Johannesburg: In the 1980s, exporting goods from Singapore often meant running a gauntlet of Dickensian bureaucracies. A Singaporean trader hoping to ship goods abroad might have to fill out up to 35 forms, in duplicate, and submit them in person to at least two different offices. Shipments would regularly be delayed for days awaiting bureaucratic approval. But in 1989, Singapore became the first country to introduce a single electronic window, a one-stop shop for traders that reduced delays, increased customs revenue and, ultimately, boosted trade.
Since then, the single electronic window has proved to be one of the smartest investments a country can make in its economic infrastructure. In 2000, Ghana became the first country in Africa to introduce a single window for exporters and importers. In its first year of operation, Ghana's single window increased customs revenue by 35%, while significantly improving the accountability and transparency of the entire system.
When African government officials and business people meet this week in Washington DC for the 11th annual African Growth and Opportunity Act (Agoa) Forum, I hope they will share their experiences with potential advances in trade technology such as the single electronic window. For one of the lessons Ghana and others teach us is that lumbering, cumbersome bureaucracies can do just as much to strangle trade as rutted roads or a decrepit rail system.
Agoa has greatly benefited Africa by stimulating trade, allowing billions of dollars worth of African goods, including $3b n in South African exports in 2010, to enter the US duty free. This global trade has, in turn, created new jobs, new companies and even new industries. Yet even with the preferential market access provided by Agoa, African exports are still too often not competitive globally, and trade within Africa lags behind other regions. Regional trade drives growth.
In Asia, for instance, intra regional trade now accounts for 30% of total trade. In 2007, exports accounted for 66% of gross domestic product in Association of Southeast Asian Nations (Asean) countries — a 20% increase since 1984. Asean is now developing a regional single electronic window that will further speed the flow of goods through regional supply chains and into global markets.
When goods cannot move efficiently across borders, trade and growth suffer. Consider the case of one major South African retailer that spends $20000 a week on import permits just to ship its goods into a neighbouring country. Now consider that every day a truck is sitting at a border waiting for clearance, it costs up to $500. In the World Bank's annual Trading Across Borders Index, which measures the ease and costs with which goods flow, Southern Africa rates far worse than any other region. To maintain its position as the gateway to Africa, SA should champion initiatives such as a regional single window that facilitate supply chains within Southern Africa and reduce barriers to entering global markets.
The good news is that the flow of goods can be improved quickly without waiting for big investments in infrastructure that can take years. Countries can reduce the cost of trade simply by using technology to refine existing practices. For instance, within two years of launching a single window, Thailand was saving its importers and exporters $1,5bn a year just by reducing the cost and delay of administrative processes. It moved up from 108th on the Trading Across Border Index to 12th in the world and its customs office gives credit to the single window.
Adopting trade facilitation tools such as the single window has the added advantage of bringing countries closer together and reducing the cost of corruption. One of the most exciting recent uses of technology to improve trade flows is the Trans-Kalahari Corridor Customs Connectivity project, an international partnership including the governments of Namibia and Botswana, Microsoft, and USAID, which uses cloud computing to share data between national customs management systems, thus increasing transparency and reducing duplication.
The US, through Agoa and other initiatives, is committed to improving Africa's share of global trade by advising on regulatory environments, assessing and financing infrastructure investment and helping to identify potential efficiencies such as the single window. Underlying this is the realisation that Africa's economies and young societies are the most exciting emerging market in the world, and that growing trade will create new jobs both here and in the US.
• Gips is the US ambassador to SA.