 (9.5 hours) (1.2 days) GHS USD GHS (10.7 hours) (1.3 days) 650 (10.8 hours) (1.4 days) Decrease in standard time XOF 25,500 XOF 25,500 TOTAL: Case 2 (Break-bulk) GHS USD GHS 53 1,755 (29.3 hrs) (3.7 days) 690 (11.5 hrs) (1.4 days) GHS USD GHS (17.7 hrs) (2.2 days) 770 (12.8 hrs) (1.6 days) Decrease in standard time XOF 25,500 XOF 25,500 GRAND TOTAL Case 1: (Container) USD days 1.2 days days 1.4 days GRAND TOTAL USD Case 2: USD (Break-bulk) days 1.4 days days 1.6 days 63

64 ANNEX B.3: ROAD TRANSPORT LEG - TRANSIT IMPORT TO BURKINA, MALI & NIGER Annex B.3.1: TRUCKING PRICES 2008 AND 2012 NORTHBOUND CARGO Comments Trucking rate Trucking rate Case 1 (Container): Case 1 (Container): Up to 15MT per 20 : 900,000 1,110,000 Up to 15MT per 20 : 1,100,000 1,380,000 Additional fee per tonne: 30,000 Additional fee per tonne : 40,000 (cargo =22 tonnes) Up to 30 MT per 40 : 1,300,000 (cargo =22 tonnes) Up to 30 MT per 40 : 1,400,000 OTRAF Reference rates Case 2 ( Break-bulk - per tonne): 1,200,000 Case 2 ( Break-bulk - per tonne): 1,600,000 Average Bulk per tonne: 30,000 Average Bulk per tonne: 40,000 Assumption: Importer pays for full load of 40 tonnes Assumption: Importer pays for full load of 40 tonnes TOTALS Case 1: TOTALS Case 2: USD USD Bribes at checkpoints & borders (Factored into trucking price) Source: 8 th IRTG REPORT 2,664 2, Bribes at checkpoints & borders (Factored into trucking price) (21 st REPORT June-Sept 2012) 2,622 3, Note: An importer can do a number of things to reduce the trucking price including: a) Negotiate a better rate (possibly) b) For containers: Transport two 20 containers on one truck c) For break-bulk: Share the load so that the importer only pays his share of the full load Other paid by trucker directly include payment to truck middlemen, coxeurs, for finding cargo: XOF 60,000 in both 2008 and 2012.

65 Annex B.3: Road Transport Leg - Transit Import to Burkina, Mali & Niger Annex B.3.2: PROCEDURES & COSTS AT PAGA (GHANA BORDER WITH BURKINA FASO) TRANSIT TO BURKINA, MALI OR NIGER Process description 1 Driver or border middleman, Goro boy, gives the documents (customs entry, sub-consignment note, ISRT logbook, freight station waybill) to customs office for verification & registration. 2 Customs officer physically checks that the truck, container or cargo correspond to the customs entry. The GCNet officer removes the GPS tracking device. 3 Customs and GCNet verify in the system if the documents are in line with the information entered at Tema. 4 If OK, the customs officer electronically approves the shipment in GCNet. 5 Driver or border middleman gives the truck documents to customs for manual registration. Customs allows the truck to cross the border after removing the SIC sticker Average standard time Observed average Average standard time Observed average Comments , , XOF 5,000 to border middle-man and XOF 2,000 (customs) , , , , Totals 0 10, ,

66 Annex B.3: Road Transport Leg - Transit Import to Burkina, Mali & Niger Annex B.3.3: IMPORT PROCEDURES & COSTS AT DAKOLA (BURKINA FASO BORDER WITH GHANA) Process description Average standard time Observed average Average standard time Observed average Comments 1 The driver goes to the police for registration with his driver's license, ECOWAS Brown Card certificate, international permit or Carte grise and roadworthiness certificate. He then hands the customs documents over to the forwarder. 2 The forwarder checks the truck, cargo or container and documents (invoice, packing list, bill of lading, Ghana customs declaration, CBC interstate way bill issued at Tema). 3 The forwarder gives the waybill to the Garde Magasin (warehousing customs officer) for registration, who assigns an entry number to the truck. 4 With this entry number the forwarder fills in and pays for the ISRT logbook issued by the Chamber of Commerce. 5 The forwarder submits the declaration for online entry into the Burkinabé customs system (computer available at customs office). 6 The customs declaration is issued and the file is sent to the compliance officer , , , , , , ,

67 Annex B.3: Road Transport Leg - Transit Import to Burkina, Mali & Niger Process description Average standard time Observed average Average standard time Observed average Comments 7 After these checks, the forwarder sends the file for approval by the head of the customs office : After acknowledgement by the head of the customs office, documents are sent to a cashier for the payment of i) the guarantee fund premium or customs bond of 0.25% of the cargo value (USD 55 on cargo value USD 22,000), ii) customs overtime XOF 5,521 per file (vat inclusive) and iii) the IT fee per file of XOF 5,000 plus XOF 1,000 per additional cargo type 10,521 USD 55 1, ,528 USD 55 1, Increase in customs overtime fee 2012: Customs Overtime increased to XOF 6,528 9 Garde Magasin sends the file to the escort agent : Truck is weighed and weight certificate issued 2, , , Customs escort receives file, including the ISRT logbook, for the escort to Ouagadougou, and the truck waits for the escort to depart. Case 1: Containerized Case 2: Stripped 10,000 10, ,000 10, No escort for containerized cargo in 2012 Escort fee: XOF 5,000 Road taxes : XOF 5,000 per truck 67

68 Annex B.3: Road Transport Leg - Transit Import to Burkina, Mali & Niger Process description Average standard time Observed average Average standard time Observed average Comments : Truck is weighed and weight certificate issued 7, Forwarding fees 2008 : XOF 30,000 per truck 2012 : XOF 37,000 per truck 30,000 37,000 TOTALS Case 1 : (Container) Case 2: (Breakbulk) 23,408 + USD 55 23,408 + USD 55 7,000 7, (4hrs) 240 (4hrs) 350 (5.8hrs) 350 (5.8hrs) 29,075 + USD 55 34,075 + USD 55 7,000 7, (2.8 hrs) 165 (2.8 hrs) 245 (4.1 hrs) 290 (4.8 hrs) GRAND TOTAL Case 1: (Container) GRAND TOTAL Case 2: (Breakbulk) USD USD hrs 4hrs 5.8 hrs 5.8 hrs hrs 2.8 hrs 4.1 hrs 4.8 hrs 68

69 ANNEX B.4: IMPORT PROCEDURES & COSTS AT OUAGARINTER 2008 &2012 Annex B.4.1: OUAGARINTER IMPORT PROCEDURES AND COSTS IN 2012 Process description Standard Average Comments 1 Arrival of the truck at Ouagarinter: weighing fee paid to the Chamber of Commerce (CCIBF), ONASER inspects the axle load The time needed depends on the number of trucks that have arrived. 2 a) Escort vehicles: the escort officer from Bitou transmits the transit receipt IM8, the T1 Customs Declaration and the escort order to the Bureau de Suivi de transit (Transit tracking office)-bst who physically inspects the vehicles in presence of the escort agent. The BST transmits the documentation to the Brigade commerciale (Trade Division) - BC which then proceeds with the identification For trucks with an escort, this operation requires the presence of the escort officer. The maximum for a truck from Bitou is 48 hours. The BST transmits the documents to the BC as soon as the truck arrives. b) Free convoy trucks: these trucks travel with their customs documentation and submit them directly to the BC officer. 3 The BC submits a copy of the set of Customs documents to the Chamber of Commerce (CCIBF) where the goods are recorded and the documents are returned to the BC; in the case of containerized goods, the customs documents are transmitted to the Terminal Routier à Contenur du Burkina (Container Road Terminal of Burkina)-TCRB for the mandatory deposit of the container. The BC transmits the documents to the "Garde Magasin (Customs Storekeeper) - GM. Case 1 : Containerized - container handling fee 147, minutes if the goods are not containerized; s depend on the rush. The TCRB rates are: XOF 125,000 for a 20 container and XOF 200,000 for a 40 container + 18% VAT (including delivery) The container handling fee was introduced in The Garde magasin (GM) - Customs Storekeeper - validates the T1 Declaration in ASYCUDA and allocates a handling number. The GM transmits the documents to the Chief of the Customs Office 0 2, The s are the result of new customs procedures (from May 1 st 2012) which require that all clearing operations be done at Ouagarinter.

70 Annex B.4: Import & procedures at Ouagarinter 2012 Process description Standard Average Comments 5 The Customs Office Chief decides whether to offload the goods into a warehouse or authorize the clearing on the vehicle. He submits the documents to the GM who in turn transmits them to the forwarding agent The forwarding agent establishes the Declaration in the ASYCUDA system which indicates the amount due for the prepayment of duties and taxes % of declarations are made in the Customs Offices and there are always system connectivity issues 7 The forwarding agent pays the duties and taxes to the cashier; the cashier delivers a prepayment receipt. Electronic taxes: XOF 5,000 + XOF 1,000 per type of goods + 1/000 of the CIF value** (not included here) + Duties and customs taxes depending on the goods. 5, The waiting period can be long depending on the rush 8 The forwarding agent confirms his/her declaration in ASYCUDA and prints it. The system allocates one of the 5 circuits to the file (green, blue, yellow, red, dispute); except for the green circuit, the Declaration is allocated to an auditor. 2, XOF 2,530 per Declaration + XOF 1,000 per type of goods 9 The forwarding agent returns the Declaration to the GM in a bound folder for stamping (office stamp and recording number of all the documents attached) 0 2, Average informal of XOF 2, the GM returns the stamped Declaration to the "Chef de Visite" (Visit Chief) who after a brief inspection, transmits it to the Customs auditor designated by ASYCUDA The auditor inspects the declaration ; the physical inspection depends on the type of circuit selected (blue, yellow, red, ) 13, ,500 Additional time (TS) for the visit. Documents will not be processed if the TS receipt is not attached 70

71 Annex B.4: Import & procedures at Ouagarinter 2012 Process description Standard Average Comments 12 The Chief of the Customs Office ensures that the Declaration is correct and transmits it to the cashier who prints the final receipt The Chief of the Customs Bureau can question the work of the Customs conformity agent and perform an additional check 13 The forwarding agent pays the additional amount to the customs cashier (if necessary) and receives the final receipt The Customs duties and taxes can be invoiced in excess if the value or nomenclature has changed 14 The forwarding agent proceeds to the customs conformity officer with the final customs receipts to retrieve the BE (Release Warrant) and then to the Brigade Commerciale (Trade Division) The Customs auditor releases the warrant by recording it in the register that will be transmitted to the Trade Division. 15 The BC records the BE and designates an Ecor agent at the exit Ecor : XOF 6,120/truck 16 The forwarding agent pays the "Passage Magasin Douane" (Customs warehousing) PMD at the Chamber of Commerce as well as the parking fee (if necessary) 27, PMD XOF1,250 or 4,750/t in case loading is carried out in the warehouse 10 days of exemption for the parking fee 17 At the exit of the warehouse, the Ecor officer inspects the goods or proceeds with the inspection at the forwarding agent s office if the goods are to be inspected there. 0 XOF 25,000/ camion The escort is mandatory. These are averagely XOF 25,000/truck and can reach up to XOF 100,000 to avoid Ecor 18 At the exit of Ouagarinter, the documents are inspected by the "Brigade d'enquête et d'intervention" (Investigation and Intervention Division) and the "Brigade Mobile" (Mobile Division) Forwarding fee 225, &2012: 225,000 per 20 ; 350,000 per 40 71

72 Annex B.4: Import & procedures at Ouagarinter 2012 Process description Standard Average Comments Total Case 1: (Container) 426,150 29, Total Case 2: (Breakbulk) 279,650 29, GRAND TOTAL CASE 1 (Container): GRAND TOTAL CASE 2 (Breakbulk): USD USD hrs 12 hrs 13.7 hrs 11.7hrs 72

73 Annex B.4.2: OUAGARINTER CHANGES IN IMPORT PROCEDURES AND COSTS FROM 2008 TO Process description Average standard time (days) Observed average (days) Average standard time (days) Observed average (days) Comments GRAND TOTAL CASE 1 (Container): USD GRAND TOTAL CASE 2 (Breakbulk): USD Major changes that took place in Ouagarinter from 2008 to 2012 include: Introduction of the TCRB container handling fee for containerized cargo : XOF 125,000 per 20 / XOF 200,000 per % VAT Reduction in overall processing time from 6 days to about 3.5 days, eliminating need for payment of truck demurrage charges.

74 Annex C: OUAGADOUGOU-TEMA CORRIDOR (EXPORT) ANNEX C.1: EXPORT PROCEDURES AT OUAGARINTER (SOUTHBOUND CARGO) Process description 1 The shipper gives all documents to the forwarder to do the export declaration. These include the invoice, packing list, certificate of origin and, if necessary, phytosanitary certificate. 2 The forwarder goes to the customs office to enter the export declaration on the ASYCUDA customs IT system that displays the amount of the ASYCUDA tax payable to the customs cashier. -ASYCUDA tax : XOF 5,000 for one type of good and 1,000 per additional type of good + customs overtime: XOF 11, includes 2,530 FCFA for the Chamber of Commerce document 3 The cashier validates the payment online and issues a receipt. The forwarder returns to the customs ASYCUDA office to print the declaration and then sends it to the Garde Magasin (GM) along with Average standard time Observed average Average standard time Observed average 16, , , Comments

75 Annex C.1: Export procedures at Ouagarinter Process description export documents: invoice, packing list, certificate of origin. Average standard time Observed average Average standard time Observed average Comments 4 GM stamps its visa on the declaration and sends the file to the customs compliance officer who checks if all inputs in the ASYCUDA system are in line with the documents given by the forwarder, and if the file is validated online, manually registered and transferred to the head of customs for approval. 6 After being checked by the customs head, the file is sent back to the cashier who prints the final customs receipt for the forwarder. 7 The forwarder goes to the customs compliance officer with the final customs receipt to obtain the release note and proceeds to the customs officer who physically checks the cargo involved in the shipment and stamps the export declaration. 2012; Frais d Ecor XOF 6,120 8 After being registered at the customs inspection office, the forwarder gives the export 1, , (Possibility exists to pay a bribe to accelerate service)

76 Annex C.1: Export procedures at Ouagarinter Process description declaration and other documents to the driver who can leave for border. A customs escort is not needed. Average standard time Observed average Average standard time Observed average Comments Forwarding fee 2008 : XOF 50,000 per truck Forwarding fee 2012 : 50,000 52,500 XOF 52,500 per truck Totals 66, , (2 hrs) (5 hrs) (2 hrs) (3 hrs) GRAND TOTAL USD : hrs 5 hrs hrs 3 hrs 76

77 ANNEX C.2: ROAD TRANSPORT LEG BURKINA EXPORT (SOUTHBOUND CARGO) Annex C.2.1: TRUCKING PRICES 2008 AND 2012 BURKINA EXPORT (SOUTHBOUND CARGO) Comments Trucking rate Trucking rate Case 1 (Containerized): Case 1 (Containerized): Per truck : 800,000 XOF 800,000 Per truck : 800,000 XOF 800,000 Case 2 ( Breakbulk - per tonne ): Case 2 ( Breakbulk - per tonne ): Average Bulk per tonne : 16,500 XOF 280,500 Average Bulk per tonne : 16,500 XOF 280,500 (Assuming a 17 tonnes) (Assuming a 17 tonnes) TOTALS USD Case 1 (Container): 1,920 1,520 TOTALS USD Case 2 (Breakbulk): Bribes at checkpoints & borders (Factored into trucking price) Source: 8 th IRTG REPORT 33 Bribes at checkpoints & borders (Factored into trucking price) (21 st REPORT June-Sept 2012) 11

78 Annex C.2: Road Transport Leg - Southbound Cargo (Transit) Annex C.2.2: EXPORT PROCEDURES AT DAKOLA (SOUTHBOUND CARGO) Process description Standard time Observed average Standard time Observed average Comments 1 The driver enters the export parking lot and gives the documents (invoices, packing list, export declaration, cargo details notes) to the forwarder The border middleman registers the file at Garde Magasin who allocates a Garde Magasin exit file number. Customs overtime is paid. 3 After registration, the forwarder sends the file to the customs agent assigned to inspect the goods, who stamps the exit visa on the cargo detail notes. Charges are applied per truck 4 The forwarder gives all documents (packing list, invoice, export declaration, way bill, and customsstamped cargo detail notes) to the driver, who can cross the border to Paga in Ghana. Forwarding fee : 2008 : XOF 10,000 per truck 2012 : XOF 10,000 per truck 4, , ,000 10,000 Customs overtime fee increased The border closes at 6:00 pm; if the truck arrives after 3:00 pm, it will stay parked until the following day. 78

79 Annex C.2: Road Transport Leg - Southbound Cargo (Transit) Process description Standard time Observed average Standard time Observed average Comments Totals 14,682 4, (2hrs) 0 16,582 4, (2hrs) 0 GRAND TOTAL USD : hrs hrs 0 79

80 Annex C.2: Road Transport Leg - Southbound Cargo (Transit) Annex C.2.3: TRANSIT EXPORT PROCEDURES AT PAGA, (SOUTHBOUND CARGO) Process description (GHS) (Local Currency) Standard time (min) Observed average (min) (GHS) (Local Currency) Standar d time (min) Observed average (min) Comments 1 The driver gives the truck papers to the police (vehicle registration document, insurance documentation). The police issues a laissez passer with the driver's name. The driver goes through immigration controls with his passport. He takes the truck, goes to the export parking yard and gives all documents (invoice, packing list, Burkina Faso export declaration) to the forwarder GHS 29 (for non- Ghanaian trucks) N/A GHS 76 for non- Ghanaian trucks fee for laissez passer increased, for processing decreased significantly. 2 The forwarder prepares the manual declaration and gives all documents to customs. Customs agents physically check the vehicle for truck, container numbers, etc.) 3 Customs prepares the Trans 1 form. (In cases where the cargo is destined for the local Ghanaian market, customs makes a GCNet entry). No duties are charged for export cargoes in transit through Ghana. N/A N/A Delay depends on number of people waiting USD 200 N/A USD

81 Annex C.2: Road Transport Leg - Southbound Cargo (Transit) Process description Transit fee 200 USD per declaration (can be more than one truck) (GHS) (Local Currency) Standard time (min) Observed average (min) (GHS) (Local Currency) Standar d time (min) Observed average (min) Comments 4 Customs agents send the file to their compliance officer and then to the customs escort agents. USD USD Customs Escort fee: USD 65 per truck/day + GHS 20 per truck 2012: USD 65 per truck/day for 2 days 5 Truck leaves the border for Tema Convoy system in place causing s Forwarding fee : XOF XOF 2008 & 2012 : XOF 10,000 per truck 10,000 10,000 Totals USD XOF 10, (2.8hrs) 375 (6.3hrs) USD XOF 10, (3.3hrs) 405 (6.8 hrs) Fee and times for laisser passer procedures for non- Ghanaian trucks not included in total for 2008, also for 2012 GRAND TOTAL USD USD USD

82 ANNEX C.3: PROCEDURES & COSTS AT TEMA PORT (TRANSIT EXPORT) Process description (GHS) (GHS) Standard time (min) Observed average (min) (GHS) (GHS) Standard time (min) 1 Forwarder makes booking with shipping line Observed average (min) Comments 2 Goods arrive by truck in Tema in container at shipping- agency yard or in bulk at warehouse and are offloaded from the truck after customs checks details against the landing account. Offloading goods from a truck (if not containerized) is an additional GHS 10 in informal and takes up to 3 hours longer & USD 80 for loading gang charge Case 1 : Container Case 2 : Break-bulk USD 80 3 Forwarder prepares GCNet export declaration (required documents: Paga custom declaration, commercial invoice, certificate of origin and phyto-sanitary certificate, if applicable) USD

83 Annex C.3: Cargo procedures at Tema port (Transit Export) Process description 4 Forwarder presents the GCNet export declaration to customs to check compliance. 2012: Declaration is sent electronically to customs for vetting, and entry is assigned in system to customs examination officer for release. 2012: fee to forwarder associations GHS 3 5 Forwarder pays port handling to GPHA or MPS and customs endorses the release note upon proof of payment of port handling charges. 2008: Handling : GHS 20.35/20' and GHS 40.70/40' 2012: Handling : GHS 77.23/20 and GHS /40 6 The forwarder presents the customs release to the export department of the shipping line for approval to load cargo on nominated vessel. (GHS) (GHS) Standard time (min) Observed average (min) (GHS) (GHS) Standard time (min) Observed average (min) Comments Less standard time, more s and more informal fees. fees : GHS 5 - compliance GHS 30 - exam 83

84 Annex C.3: Cargo procedures at Tema port (Transit Export) Process description 7 When the vessel sails, the forwarder pays operational and administrative charges to shipping agencies. 2008: Lift on/lift off : 29.70/20' and 59.30/40' and yard-to-port transfer: USD 41.8/20' and USD 79.20/ 40'; Administrative: /20' and /40' 2012: Lift on/lift off : USD 60/20' and USD 120/40' and yard-toport transfer: USD 55/20' and 110/40 Administrative: USD 87.50/20' and /40' 8 The shipping line issues the bill of lading (2 working days after the vessel s departure). 9 The forwarder goes to the customs export department with the copy of the bill of lading to have the file approved in the GCNet system : This step not included (GHS) (GHS) Standard time (min) Observed average (min) 84 (GHS) (GHS) Standard time (min) Observed average (min) USD USD Comments

85 Annex C.3: Cargo procedures at Tema port (Transit Export) Process description (GHS) (GHS) Standard time (min) Observed average (min) (GHS) (GHS) Standard time (min) Observed average (min) Comments Forwarding fee 2008 : USD 120/150 per 20 / : USD 120/150 per 20 / TOTALS Case 1: Containerized GHS USD (7.8 hrs) 285 (4.8 hrs) GHS USD (4.4 hrs) 240 (4 hrs) Case 2: Break-bulk GHS USD (8.8 hrs) 345 (5.8 hrs) GHS USD (5.42 hrs) 390 (6.5 hrs) GRAND TOTALS USD Case 1: Container hrs 4.8 hrs hrs 4 hrs Case 2: Break-bulk hrs 4.8 hrs hrs 5.42 hrs 85

86 ANNEX D: OUAGADOUGOU BAMAKO SUB-CORRIDOR (MALI IMPORTS & EXPORT) Annex D.1: PROCEDURES AND COSTS IN TEMA PORT (TRANSIT IMPORT TO MALI) Tema port and procedures are the same for the Tema-Bamako and the Tema-Ouaga scenario with the few exceptions listed below Tema-Bamako port versus Tema-Ouaga port applies to both container and break-bulk scenarios Changes in Tema port (Bamako versus Ouagadougou) Currency Type of cost Description -12,500 XOF Payments to CBC and OTRAF - not applicable to Bamako traffic -13,000 XOF Burkina Chamber of Commerce PDM fee for 22t of cargo to Ouaga not applicable to Bamako traffic +9,000 XOF -13 USD Difference in Road fund Guarantee: Tema-Ouaga is USD 22 while Tema-Bamako is USD 9. The lower value for Bamako is due to the much lower value of the goods (USD 9,051 for textiles versus USD 22,000 for cooking oil Minus XOF 16,500 + Minus USD 13 Total in actual currency USD Total in USD

87 Annex D: Ouagadougou Bamako Sub-corridor (Mali Imports & Exports) Annex D.2: Load Type TRUCKING PRICES TRANSIT IMPORT TO BAMAKO March 2008 Load Type June 2009 Load Type Sept x20 (up to 15 tonnes) 1,700,000 1x20 (up to 19 tonnes) 2,200,000 1x20 (up to 19 tonnes) 1,800,000 2x20 (up to 35 tonnes) 2,600,000 2x20 (up to 28 tonnes) 2,200,000 2x20 (up to 33 tonnes) 2,600,000 1x40 (up to 30 tonnes) 2,200,000 1x40 (up to 28 tonnes) 2,200,000 1x40 2,200,000 Additional containerized cargo per tonne 50,000 Additional containerized cargo per tonne Bulk: Average per tonne 56,500 Bulk: Average per tonne 80,000 Bulk: Average per tonne 75,000 50,000 87

88 Annex D: Ouagadougou Bamako Sub-corridor (Mali Imports & Exports) Annex D.3: MALI IMPORT THROUGH TEMA PORT (NORTH & WEST BOUND CARGO) Annex D.2.1: FARAMANA (BURKINA BORDER WITH MALI) PROCEDURES FOR MALI IMPORT Process Description Standard time Average Comments 1 The documents (including the T1 declaration) are handed over to Customs by the escort officer, or by the driver if the truck is not obliged to travel in convoy Customs physically inspects the trucks 1, Customs audits the declaration in ASYCUDA++. Payment of the TS. Customs delivers a pass to the driver 30, Depends on the number of trucks waiting, computer connectivity and electricity supply issues 4 The driver crosses the border barrier with his pass 1, The Burkinabè Customs forwards the documents to the Malian Customs at Sona No need for a forwarding agent to cross the border One departure twice a day for Customs at 12 pm and 6 pm immediate forwarding of documents can be requested for a XOF 15,000 fee. Totals Parking fee is XOF 1000 per truck (always applicable) 30,000 2, GRAND TOTAL USD USD 57 USD hrs

89 Annex D: Ouagadougou Bamako Sub-corridor (Mali Imports & Exports) Annex D.2.2: KOURY (MALI BORDER WITH BURKINA) PROCEDURES FOR MALI IMPORT Process Description Standard time Average Comments 1 The forwarding agent retrieves the documents from the Burkinabè Customs to fill a Malian TRIE form 12, A new Malian TRIE (ISRT: interstate road transit) replaces the one from Burkina Faso: XOF 12,000 2 Electronic entering in ASYCUDA++ at Customs and printing of the T1 Customs declaration 5 10 The time spent depends on the number of items. If the items are of the same nature, the process is fast. 3 Payment of the FGR 10, The T1 declaration is taken to the scanning office Scanning by order of arrival of T TS XOF 10,000 + payment of Road Warranty fund : 0.25% of the CIF value The T1 Declaration has to be submitted to the scanning office to await its turn Time spent depends on the queue and on the fact that the forwarding agents can dispute the results of the scanning 6 Forwarding of the scanning result to the Brigade Chief for his/her signature 30, The Brigade Chief authorizes the truck to leave in case they are no suspicions. 7 Retrieval of scanning results/the truck leaves 5 10 Each forwarding agent retrieves his/her documents to hand them over to the driver who is now free to leave. TOTALS 22,000 30, GRAND TOTAL (USD) USD 41.8 USD hrs 5.8 hrs 89

90 Annex D: Ouagadougou Bamako Sub-corridor (Mali Imports & Exports) Annex D.2.3: FALADIE (BAMAKO TRUCK TERMINAL) PROCEDURES FOR MALI IMPORT Procedure Standard time Average Comments 1 Truck is weighed 6, Depends on the queue 2 Verification of transport documents 22, XOF 1,000/tonne 3 Retrieval of the T1 declaration and ISRT logbook for entry of the declaration into ASYCUDA To prepare the Declaration 4 Entry of customs declaration into ASYCUDA ++ 15, Except for connectivity issues which can the process, capturing the declaration is fast. The XOF 5,000 represent the electronic charges and the XOF 10,000 is the amount of the Customs TS 5 Deposit of the declaration for assessment of duties/changes 10, XOF 10,000 informal fees are paid to speed up the process 6 Physical inspection of the goods 5, Payment of informal fees to speed up the process 7 Statement of payments due 5, Payment of customs duties to treasury Delivery note (Bon à enlever - BAE) 10, Weighing of truck 6, Totals 49,000 30, GRAND TOTAL USD USD 93.1 USD 57 4 hrs 7.5 hrs If there are no connectivity issues, it usually takes between 1 and 2 hours maximum. The Treasury is represented at the Faladie Customs office. The queue can be long. Some Customs service take advantage of the truck leaving the port to squeeze money from the drivers (between XOF 5,000 and 10,000 per truck (CHECK POSITION OF THIS STEP) Depends on the queue, weighing fee. Note: in the table exclude customs duties, and 1,00OFCFA per tonne as import levy to SDV on behalf of customs. 90

91 Annex D: Ouagadougou Bamako Sub-corridor (Mali Imports & Exports) Annex D.4: MALI EXPORT THROUGH TEMA PORT (EAST & SOUTH BOUND CARGO) Annex D.3.1: FALADIE (BAMAKO TRUCK TERMINAL) PROCEDURES FOR MALI EXPORT Process Description Standard time Average Comments 1 Entry of the Export Declaration in SYDONIA 15, Inspection of the goods 5, Electronic charges of XOF 5,000 and XOF 10,000 of Customs TS Exporting is encouraged by Customs. However some officers find ways to demand XOF 5,000 for the physical inspection of the goods Total 15,000 5, Grand Total (USD) hrs 0.4 hrs Annex D.3.2: KOURY (MALI BORDER WITH BURKINA) PROCEDURES FOR MALI EXPORT Process Description Standard time Average Comments 1 Registration of the truck with the E1 Export Declaration, the purchase invoice and the packing list 10,000 5, The intervention of a forwarding agent is not necessary. Payment of a TS to Customs (XOF 10,000) and informal (XOF 5,000) Total 10,000 5, GRAND TOTAL (USD) hrs 91

92 Annex D: Ouagadougou Bamako Sub-corridor (Mali Imports & Exports) Annex D.3.3: FARAMANA (BURKINA BORDER WITH MALI) PROCEDURES FOR MALI EXPORT Process Description Standard time average Comments 1 The forwarding agent fills the load status the forwarding agent performs the pre-declaration in ASYCUDA++ in the designated computer at the Customs office Possible in case of rush (only 1 computer available) and generator issues With the load status, the forwarding agent proceeds to the writing section of Customs. Customs delivers the bulk manifest and assigns a registration number. With this number, the forwarding agent validates his/her declaration in SYDONIA++. The name of the auditor appears. The forwarding agent hands the documents of the goods (invoice, packing list, load status and export declaration from Mali) to the auditors who certify the value of the goods. Printing of the Declaration and payment of charges: Electronic charges XOF 5,000 + XOF 1,000 per type of additional item + printout from Chamber of Commerce XOF 2,530 +Guarantee Fund 0.25% of the value in Customs + TS Customs : XOF 9,100 Purchase of the vet audit or phyto-sanitary bulletin, if applicable. Based on tariff The auditor prints the Declaration and hands it over to the forwarding agent in charge of organizing the escorts Organization and departure of the escort: XOF 20,000/truck. There is one departure per day to Bobo-Dioulasso but not after 4.30 pm. 15, , ,710 3, , Total 16,710 29, GRAND TOTAL (USD) USD 31.8 USD hrs 2.4 hrs Bribes: XOF /truck for the Office chief and XOF 5,000/truck for the customs officer- electricity supply issues can the process Bribes: XOF 10,000/truck for the auditor who usually has up to 72 hrs to finalize the case. Note : No escort for containers and selected products (vehicles, metallurgical goods, salt, cement, rice, medications, fresh food, donations) 92

93 ANNEX E: REVISION TO THE 2010 TEMA-OUAGA CORRIDOR DATA ANNEX E.1: INTRODUCTION In order to be able to compare the data collected in 2008 (published in 2010) with the data collected in 2012 we had to make a number of revisions to the 2010 data. The general revisions are explained below while the detailed revision to each scenario is presented in the sections that follow. Total Costs The initial Tema-Ouagadougou report (2010) considered different cargoes for the container door-to-door container scenario: (i) textiles, 18t, USD 9,051 for import and (ii) shea, 17t, USD 8,500, and (iii) cashew, 16t, USD 95,200, for export of 20 containers, while (iv) cooking oil, 22 MT, USD 22,000 was used in the break-bulk scenario. For ease of comparison and trend analysis cooking oil is now used for all import scenarios and shea nuts for all export scenarios. The 2008 cost numbers were revised accordingly. This has had the effect of increasing specific for containerized cargo that were based on cargo weight or value, for example the PMD tax in Tema port and Ouagarinter. Transport prices in the original Tema-Ouaga report for containerized cargo were based on the assumption of two containers carried simultaneously on a truck. Current analysis is based on a single container per truck. This results in a significant increase in the road transport charge. This also applies to export Forwarding fees in Tema (import): Reduced from 281 USD (GIFF 2007 indicative tariff) to 135 USD (average according to interviews with various freight forwarders). Forwarding fee in Tema (export) has been reduced from 347 USD (which was forwarding charge quoted in XOF, less shipping administration fee, customs and port charges) to USD 120 being average from interviews with forwarders. Average escort fee was increased from 60 GHC per container to 117 GHC per container according to the Customs Harmonised System and Tariff Schedule which is 65 USD per truck/day. Road Transport Tema-Ouaga: The Coxeur fee, the checkpoint bribes, the laisser passer fee at Dakola are now excluded from total because they are included in the transport price. The Coxeur fee has also been also excluded from informal, even though it is not receipted, since they actually provide a service asked and paid for voluntarily and therefore not illicit. Fond de Garantie (FGR) fees were previously classified as a tax and excluded from totals, this is now included and added to total (2008: USD 22 in Tema and USD 55 in Dakola). Standard Times and Delays Road Transport leg standard times and s in the previous corridor studies were based on averages obtained from interviews with stakeholders. Numbers used in the current comparison are based on data sheets filled by drivers in the road governance initiative. Average travel time has been used to represent standard time and standard deviation is used to represent the average. Other standard times and s are based on the aggregate of times recorded in the summary tables as obtained from interviews with stakeholders capturing all procedures in the clearance process.

94 Annex E: Revisions to the 2010 Tema-Ouaga Corridor Study Data The 2010 Tema-Ouaga corridor report attempted to separate standard times and s for the difference actors such as port, customs, trucking and forwarding as well as by transport leg. This led to some incidences of double counting. In the current report we only break down cost and times by transport leg, i.e. port, trucking and inland terminal. ANNEX E.2: REVISION TO THE 2008 CORRIDOR COST & TIME DATA The section below reviews in detail the revision that was made to the 2008 data for both and time for all scenarios. It should be noted that certain differences in formal and informal between the original 2008 data and the revised 2008 data are difficult to trace because some computations were not well defined in the 2010 report. Note: Delays are equal to Total time minus Standard processing time Import Scenario 1: One 20 container (TEU), door to door Total ( in bracket) Standard & Total time (including s) Total ( in bracket) Standard & Total time (including s) PORT (USD) (days) (USD) (days) Grand TOTAL revised Container (import) 4,444 (267) ,058 (125) Change %(-53%) -15%& 11% As reported in the 2010 Tema-Ouaga study 4,275 (384) Differences: Revised minus original numbers +169 (-117) -3.0 / -3.1 Import scenario 1.A: Revisions to the 2008 Change (USD) Type of Description +288 Increase in load from 18t to XOF 30,000 (USD 72) per tonne +72 Customs bond fees included in the revised total cost PMD fees increased with tonnage Eliminating double counting in the transport price Total formal +169 Difference between revised and original numbers Unexplained difference -143 Removing the Coxeur fee from informal -143 Total informal -117 Difference between revised and original numbers +26 Unexplained difference 94

95 Annex E: Revisions to the 2010 Tema-Ouaga Corridor Study Data Import scenario 1.B: Revisions to the 2008 time & s Change (days) Type of time Description Standard Basic scenario changed from stripped container to door-to-door -0.6 Standard Road transport time Standard Double counting of port processing time (shipping lines and customs) -3.0 Total change in standard time -3.0 Difference between revised and original numbers 0 Unexplained difference -1.5 Delay Double counting of port processing time (shipping lines and customs) +0.6 Delay Road transport time -0.9 Total change in s -0.1 Difference between revised and original numbers +0.8 Unexplained difference Import Scenario 2: One 20 container (TEU), break-bulk to Ouagadougou Total ( in bracket) Standard & Total time (including s) Total ( in bracket) Standard & Total time (including s) PORT (USD) (days) (USD) (days) Grand TOTAL revised Breakbulk (import) 4,741 (282) ,281 (131) Change -9%(-54%) -15%& 8% As reported in the 2010 Tema-Ouaga study 4,804 (399) Differences: Revised minus original numbers -63 (-117) -2.1 /

96 Annex E: Revisions to the 2010 Tema-Ouaga Corridor Study Data Import scenario 2.A: Revisions to the 2008 Change (USD) Type of Description +72 Customs bond fees included in the revised total cost PMD fees increased with tonnage Eliminating double counting in the transport price Total formal -63 Difference between revised and original numbers +15 Unexplained difference -143 Removing the Coxeur fee from informal -143 Total informal -117 Difference between revised and original numbers +26 Unexplained difference Import scenario 2.B: Revisions to the 2008 time & s: IMPORT - One 20 container (TEU), break-bulk Change (days) Type of time Description -0.6 Standard Road transport time Standard Double counting of port processing time (shipping lines and customs) Total change in standard time -2.1 Difference between revised and original numbers Unexplained difference -1.5 Delay Double counting of port processing time (shipping lines and customs) +0.6 Delay Road transport time -0.9 Total change in s -0.9 Difference between revised and original numbers 0 Unexplained difference 96

97 Annex E: Revisions to the 2010 Tema-Ouaga Corridor Study Data Export Scenario 1: One TEU), door to door, from Ouagadougou to Tema OUAGARINTER Total ( in bracket) (USD) Standard & Total time (including s) (days) Total ( in bracket) (USD) Standard & Total time (including s) (days) Grand TOTAL revised Container (export) 2,808 (32) ,451 (39) Change -13% (+30%) +6% & -41% As reported in the 2010 Tema-Ouaga study 1,755 (66) Differences: Revised minus original numbers +1,053 (-34) -2.5 /-0.3 Export scenario 1.A: Revisions to the 2008 Change (USD) Type of Description Escort fee increased from 60 GHS to 117 GHS as per customs tariff -227 Tema Forwarding fee changed from GIFF tariff to forwarder average +960 Trucking charges now based on one cntr per truck instead of two ,076 Total formal All other fees based on one container per truck instead of two (forwarding fees ouaga (60), Ouagarinter declaration (19),Dakola procedures(18), Paga fees (180) Difference between revised and original numbers Unexplained difference -33 Removing the IRTG fee from informal Total informal Difference between revised and original numbers Unexplained difference Export scenario 1.B: Revisions to the 2008 time & s Change (days) Type of time Description -2.0 Standard Road Transport -2.0 Total change in standard time -2.5 Difference between revised and original numbers -0.5 Unexplained difference -0.4 Delay Road Transport -0.4 Total change in s -0.3 Difference between revised and original numbers +0.1 Unexplained difference 97

98 Annex E: Revisions to the 2010 Tema-Ouaga Corridor Study Data Export Scenario 2: One 20 container (TEU), break-bulk from Ouaga to Tema Total ( in bracket) Standard & Total time (including s) Total ( in bracket) Standard & Total time (including s) OUAGARINTER (USD) (days) (USD) (days) Grand TOTAL revised Breakbulk (export) 1,646 (43) ,549 (45) As reported in the 2010 Tema-Ouaga study (half of 2x20 container/break-bulk) Change -6% (+5%) +6% & -33% 1,934 (64) Differences: Revised minus original numbers (-21) -2.4 / -2.7 Export scenario 2.A: Revisions to the 2008 Change (USD) Type of Description -365 Trucking fee reduced from USD 1038 per cntr (half of full truck cost ) to 673 ( cost per tonne X 17 MT) Total formal -288 Difference between revised and original numbers -77 Unexplained difference -33 Removing the IRTG fee from informal -33 Total informal -21 Difference between revised and original numbers -12 Unexplained difference Export scenario 2.B: Revisions to the 2008 time & s Change (days) Type of time Description -2.0 Standard Road Transport -2.0 Total change in standard time -2.4 Difference between revised and original numbers 0.4 Unexplained difference -0.4 Delay Road Transport -0.4 Total change in s -0.3 Difference between revised and original numbers +0.1 Unexplained difference 98

99 Annex E: Revisions to the 2010 Tema-Ouaga Corridor Study Data ANNEX E.3: REVISION TO THE 2010 NORTH AMERICAN BENCH MARKING DATA While preparing an update of the Tema-Ouagadougou corridor report, the North America-West Africa transport comparison was also reviewed and we found that the 2010 comparison did not always compare likes with likes. The data for North America were obtained from Maersk and it was realized that comparable U.S. import and export land transport were underestimated. The comparison cited the Maersk quoted inland haulage fee of USD 654, and export haulage of USD 765, but consultations with Maersk revealed that additional should have been included. Tema Ouagadougou import for the purpose of comparison on the other hand were overestimated because they included the of clearing the goods in Ouagadougou while Maersk s data did not include clearance. The tables below explain the adjustments made for US imports and exports: US Imports - 1x20 container Newark to Chicago) (USD) Transit time (days) As reported in the original Tema-Ouaga study (2010) As reported in the current analysis (2012) 1,339 5 Differences: Revised minus original numbers Changes in Change (USD) Type of Description +5 Port security surcharge +390 Handling charges at destination Import fuel surcharge +90 Equipment management fee +5 Port security surcharge +685 Total formal +685 Difference between revised and original numbers - Unexplained difference Import fuel surcharges (USD 200); port security surcharge (USD 5); handling charges at destination (USD 390); and equipment management fee (USD 90) 99

100 Annex E: Revisions to the 2010 Tema-Ouaga Corridor Study Data US Exports - 1x20 container Chicago to Newark (USD) Transit time (days) As reported in original 2010 Tema-Ouaga study (2010) As reported in the current analysis (2012) Differences: Revised minus original numbers Changes in Change Type of (USD) Description 200 Export fuel surcharge 90 Equipment management fee 5 Port security surcharge +295 Total formal +295 Difference between revised and original numbers - Unexplained difference Change Type of (days) time Description -0.5 Standard Rounding error -0.5 Total change in standard time -0.5 Difference between revised and original numbers - Unexplained difference WEST AFRICA COSTS AND TRANSIT TIMES REVISED Imports (Tema-Ouagadougou) The import /s have been updated for 1x20 foot containerized cargo as per revised figures in the current analysis. However the and time spent at final destination (Ouagarinte) have not been included as this has no corresponding cost/time in the US scenario. As such this component is removed from the revised Tema-Ouagadougou import cost for a more accurate comparison: Discounting Ouagarinter and s from Tema- Ouaga and standard time/s Costs: USD 4,444 USD 1,184 = USD 3,260 Standard Time /Delays: (11-18) days (3-3) days = 8 15 days Exports (Ouagadougou- Tema) Export /s have also been updated as per revised figures in the current report. The number is comparable to US exports as shipping line quote includes port processing charges at Newark Costs: USD 2,808 Standard Time/Delays: 3-6 days 100

101 ANNEX F: TRAVEL TIME, TRUCK UTILIZATION & BORDER CROSSINGS ANNEX F.1: TRUCK TRAVEL TIMES AND DELAYS ON THE TEMA-OUAGA-BAMAKO CORRIDOR Import Tema-Ouaga 2008 Import Tema-Ouaga 2012 Distribution of travel time on Tema-Ouaga corridor Number of trucks Number of days Average: 3.8; Median: 3.0; Std. deviation: 1.7 days Distribution of travel time on Tema-Ouaga corridor Number of trucks Number of days Average: 4.3; Median: 4.0; Std. deviation: 1.4 days Export Tema-Ouaga 2008 Export Tema-Ouaga 2012 Distribution of travel time on Ouaga-Tema corridor Number of trucks Number of days Average: 2.0; Median: 2.0; Std. deviation: 1.2 days Distribution of travel time on Ouaga-Tema corridor Number of trucks Number of days Average: 2.6; Median: 3.0; Std. deviation: 0.5 days Import Ouaga-Bamako 2012 Import Ouaga-Bamako 2012 Distribution of travel time on Ouaga-Bamako via Koury corridor Number of trucks Number of days Average: 3.3; Median: 3.0; Std. deviation: 0.7 days Distribution of travel time on Ouaga-Bamako via Heremakono corridor Number of trucks Number of days Average: 3.2; Median: 3.0; Std. deviation: 0.7 days

102 Annex F: Travel Time Distribution, Truck Utilization & Border Crossings Export Bamako-Ouaga 2012 Export Bamako-Ouaga 2008 Distribution of travel time on Bamako-Ouaga via Koury corridor Number of trucks Number of days Distribution of travel time on Bamako-Ouaga via Heremakono corridor Number of trucks 50 Average: 4.0; Median: 4.0; Std. deviation: 1.3 days Average: 3.9; Median: 4.0; Std. deviation: 1.6 days Source: Data from the UEMOA/Trade Hub Road Governance Initiative (OPA) Number of days ANNEX F.2: TRUCK UTILIZATION TEMA-OUAGA-BAMAKO CORRIDOR Ouaga-Bamako via Hérémakono Bamako-Ouaga via Hérémakono Ouaga-Bamako via Koury Bamako-Ouaga via Koury Nombre de jours Attente entre le déchargement précédent et le chargement Attente entre le chargement et le départ Temps de voyage Attente avant le déchargement à l'arrivée Source: Data from the UEMOA/Trade Hub Road Governance Initiative (OPA) 102

103 Annex F: Travel Time Distribution, Truck Utilization & Border Crossings ANNEX F.3: BORDER CROSSING TIMES A. Stakeholder data from focus groups and interviews: 2008 (hrs) 2012 (hrs) Import Border Crossing at Paga Border Crossing at Dakola Border Crossings at Faramana & Koury Total borders Tema-Bamako (hrs) 2012 (hrs) Export Border Crossing at Dakola Border Crossing at Paga Border Crossings at Koury & Faramana 0.5 Total borders Tema-Bamako B. Road governance (OPA) data Import Tema-Ouaga Export Tema-Ouaga 103

104 Annex F: Travel Time Distribution, Truck Utilization & Border Crossings Import Burkina-Mali via Koury Export Burkina-Mali via Koury C. BORDER crossing dwell times at Paga, Dakola and Ouagarinter (By the Trade Hub Business Environment Team) The data in the table below are average dwell times, from when a truck parks at a border (or Ouagarinter) to the time it leaves/crosses the border. The times are measured on a 24 hour scale and represent the average time for 15 outbound trucks and 15 inbound trucks per survey with no distinction made between transit trucks and trucks involved in bilateral regional trade. Center Date Survey #1 Survey #2 Outbound Inbound Outbound (hrs) (hrs) Date (hrs) 104 Inbound (hrs) Paga August :26 7:21 February :34 6:25 Dakola September :41 35:29 February :38 14:47 Ouagarinter November :14 February :30 In Paga, export times slightly increased. I couldn t get a hold of any reason why this was the case. Most likely it was sample variation, since more trucks arrived later in the day and had to wait to be processed on the next day. In Dakola there was a significant decrease in import times. This stemmed largely from improved connectivity of customs computers running the ASYCUDA clearance systems. Connectivity problems caused large s during the baseline survey. There is still room to improve connectivity in Dakola, as well as the need to increase the number of computers operated by Customs in order to further improve clearance times. The BIC is looking to address these issues. In Ouagarinter there was also a significant decrease in import times. This stemmed partly from Burkina customs ending a procedure requiring clearing agents to retrieve documents from the Customs head office in Ouaga. Some of the change may also stem from sampling errors, as there was a higher percentage of trucks using bigger clearing agencies than in the first survey.