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World Bank report assesses trade facilitation challenges faced by traders and customs agents in South Africa, especially women

A report recently published by the World Bank presents the results of a survey on trade facilitation challenges faced by traders and customs agents (customs brokers and freight forwarders) in South Africa, especially women. The survey's objective was to identify whether women traders and customs agents experience different challenges to border processes and procedures than their men counterparts, including those related to COVID-19. The study is important because it can help the South African government (and not only) to better understand trade barriers and design policy, maximizing the benefits from trade facilitation for women, so that they can participate more fully in the economy.

Some of the key problems that are common to traders and customs agents in South Africa, irrespective from their gender, include:

  • COVID-19-related challenges, which affected their ability to undertake cross-border trade, with firms experiencing increases in the number of hours devoted to complying with customs and border agency inspections and document requirements (with 90% of respondents raising this problem).
  • Consultations of South African traders and customs agents on occasion of legislative changes to official cross-border trade processes and procedures are in most cases not conducted or intermittent. This problem is reported respectively by 76% and 58% of surveyed traders and customs agents. Concerning companies engaging in cross-border trade, 51% of them feel that their feedback is taken into consideration during such consultations.
  • Awareness of the South African National Trade Facilitation Committee (NTFC) among traders is low, with only 11% of traders and 27% of customs agents that are aware of its existence.
  • More than half (51%) of the surveyed traders report that clearance of export/import declarations, cargo inspection procedures, and compliance procedures and documentation (e.g., phytosanitary requirements) are not consistently applied, and therefore vary from border post to border post.
  • While 53% of customs agents have their imports released from Customs within half a day of submitting the customs declaration, 40% of traders report that it takes three or more days to clear their goods through Customs.
  • Customs agents find explanations on penalties and appeals procedures against customs decisions easy to access from government entities, although 51% declares that formal complaint or grievance procedures are not effective.
  • Only 8% of traders and 32% of the interviewed customs agents regularly visit the border, being their presence to clearance operations conducted by Customs not always necessary, especially in case of documentary inspections. When visiting borders, about half of the respondents felt unsafe, mainly because the border lacks clear organization and/or is over-crowded.


Concerning the problems specifically faced by women traders and customs agents, the survey found that they experience greater challenges compared to men counterparts, namely:

  • Women traders have experienced declines in trade flows (69 % for exports and 68 % for imports) higher than their men counterparts (51 % for both exports and imports) as a result of COVID-19 pandemic.
  • The share of women traders that deems information on official regulations and procedures related to cross-border trade easy to find, is smaller than their male counterparts (25% against 35%).
  • Women traders (45%) find more complicated than men (34 %) to access to cross-border information due to the fact that government information mechanisms are considered not user-friendly.
  • Half of the surveyed women customs agents (compared to 31% of men customs agents) report that access to information is challenging because not all agencies have comprehensive information available.
  • More women traders (45 %) than man (29 %) find the official regulations and processes difficult to understand.
  • Women traders (72%) use personal networks and customs agents as sources of information more often than men traders (66%).
  • Fewer women traders (40%) than men traders (56%) find that border processes and procedures are consistently applied.
  • Among those traders finding border processes inconsistently applied, a 25% share of women traders find payment of fees/duties processes inconsistently applied in comparison to only 2% of men traders.
  • Women traders (35%) incur in problems of detention of their goods at borders less frequently than men traders (60%) due to their incorrect declaration, classification, and valuation.
  • Women customs agents that had their goods detained at the border stated that this was mainly due to problems with licenses, permits, certificates of origin or authorizations to import (55%), while another 36% declared thatthis was caused by lack of compliance with plant quarantine/animal health regulation. On men customs agents, these problems impact, respectively, in the measure of 28% and 13%.
  • Among customs agents that regularly visit the border, all the women respondents (100%) feel unsafe, compared to 38% of men respondents.

 

Based on the above findings, the report concludes that there is an opportunity - and not only in South Africa, but elsewhere around the globe, being these problems common to any nation, especially in Africa -  to improve the design of trade facilitation interventions to better address traders’ needs (women in particular), by implementing a series of key recommendations that are elaborated in section five of the report (page 27 and following). Gender-specific recommendations include the following:

  • Improving access to and understanding of border regulations and procedures by centralizing all trade-related information from all border agencies in a user-friendly manner, such as through the establishment of a Trade Information Portal, and by organizing such information in an easy-to-understand style for the common operator, particularly small, medium, and micro enterprises. The report also recommends that the South Africa Revenue Service (SARS) should implement joint awareness and education programs with local Chambers of Commerce, Industry Associations, Customs Agent Associations, and Import/Export Councils on trade facilitation issues, with specific targeting of women traders.
  • Promoting the South African NTFC, making it more effective, accountable and inclusive. In this regard, the membership structure of the NTFC should be revised in order to allow more direct representation by the private sector through business organizations and to strategically target a diversity of firms, including those represented by women and those focused on women entrepreneurship, to participate in workshops and consultations held by the NTFC. The NTFC should include a gender component in the NTFC roadmap and specific indicators associated with gender participation in its monitoring and evaluation mechanism to ensure gender mainstreaming is part of the trade facilitation agenda. In addition, the NTFC and SARS should invite Departments of Small Business Development and of Women, Youth and Person with Disabilities to participate in the NTFC and in the design of trade facilitation reforms, and most importantly, strengthening the capacity of these agencies is required to participate in trade-related discussions.
  • Streamlining and improving consistent application of border processes and procedures to provide traders and customs agents with more predictability and certainty when engaging in their cross-border trade activities. Consistency can be improved in various ways, including through implementation of one stop border posts (OSBPs) while taking into consideration concerns of small traders and women-led businesses, and promotion of the Authorized Economic Operator (AEO) program with an exploration of options for its use as an instrument to promote more equitable gender participation at firm level.
  • Using technology to enhance trade facilitation, including through the implementation of a Single Window. A more simplified, electronic process will also encourage greater participation and reduce the entry barriers, especially for smaller firms, where women engage in larger numbers, according to the survey results. Education and training activities on the usage of the automated customs system, including the electronic payment functionalities on electronic payment platforms should also be increased, especially for women traders.
  • Improving safety and security at the borders. Actively promoting gender balance within the border workforce and provide gender-sensitive training for customs and border management officials is critical as officials cited as the main perpetrators of negative behavior at the border. It is also recommended to improve the design and maintenance of infrastructure and services at the border by providing appropriate sanitation facilities, adequate lodging on either side of the border, and well-lit walkways in the border area.
  • SARS should work closely with trade and industry associations, especially those that focus on women entrepreneurs and SMEs, to strengthen formal trade consultations.
  • Time Release Studies (TRS) should be conducted on a regular basis in collaboration with all border agencies to identify and address reasons for delayed release of goods by traders. It is also recommended that the findings from the TRS are widely publicized among stakeholders (ensuring women-led firms are reached through appropriate platforms such as a more inclusive NTFC and women trade associations).
  • Publicizing official grievance procedures: the responsiveness of official grievance procedures should be promoted eventually through the NTFC. The government, including through the NTFC, should publicize more broadly the official channels for appeal to all stakeholders.

 

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