Trade Logistics

Examples of Our Work

Rwanda

Following the end of conflict in 2000, Rwanda experienced rapid growth and is transitioning into a period of stabilization. With current economic growth at over 6% percent per year, the government is making long-term commitments to improve the investment climate by reducing the costs of doing business, promoting competitive markets, and supporting the private sector. Rwanda is becoming increasingly attractive as a potential full-size trading hub: the country recently became a partner in both the EAC (East African Community) and COMESA (Common Market for Eastern and Southern Africa) which brings both opportunities and challenges for private businesses.

The trade logistics advisory program in Rwanda aims to reduce the time and cost to trade that is accounted by administrative and regulatory processes. The project started in August 2007 and has already shown some early success in the past year. The team worked closely with the Rwanda Revenue Authority (RRA) and related agencies to generate 10 improvements in FY08. The program is assisting the government in implementing a risk management system that limits excessive physical inspections, thus speeding up trade while ensuring compliance and security. Other key reforms introduced include streamlined customs procedures at the Magerwa dry port in Kigali and improved payment systems for trade.

For the trade logistics program in Liberia the team is working closely with its primary counterpart the Ministry of Finance (MoF) on a work program that has achieved 11 improvements in FY08. The project involves a close partnership with the World Bank transport department’s port reform project and the Africa Investment Climate Fund. Two examples of the benefits of the new regulations: (a) Reduced costs to trade: The MoF cut by half the customs administrative charges for special products (from 3% to 1.5%) that directly reduces the cost to trade. (b) Reduced number of procedures for trade transactions: The government eliminated the MoF Excise Tax Division and the Bureau of Concessions (both government agencies); the MoF export clearance requirement was removed; and various security functions and other nonessential staff involved at the port gates were reduced to only allow authorized personnel. All these improvements represent a reduction on the transaction costs for traders captured in less documentation and reduced time at government agencies.

In July 2008, FIAS' trade logistics program also began working with the Government of Colombia (GoC) to streamline its trade facilitation services. The main factors driving this interest is the pressure to integrate Colombia's economy more squarely into global markets, and more recently, the forthcoming FTA with the US, Canada, European Union, Mexico, Chile and the "North Triangle in Central America" i.e. Salvador, Guatemala and Honduras. Seamless and reliable supply chains are essential for the approval of such trade agreements. The program to improve Colombia's trade logistics system is being implemented by a joint team from FIAS, IFC's LAC Office for Advisory Services, with participation by the World Bank's LAC PREM department.