Zambia @2023: A Transport & Logistics Event

Discussing Efficient Border Management In A Simplified Trade Regime

This panel discussion was moderated by Dr Emmanuel Sampa, Assistant Director (Road and Rail), in the MTL and the panellists were:

1. Mr Lawrence Mwalye, Principal Economist in the Ministry of Commerce, Trade and Industry (MCTI)

2. Mr Eric Shimumbwe, Trade Facilitation Coordinator at the Walvis Bay Corridor Group (WBCG)

3. Mr Afolabi Obisesan, Senior Manager (Specialised Finance) at the African Export-Import Bank (Afreximbank), Cairo, Egypt

The panel discussion was based on questions from the moderator and additional questions from the delegates and these were:

• Focusing on inter-agency coordination, what are the requirements for efficient border management?

Zambia has been a member of the World Trade Organisation (WTO) since 1995 and signed the WTO Trade Facilitation Agreement (TFA) in 2015. This instituted and resulted in a series of trade facilitation reforms in Zambia, beginning with the formulation of an appropriate legal framework i.e. the Border Management and Trade Facilitation Act No.12 of 2018. This law is aimed at reducing the amount of time traders spend at the border. Inter-agency collaboration is key to enable trade facilitation. The lead agency in inter-agency collaboration and coordination is responsible for constituting Joint Border Committees (JBCs) in order to address challenges in a coordinated manner. The Border Security Committee (BSC) is responsible for ensuring that there is adequate security at the border or at border posts. At national level, the National Trade Facilitation

Committee (NTFC) comprises membership of several border management and trade facilitation institutions and is chaired by the Secretary to the Cabinet (SC). The SC is the most senior civil servant hence coordination is done at the highest level of Government. The Technical Committee (TC) is chaired by the Permanent Secretary (PS) in the Ministry of Commerce, Trade and Industry (MCTI) and cochaired by the Commissioner General (CG) for the Zambia Revenue Authority (ZRA). The NTFC is also supported by a Secretariat which coordinates and anchors activities of the Steering Committee (SC) and Technical Committee (TC). Hence the NTFC governance framework is in place and operational (addresses border management and trade facilitation issues using a coordinated approach at various levels of governance). It is important that both hard and soft border infrastructure gaps are addressed. Border infrastructure should be adequate. Soft infrastructure requires that there is a coordinated approach to border management and trade facilitation: customs, immigration, agriculture, health, standards, security etc. Hence there is need for a single window. There is need to ride on digital technology for pre-clearance, corridor monitoring, Time Release Studies (TRS), corridor observatories etc in order to pinpoint inefficiencies (in line with best practices such as experiences of Covid-19). Innovative processes, coordinated digital and electronic processes etc will ensure that delays are addressed etc (innovative issuance permits etc)

• What are the requirements of physical infrastructure such as physical One-Stop Border Post (OSBP) or TwoStop Border Post (TSBP)? Soft infrastructure is required for trade facilitation for not only goods being transported to their destination, but also for goods in transit. This ought to be effectively monitored by revenue authorities. There is need for acceptability of the transit mode or transit points. This should be able to reduce the time spent on or at the border by goods in transit. Hence there is need for revenue authorities to issue one transit bond which is acceptable to all other revenue authorities in the region in order to reduce the cost of doing business. Afreximbank has positioned itself to assist Governments in addressing this challenge in order to facilitate trade and thus reduce the cost of doing business

• Are there initiatives the Government of the Republic of Zambia (GRZ) is currently undertaking or implementing to enhance border management efficiencies? The OSBP requires appropriate infrastructure in both adjoining states (Zambia and the neighbouring country). The infrastructure should be able to accommodate authorities from both states (Zambia and the neighbouring country) in order to facilitate export and import trade. There are four (4) OSBPs in Zambia: Chirundu, Kazungula, Mwami and Nakonde. The Chirundu OSBP requires upgrades and improvements to its infrastructure. The existing infrastructure does not support full OSBP operations. On the other hand, the Kazungula OSBP has modern supportive infrastructure hence most of the traffic has diverted from Chirundu to Kazungula.

Kasumbalesa is a traditional TSBP. It experiences a lot of challenges as a result of existing infrastructure such as perennial traffic congestion: at the border and along road from Chililabombwe to the border. The Government has taken note and initiatives are currently underway to address these shortcomings and challenges. The Government has adopted the Public-Private Partnerships (PPP) approach to address and upgrade infrastructure. And in order to address soft infrastructure challenges, the Government is pursuing development and implementation of a National Electronic Single Window (NESW) which will improve coordination among the various border agencies and their respective interaction with exporters and importers. Further, plans to introduce a one-payment system via ZRA are underway. The ZRA will be collecting a range of fees on behalf of other border agencies. The Government has conducted a number of Time Release Studies (TRS) or Time Measurement Studies (TMS) which outline various challenges and inform appropriate measures and interventions. Recently a TRS was done at the Kazungula OSBP and the results will be available before the end of 2023. Similar studies have previously been done for Chirundu, Mwami and Nakonde OSBPs. The TRS or TMS are aimed at enhancing transparency and sharing challenges experienced at the borders (and also to inform appropriate actions)

• What are the minimum border requirements to make it run more efficiently? What should be done to the legal framework to make it more enabling? The apex law is the Border Management and Trade Facilitation Act No.12 of 2018. However, once a border post or TSBP transitions into a OSBP, it requires that there is an agreement between Governments of both adjoining states (Zambia and the neighbouring country). There are plans and considerations to upgrade Chanida, Kasumbalesa and Katima Mulilo TSBPs to OSBPs

• Why is it relevant to have a corridor management institution for the efficient management of borders? It is imperative to have a central coordinating unit which is independent of external interference, and which should be able to identify challenges and trade barriers along the transport corridor and at the border. Without corridor management institutions, needs for small-scale traders or SME businesses might not be catered for effectively. Infrastructural deficits are huge (especially road infrastructure). Poor road infrastructure impacts the turnaround time and thus leads to deficiencies. There are various Zambia Police (ZP) checkpoints where police officers ask for the same documentation. There is need to eliminate such trade barriers (hence the need for a corridor management institution). There are also visa requirements and excessive transit fees etc. There is need to streamline and harmonise such issues and requirements. Corridor management institutions identify challenges and trade barriers that corridor authorities and Governments ought to address. The costs associated with such inefficiencies are normally passed on to the enduser or consumer. During the Covid-19 period, there were various practices at different borders such as social distancing, testing requirements etc. Trade flows suffered as a result. Corridor management institutions are advocating for 24-hour border operations at Kasumbalesa Border Post assuming security concerns and issues are addressed.

• Are there opportunities that could be exploited to enhance and make border operations and activities more effective and efficient?

One of the biggest barriers to effective and efficient border operations is the lack of transit bond. Therefore, RECs could play a major role in ensuring that acceptable transit bonds to all Member State revenue authorities are issued. But Zambia is not currently implementing the Region Customs Transit Guarantee (RCTG) Scheme. There is need for flexibility to enable the use of such a bond in countries where the truck is transiting before reaching its destination in order to reduce the cost of doing business. The intention or purpose is to ensure that the Guarantee Scheme is acceptable in the region.

• There are two (2) electronic single windows both of which are currently not working. Pre-Covid-19, only one (1) was non-functional. The private sector and / or users were subjected to training in readiness for the launch of both of these single windows, but nothing has come out of this. What are the delays to operationalise this? Zambia Revenue Authority (ZRA)? Ministry of Agriculture (MoA) and Ministry of Fisheries and Livestock (MFL)?

The NESW which is supposed to connect all border agencies in order to institute online clearance processes has already been developed. However, only a few border agencies are connected to this platform. Essentially, this is due to the lack of appropriate IT equipment. So the Government is looking at how best to equip all the border agencies. The Secretary to the Cabinet (SC) gave a directive to ensure implementation of reforms is fast-tracked and completed before the end of 2023. Progress will be reviewed in June 2023.

Piloting, roll-out and full implementation of the electronic Certificate of Origin (E-CoO) is also being explored. COMESA is currently piloting the digital Rules of Origin (RoO) system in 15 Member States before it is fully-rolled out. Implementation of the E-CoO is well-advanced in SADC Member States.

• Queues at the Kasumbalesa Border Post are normally in excess of 6 km. What is Zambia, in collaboration with DR Congo, doing to address this perennial problem?

On Monday 6th March 2023, the Minister of Commerce, Trade and Industry, Hon.

Chipoka Mulenga met with his DR Congo counterpart, Minister of Economy, Trade and Industry Hon. Antoinette N’samba Kalambayi to discuss, deliberate and address congestion issues at the Kasumbalesa TSBP and the possibility of establishing a OSBP. Before the OSBP is established and launched, authorities directed border agencies to commence 24-hour operations: clearance and acquitting of documentation as well as release of trucks. The road infrastructure is also being worked on to address border congestion issues. The DR Congo does not have a relevant law to fasttrack the establishment of a OSBP hence there is need for strong political-will to facilitate the development of appropriate legal framework. The legal framework should be the basis for the creation of the Kasumbalesa OSBP. The other challenge is the mismatch of procedures and processes between Zambian and Congolese authorities at the Kasumbalesa TSBP. The streamlining and harmonisation of these procedures and processes will enhance clearing and processing efficiencies. Goods entering Zambia are pre-cleared. However, this is not possible with DR Congo. Despite bilateral agreements between Zambia and DR Congo, there has been no effective implementation of the pre-clearance facility. Challenges at the Kasumbalesa Border Post are well-documented and yet implementation of proposed and agreed measures and reforms remains a great challenge. The Concession Agreement between the GRZ and the Zambian IP Border Crossing Company (ZIPBCC) was terminated on Friday 3rd March 2023.

• There are remarkable changes at borders in Zambia, despite ongoing challenges. Are there measures and reforms that will be implemented to address these challenges?

Construction of infrastructure at the Sakania Border Post in Ndola via a PPP arrangement using the Build, Operate and Transfer (BOT) mechanism is currently underway and is at an advanced stage. The process will be finalised soon. Reforms and measures are aimed at addressing shortcomings to the NESW (improving connectivity and migrating from TSBPs to OSBPs).

The Walvis Bay Corridor Group (WBCG) provides platforms for dialogue among stakeholders to facilitate exchange. It has an active WhatsApp group which facilitates the real time solving of challenges faced by transporters, logistics companies, customs brokers etc. It also provides wellness clinics (sponsored by partners such as SADC) to address various issues that affect truckers. The WBCG also conducts advocacy for infrastructure development and policy reforms. Afreximbank works closely with RECs in addressing various challenges being faced in the area of trade flows. It also works with insurance companies who are providers of insurance or issue transit bonds through the Regional Customs Transit Guarantee (RCTG) Scheme. It is also involved in advocacy with revenue authorities and other stakeholders in the value-chain. Afreximbank also supports the implementation of the Electronic Cargo Tracking System (ECTS) for effective border management