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REDUCING TRANSIT COSTS THROUGH IMPLEMENTATION OF ONE STOP BORDER POST (OSBP) CONCEPT – THE CASE OF BUSIA KENYA/UGANDA OSBP Background and context. Trade and Transport costs in East Africa (EA) are amongst the highest in the world according to the Doing Business and the Logiscs Performance Indicator report series of the World Bank. These are largely aributed to bureaucracies in documentaon of trade in goods, uncoordinated goods inspecon processes by border agencies as well as the mulple steps involved in the clearance of goods across borders. These impede the region’s ability to trade compevely in the internaonal market. In parcular, the me taken to get to and from the ports to land locked countries is singled out as a major factor. In East Africa investments in border hard and soſt infrastructure including physical buildings, adopon of Informaon Communicaon Technology soluons in border management and establishment of joint border management commiees has resulted in one stop controls and led to reduced me for cargo to transit through the main corridors and to cross borders thus enhancing the region’s interconnectedness in trade. The One Stop Border Post (OSBP) concept According to the OSBP Source Book (2016) , the concept refers to the legal and instuonal framework, facilies, and associated procedures that enable goods, people, and vehicles to stop in a single facility to undergo necessary controls following applicable regional and naonal laws to exit one state and enter the adjoining state. It promotes a coordinated and integrated approach to facilitang trade, the movement of people, and improving security. The concept eliminates the need for travellers and goods to stop twice to undertake border crossing formalies. It is one of the trade facilitaon tools recommended by the WTO Trade Facilitaon Agreement under Arcle 8 of the agreement. In 2010 TradeMark East Africa (TMEA) partnered with the East Africa Community Secretariat and its Partner States to establish and operaonalise 13 One Stop Border and adopt Integrated Border Management Systems. The OSBPs are implemented jointly with the EAC Secretariat and OSBPs Lead Agencies, in collaboraon with all the Government border agencies (Ministries, Departments and Agencies). To steer the OSBP establishment process, a governance framework in the form of Naonal OSBPs Steering Commiees and Joint Border Commiees were set up. On the other hand, bilateral agreements to operaonalise the OSBP arrangement were signed by adjoining Partner States. Later it was found necessary to adopt a regional wide legal instrument to regulate OSBP operaons and in this regard and working with other development partners like JICA, an EAC OSBPs Act and regulaons were adopted. The Busia OSBP The Busia border is located in Busia County, in Kenya’s Western Province, approximately 431 km, by road, west of Nairobi, Kenya’s capital and largest city. In Uganda, it is adjacent to the similarly named town of Busia in the Eastern Part of Uganda approximately 202 km, by road, east of Kampala, the capital and largest city of Uganda. Busia border happens to be one of the busiest in East Africa handling transit to and from Great Lakes region of Rwanda, Burundi, DRC and South Sudan. Based on recent TMEA independent Time and Traffic Survey , total weekly traffic count Busia Kenya is 3324 vehicles and 1784 for Busia Uganda. Most importantly, this border handles the largest number of informal cross border traders in the EAC. Why Busia was considered for an OSBP development. Given its strategic locaon, volume of traffic and economic importance of the Border to both Kenya and Uganda, it was found fing to improve its trade infrastructure. In 2011, the me to cross the border was variable taking between one hour and 26 minutes to 14 hours and 20 minutes. Kenya and Uganda agencies operated independently requiring goods, people and vehicles to stop twice at both sides of the border. Intra and inter border agency cooperaon was non-existent. Even though East African community had progressed by establishing a Customs Union in 2005, there existed no framework for Partner states to clear goods at first port of entry and allow deployment of staff and systems that would fast-track clearance of goods. This meant issuance of bond guarantees to secure revenue of respecve country and therefore mulple documentaon and inspecon of cargo at every border crossing. This in turn led to a lot of delays increasing costs for traders. To small cross traders 70% of whom are women, the problems were even more insurmountable. Prior to the operaonalisaon of the Busia OSBP, a number of challenges faced informal cross border trades including lack of knowledge of trade regulaons, procedures and their rights, sexual harassment and other forms of violence such as rape, imprisonment and confiscaon of goods and lack of adequate services to facilitate availability of market informaon. The Transformave Iniaves The EAC Partner States agreed on a framework to implement a Single Customs Territory that allows a desnaon model of clearing goods while clearance is done at the first port of entry. Accordingly, Partner States re-adjusted their respecve customs management systems that in turn simplified goods documentaon and reduced number of steps to clear cargo. It also documented and integrated new trade facilitaon iniaves like the Authorised Economic Programme and Electronic Cargo Tracking Systems. Impact on Trade Contribuon to revenue collecon to both Kenya and Uganda has been significant. The Kenya Revenue Authority (KRA) says custom collecons have tripled and clearance me cut from three days to just under one hour since it began implemenng the OSBP in June 2017. KRA western regional coordinator Kevin Safari says the simplified procedures have aracted traders into the cross-border business as well as reduced smuggling, increasing revenue collecons. Cross border traders including women have not been leſt behind in this progress: The Cross-Border Trading Environment has greatly improved. In the past, there was a lot of smuggling of goods in Busia. But the sensisaon of women by EASSI and other organizaons about customs procedures has demysfied all of this. Regular stakeholder meengs aended by customs and security officials provide a plaorm where women can report cases of harassment. This has proven very beneficial to the women. Amule Midday Member of the Busia women’s cross border trade associaons says I trade in cereals from Busia Uganda to Kenya. I used to spend a lot of money on Brokers but this stopped when I joined the cross border women’s associaon. Through the associaon we are trained on customs procedures and given the necessary trade informaon. I was accustomed to using illegal routes which was very risky but now came out and only pay the legal fees as I cross with my goods. I started with 50,000 Kenyan Shillings but now my capital has gone up to 2,970,000 shillings (27 sacks of maize). Knowledge has played a very important role in easing cross border trade because I now know all the customs procedures. I walk directly to the customs official and when they try to take advantage of me, I pull out my awareness card and that shoves them away. When I pay taxes, I make sure I get a receipt. Achieng Domila Busia one-stop border post a key EAC trade facilitaon iniave – Kenya Revenue Authority Commissioner for Customs & Border Control – Julius Musyoki The Kenya Revenue Authority (KRA) is cognizant of the great role trade plays in the economic development of our countries and the region. Over the years, we have made significant strides in facilitang trade, not only locally but also across borders. The Busia One-Stop-Border-Post (OSBP) is one of the key inputs in enhancement of trade facilitaon in the East African Community. KRA is proud to take a lead role in the operaons of this facility through our Customs and Border Control Department. This project has further created breeding grounds for increased efficiency and reducon of border crossing clearance me by about 80 per cent. Addionally, the Busia OSBP has been a recipe for strengthened cooperaon between Kenya and Uganda and improved coordinated collaboraon of all the border regulatory agencies led by KRA and URA. The facility has also been a major boost to government revenue. In the 2016/2017 financial year, for instance, KRA collected Ksh1.4 billion from this OSBP alone, which represented a 47 per cent revenue performance since its incepon. As we connue embracing the OSBPs concept, we expect to see improved security, reduced revenue leakage, as well as improved resource ulizaon through cross-border cooperaon. We commit to facilitate the traders to the opmum. Busia Kenya new immigraon hall New Busia Uganda customs building Busia Kenya old customs and immigraon building Busia Uganda old immigraon building Busia One Stop Border Post facilitates trade in the EAC - Dicksons Kateshumbwa, Commissioner of Customs, Uganda Revenue Authority There has been tremendous improvement in infrastructure development at the Busia one-stop border post that eased movement of goods between Kenya and Uganda and indeed the region. We as URA have undertaken reforms including transformaon in infrastructural set up, automaon of systems and capacity building to improve effecveness. Systems automaon have also paved way for the faster clearance of goods — both imports and exports at the Busia one stop border post. Implementaon of various versions of Automated System for Customs Data (ASYCUDA) to replace heavily manual systems of customs declaraons, introducon of the Single Customs Territory (SCT) and Regional Cargo Tracking System has reduced clearance me from 18 days to between 4 to 6 days from Mombasa to Busia. The Busia OSBP has brought government agencies much closer than before. Office Space has been provided at the OSBPs for cross border and women traders. Other services providers include Clearing Agents, Banks, Forex Mobile Payments and Insurance Services. Cooperaon between our two countries and related border agencies has been strengthened led by URA and KRA.
Transcript of REDUCING TRANSIT COSTS THROUGH ...web.monitor.co.ug/Supplement/2018/trademark-Busia...REDUCING...
REDUCING TRANSIT COSTS THROUGH IMPLEMENTATION OF ONE STOP BORDER POST (OSBP) CONCEPT – THE CASE OF BUSIA KENYA/UGANDA OSBP
Background and context.Trade and Transport costs in East Africa (EA) are amongst the highest in the world according to the Doing Business and the Logistics Performance Indicator report series of the World Bank. These are largely attributed to bureaucracies in documentation of trade in goods, uncoordinated goods inspection processes by border agencies as well as the multiple steps involved in the clearance of goods across borders. These impede the region’s ability to trade competitively in the international market. In particular, the time taken to get to and from the ports to land locked countries is singled out as a major factor. In East Africa investments in border hard and soft infrastructure including physical buildings, adoption of Information Communication Technology solutions in border management and establishment of joint border management committees has resulted in one stop controls and led to reduced time for cargo to transit through the main corridors and to cross borders thus enhancing the region’s interconnectedness in trade.
The One Stop Border Post (OSBP) conceptAccording to the OSBP Source Book (2016) , the concept refers to the legal and institutional framework, facilities, and associated procedures that enable goods, people, and vehicles to stop in a single facility to undergo necessary controls following applicable regional and national laws to exit one state and enter the adjoining state. It promotes a coordinated and integrated approach to facilitating trade, the movement of people, and improving security. The concept eliminates the need for travellers and goods to stop twice to undertake border crossing formalities. It is one of the trade facilitation tools recommended by the WTO Trade Facilitation Agreement under Article 8 of the agreement.
In 2010 TradeMark East Africa (TMEA) partnered with the East Africa Community Secretariat and its Partner States to establish and operationalise 13 One Stop Border and adopt Integrated Border Management Systems. The OSBPs are implemented jointly with the EAC Secretariat and OSBPs Lead Agencies, in collaboration with all the Government border agencies (Ministries, Departments and Agencies). To steer the OSBP establishment process, a governance framework in the form of National OSBPs Steering Committees and Joint Border Committees were set up. On the other hand, bilateral agreements to operationalise the OSBP arrangement were signed by adjoining Partner States. Later it was found necessary to adopt a regional wide legal instrument to regulate OSBP operations and in this regard and working with other development partners like JICA, an EAC OSBPs Act and regulations were adopted.
The Busia OSBPThe Busia border is located in Busia County, in Kenya’s Western Province, approximately 431 km, by road, west of Nairobi, Kenya’s capital and largest city. In Uganda, it is adjacent to the similarly named town of Busia in the Eastern Part of Uganda approximately 202 km, by road, east of Kampala, the capital and largest city of Uganda.
Busia border happens to be one of the busiest in East Africa handling transit to and from Great Lakes region of Rwanda, Burundi, DRC and South Sudan. Based on recent TMEA independent Time and Traffic Survey , total weekly traffic count Busia Kenya is 3324 vehicles and 1784 for Busia Uganda. Most importantly, this border handles the largest number of informal cross border traders in the EAC.
Why Busia was considered for an OSBP development. Given its strategic location, volume of traffic and economic importance of the Border to both Kenya and Uganda, it was found fitting to improve its trade infrastructure. In 2011, the time to cross the border was variable taking between one hour and 26 minutes to 14 hours and 20 minutes. Kenya
and Uganda agencies operated independently requiring goods, people and vehicles to stop twice at both sides of the border. Intra and inter border agency cooperation was non-existent. Even though East African community had progressed by establishing a Customs Union in 2005, there existed no framework for Partner states to clear goods at first port of entry and allow deployment of staff and systems that would fast-track clearance of goods. This meant issuance of bond guarantees to secure revenue of respective country and therefore multiple documentation and inspection of cargo at every border crossing. This in turn led to a lot of delays increasing costs for traders.
To small cross traders 70% of whom are women, the problems were even more insurmountable. Prior to the operationalisation of the Busia OSBP, a number of challenges faced informal cross border trades including lack of knowledge of trade regulations, procedures and their rights, sexual harassment and other forms of violence such as rape, imprisonment and confiscation of goods and lack of adequate services to facilitate availability of market information.
The Transformative InitiativesThe EAC Partner States agreed on a framework to implement a Single Customs Territory that allows a destination model of clearing goods while clearance is done at the first port of entry. Accordingly, Partner States re-adjusted their respective customs management systems that in turn simplified goods documentation and reduced number of steps to clear cargo. It also documented and integrated new trade facilitation initiatives like the Authorised Economic Programme and Electronic Cargo Tracking Systems.
Impact on TradeContribution to revenue collection to both Kenya and Uganda has been significant. The Kenya Revenue Authority (KRA) says custom collections have tripled and clearance time cut from three days to just under one hour since it began implementing the OSBP in June 2017. KRA western regional coordinator Kevin Safari says the simplified procedures have attracted traders into the cross-border business as well as reduced smuggling, increasing revenue collections.
Cross border traders including women have not been left behind in this progress:
The Cross-Border Trading Environment has greatly improved. In the past, there was a lot of smuggling of goods in Busia. But the sensitisation of women by EASSI and other organizations about customs procedures has demystified all of this. Regular stakeholder meetings attended by customs and security officials provide a platform where women can report cases of harassment. This has proven very beneficial to the women.
Amule Midday Member of the Busia women’s cross border trade associations says
I trade in cereals from Busia Uganda to Kenya. I used to spend a lot of money on Brokers but this stopped when I joined the cross border women’s association. Through the association we are trained on customs procedures and given the necessary trade information. I was accustomed to using illegal routes which was very risky but now came out and only pay the legal fees as I cross with my goods. I started with 50,000 Kenyan Shillings but now my capital has gone up to 2,970,000 shillings (27 sacks of maize). Knowledge has played a very important role in easing cross border trade because I now know all the customs procedures. I walk directly to the customs official and when they try to take advantage of me, I pull out my awareness card and that shoves them away. When I pay taxes, I make sure I get a receipt.
Achieng Domitila
Busia one-stop border post a key EAC trade facilitation initiative – Kenya Revenue Authority Commissioner for Customs & Border Control – Julius MusyokiThe Kenya Revenue Authority (KRA) is cognizant of the great role trade plays in the economic development of our countries and the region. Over the years, we have made significant strides in facilitating trade, not only locally but also across borders.
The Busia One-Stop-Border-Post (OSBP) is one of the key inputs in enhancement of trade facilitation in the East African Community. KRA is proud to take a lead role in the operations of this facility through our Customs and Border Control Department.
This project has further created breeding grounds for increased efficiency and reduction of border crossing clearance time by about 80 per cent.
Additionally, the Busia OSBP has been a recipe for strengthened cooperation between Kenya and Uganda and improved coordinated collaboration of all the border regulatory agencies led by KRA and URA.
The facility has also been a major boost to government revenue. In the 2016/2017 financial year, for instance, KRA collected Ksh1.4 billion from this OSBP alone, which represented a 47 per cent revenue performance since its inception.
As we continue embracing the OSBPs concept, we expect to see improved security, reduced revenue leakage, as well as improved resource utilization through cross-border cooperation. We commit to facilitate the traders to the optimum.
Busia Kenya new immigration hall
New Busia Uganda customs building
Busia Kenya old customs and immigration building
Busia Uganda old immigration building
Busia One Stop Border Post facilitates trade in the EAC - Dicksons Kateshumbwa, Commissioner of Customs, Uganda Revenue AuthorityThere has been tremendous improvement in infrastructure development at the Busia one-stop border post that eased movement of goods between Kenya and Uganda and indeed the region.
We as URA have undertaken reforms including transformation in infrastructural set up, automation of systems and capacity building to improve effectiveness. Systems automation have also paved way for the faster clearance of goods — both imports and exports at the Busia one stop border post. Implementation of various versions of Automated System for Customs Data (ASYCUDA) to replace heavily manual systems of customs declarations, introduction of the Single Customs Territory (SCT) and Regional Cargo Tracking System has reduced clearance time from 18 days to between 4 to 6 days from Mombasa to Busia.
The Busia OSBP has brought government agencies much closer than before. Office Space has been provided at the OSBPs for cross border and women traders. Other services providers include Clearing Agents, Banks, Forex Mobile Payments and Insurance Services.
Cooperation between our two countries and related border agencies has been strengthened led by URA and KRA.
