Reducing tariffs is a great start for increasing trade within Africa, but important non-tariff barriers (NTBs) must also be reduced in order to boost trade both within and outside of the continent. In fact, the United Nations Economic Commission for Africa found the costs of NTBs in 2010 were higher than the costs of tariffs.
The African Development Bank notes that, “while tariffs have progressively fallen, the key challenge to intra-African trade is non-tariff barriers that stifle the movement of goods, services and people across borders.” What sort of non-tariff barriers exist in Africa? Infrastructure across the continent is poor, discouraging the movement of goods and people.
Less than a quarter of roads are paved, and those are often filled with potholes. It’s not uncommon for airfare with a layover in Europe or Asia to be cheaper than direct intra-continental flights. Meanwhile, seaports are crumbling and rail connection is paltry. “Thick borders” are also an issue, created by burdensome administrative procedures for clearing goods for import and export.
Lines of trucks at the border lead to waits measured in days due to excessive bureaucratic red tape and burdensome administrative procedures. A report by Transparency International (TI) and TradeMark Africa (TMA) found that drivers at Rwanda-Tanzania customs stations spent an average of 72 hours obtaining customs clearance.
World Bank economist Paul Brenton found that a truck serving supermarkets across a Southern Africa border may need to carry up to 1600 documents to comply with different countries’ requirements for permits, licenses, and other required paperwork. Excessively long delays at the border are created by a lack of coordination and uniformity between countries’ technical regulations, rules of origin, standards, and policies on licenses and permits, writes Karen Hasse of Good Governance Africa. Such protracted delays also create an environment ripe for corruption, as bribes can grease the wheels and speed up the customs process.
Of those surveyed in the TI-TMA study, 86 percent of truckers from Kenya and 82 percent from Tanzania admitted paying bribes. The study found that 18.6 percent of the total cost of goods transported across Tanzanian borders was due to bribes paid to speed the customs clearance process.
The Cost of NTBs
Over-regulation is choking African trade and growth. With greater integration could come greater country specialization – such as basic manufacturing in metal and plastic products that are expensive to import from the global market. The costs of these barriers hit the small traders and small businesses the hardest. Small traders cannot afford the cross-border trading costs and as a result their growth is hampered, specifically due to their inability to integrate into regional and global value chains.
Paul Brenton, the World Bank economist, compares the cost of crossing the Bay Bridge from San Francisco to Oakland to the cost of crossing the Congo River between Kinshasa and Brazzaville – a trip of similar distance. If Bay Area residents faced similar relative costs as the Congolese, this journey would cost $1,200. As a result, Brenton observes, “cross-border exchanges between the two Congos is around five times smaller than that between East and West Berlin in 1988 – well before the dismantling of the Wall!”
Source: CIPE

Disclaimer: The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of TradeMark Africa.