South-South and Triangular Cooperation - Denmark

The Programme (BSPS IV) has three components with a total of 6 engagements:

• Agricultural Markets Development under which a Trust (AMDT) will engage in a number of value chains and thereby facilitate the equivalent of 100,000 full-time jobs and increase income for 300,000 farmers. The immediate objective is defined: The incomes and employment opportunities of poor women, men, and young people are increased in agricultural value chains in Tanzania. Contributors are DANIDA, SIDA, Irish Aid and Swiss SDC.

• Improved Business Climate has the immediate objective: (i) Improved business climate for the private sector, inducing businesses to grow and create employment opportunities; (ii) Local Investment Climate-focused on critical constraints to business growth and economic development at the district level by helping the local authorities and business communities to identify and prioritizes the constraints. Dodoma and Kigoma Regions are the focus areas; (iii) BEST-Dialogue will work with business organizations and government to improve business environment through regulatory reform, improved implementation and effective and efficient enforcement; and (iv) CTI/DI Twinning arrangement will strengthen the institutional capacity of CTI as a key private sector organization vis-à-vis the Government of Tanzania.

• Access to finance has the immediate objective: (i) Farmers, enterprises, and employees increase their access to quality financial services; (ii) Financial Sector Deepening Trust (FSDT) has since 2004 financed the development of pro-poor financial services and new financial products for MSMEs; and (iii) Private Agricultural Sector Support (PASS) operates on commercial terms offering a combination of credit guarantees and business development services to Tanzanian farmers and agribusinesses. The present upscaling of PASS businesses are based on new financial products with a significant potential for increasing the number of beneficiaries.

Danish Aid for Trade has supported several projects by TradeMark East Africa (TMEA) that promote cross-border and regional trade in East Africa. Development assistance from Denmark has co-funded TMEA since 2011 both on a regional basis across the whole EAC, and also bilaterally to Kenya and Uganda.

Denmark’s trade facilitation support through TMEA is multi-faceted. It covers a variety of complementary activities to make trade easier, more efficient, and less costly. This work is consistent with international efforts led by the WTO to facilitate trade, and hence to increase economic growth, job creation and household incomes in developing countries.

The TMEA programmes and projects specifically concern Denmark’s support for women cross-border traders; harmonization of product standards; one-stop border posts; automation to modernize trade procedures; and a new Trade Logistics Information Pipeline initiative carried out in partnership with the Danish shipping company, Maersk.

One Stop Border Posts (OSBPs): TMEA and the EAC Partner States introduced an OSBP programme across the region in 2010 to improve access to markets for formal and informal traders. Operations at six completed OSBPs have contributed to a reduction in transit time for trucks of over 30%, and 80% at one of the busiest borders in the whole region, at Busia. Excessive paperwork and the need to repeat exit and entry procedures on both sides of the border have been removed by new border arrangements between the respective authorities in each country.

Single Customs Territory (SCT): The SCT promotes free movement of goods in the single market, with variations to accommodate goods exported from one EAC Partner State to another. However, customs administrations at destination states retain control over assessment of taxes. The SCT has contributed to a drop in the time and cost of doing business by eliminating duplicated processes and reducing administrative costs and regulatory requirements.

Non-Tariff Barriers to Trade (NTB): NTBs exist in many forms. Some notable examples are road blocks or weigh bridges set up by police officials to extract bribes from truck drivers, or ad hoc, illegal fines imposed by government officials or people posing as officials at ports or border posts. NTBs were declared unlawful in a recent EAC Act. TMEA supports national Ministries of Trade to equip NTB Monitoring Committees to identify and punish offenders, and systematically remove NTBs. A mobile phone-based NTB reporting system has been used successfully in Tanzania by the Chamber of Commerce to report abuses on-line.

Electronic Single Windows (ESW): ESWs have been supported by TMEA in Uganda, Rwanda, and potentially in Tanzania. Traders can simultaneously submit the required trade information - including customs declarations, applications for import and export permits, certificates of origin, and trading invoices - through a single online portal. The ESW integrates links to all the various agency trade portals necessary to trade. Therefore, while creating an ESW is essential, it is also essential to populate the ESW with key agency portals. TMEA’s approach is to work on both at the same time. It has supported 30 agency portals over the last six years. This contributed to a major reduction in transaction costs and time to process documentation for selected imports and exports at key trade regulatory agencies in the EAC.

Authorized Economic Operators Scheme (AOE): The AEO project has sought to reduce the cost of doing business by simplifying customs procedures, and reducing clearance time. The objective of AEOs was to create a platform where trustworthy and accredited operators would be able to fast track their goods. Spedag-Interfreight, a company in Uganda, reported significant improvements in efficiency, resulting in monetary savings for their clients and faster truck turnaround from 2.5 trips per month to 5 trips a month. This resulted in the better evacuation of containers and higher earnings.

Electronic Cargo Tracking System (ECTS): This system helps to monitor transit cargo from the departure office to the destination office within the EAC. Revenue Authorities throughout the region have introduced modern, computerized ICT systems, with great success. Cargo tracking benefits all stakeholders, making truck supervision more efficient and accurate. ECTS also provides advanced information for clearing and forwarding agencies, so they can start processing customs entries prior to the arrival of transit trucks at border posts.