Consider the following description of a trucker’s journey in Cameroon: “The plan was to carry 1,600 crates of Guinness and other drinks from the factory in Douala where they were brewed to Bertoua. According to a rather optimistic schedule, it should have taken 20 hours, including an overnight rest. It took four days. When the truck arrived, it was carrying only two-thirds of its original load.”
And this is how a Tanzanian exporter explains why few firms stay in the exporting business: “They discover that it is a miserable experience. Having gone to the effort of getting an export order they then spend weeks pounding through bureaucracy, endlessly waiting in dirty government corridors trying to find a morose civil servant prepared to do his job.”
How do these costs affect Africa’s trade?
The World Bank’s 'Doing Business' report, provides information on the average time it takes for an exporter to complete a series of procedures when moving goods from the principal city to the port of exit. Each procedure is classified into one of three main categories: documentation, inland transportation, and customs and ports (see Figure 1).
We found that while all types of delay reduce exports; inland-transit delays have the largest negative impact on new products’ export values. We estimate that a one-day decrease in the inland-transit time:
- Increases exports of new products by 7%.
- Is equivalent to about a 1.5% increase in all import tariffs of partner countries.
Geography is not the primary reason for long delays in transit times. There are more important factors such as the quality of the roads, quality of the vehicles, likelihood of accidents, theft, competition in trucking, road blocks, and waiting times at borders.
Conclusion: inland transit is key to stimulating Africa’s exports. While improvements in ports and customs procedures can help exporters, the impact of improved inland transit is roughly five times greater.
FIGURE 1:
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