Impact of Coordinated Border Management On Trade in Lesotho
Impact of Coordinated Border Management On Trade in Lesotho
Impact of Coordinated Border Management On Trade in Lesotho
World Customs Organization (2020) published the Customs Compendium for Integrated Border
Management in 2006 which outlines the key elements of an Integrated Border Management
System, as well as planning and implementation issues. Many of these elements addressed in the
Compendium published in 2006 are still relevant today. Thereafter, there have been various
names across various forums. In European Union, the concept is known as Integrated Border
Management, World Bank –Collaborative Border Management while in Organization for
Security and Cooperation in Europe (OSCE) it is called Comprehensive Border Management.
All the terms have the same meaning which involves general regulatory agencies performing
their regulatory functions in a coordinated approach. WCO seemed to prefer the name
Coordinated Border Management over the previous name of Integrated Border Management
because of the following reasons:
“Integrated” was seen to be narrowing the scope of the concept because it took structural
and institutional integration for granted.
WCO believes that CBM is way broad because resources, function, processes, and
legislation can be mobilized around a shared vision of effective and efficient border
management and it has many solutions to achieve where integration of the services is just
one of the options.
Coordination of stakeholders for the release of goods is one of the core pillars of trade
facilitation as outlined under the World Trade Organization (WTO) Trade Facilitation
Agreement (TFA) Article 8. Article 8 compels members who share common borders to
cooperate on coordinating border procedures to facilitate cross-border trade. This cooperation
can be in line with the alignment of working hours, procedures, and formalities, development,
and sharing of common facilities as well as joint controls and establishment of one-stop border
post control (Trade Facilitation Agreement, article 8).
One of the effective instruments to achieve trade facilitation is the Coordinated Border
Management (CBM) (George, 2017). It is one of the components of trade facilitation for
coordination of national and international border control agencies to improve trade. At a national
level, coordination is between all the different agencies which are involved at the border while at
an international level, it involves two countries that share the border post (Aniszewski, 2009).’
Makokera and Krogman (2017) indicated that the purpose of CBM is to improve operational
trade and clearance procedures, legal and regulatory framework, and institutional framework for
cooperation, human resource, and capacity development, communication, and information
exchange as well as sharing of infrastructure and equipment. Delay of the release of travelers and
goods at the border is one of the non-tariff barriers to trade and this is against trade facilitation.
Therefore, a good implementation of CBM will address that problem.
CBM will help the government to improve service delivery because of reduced contradiction
agencies’ policies, missions, and mandates. As a result, it strengthens government to address
strategic issues across the border agency sector as a holistic approach to border management.
CBM will also benefit traders and travelers since it will reduce time spent at the border and
transport costs because of an efficiently managed border. Therefore, countries can reduce
internal costs and inefficiencies, improve their ability to facilitate trade, and generate revenue at
the border through the implementation of CBM strategies (Aniszewski, 2009).
According to Jain (2012), delays at border crossings affect international land transport. It has
been seen that these delays are the results of a lack of coordination and cooperation with the
border agencies where each agency pushes its mandate on goods and people crossing the border.
The agencies are seen to be independently conducting multiple inspections hence the delay at the
border. These delays affect trade flows badly because they increase the cost of the goods which
makes them uncompetitive in the market. It also promotes corruption.
George (2017) stated that there are external and internal motivations that are the basis to
implement CBM. External motivation includes bilateral and multilateral agreements (Free Trade
Agreements, Mutual Recognition of preferred traders, Mutual Assistance Agreements, Regional
Integration Agreements, and Multilateral Trade Agreements). Internal motivation includes
improvement of quality service, enhancement of national competitiveness, construction of new
infrastructures in seaports, airports, or border posts, and attendance to security threats and
regulatory challenges.
Background
Lesotho Revenue Authority (LRA) was established with the Lesotho Revenue Authority Act No.
14 of 2001. LRA began to operate in January 2003, where it includes the functions of the old
Income Tax, Customs and Excise and Sales Tax Departments. The LRA was established to
enhance the efficiency and effectiveness of revenue collection and to provide an improved
service to the public (www.lra.org.ls).
Lesotho as a member of WTO accepted TFA on the 4 th of January 2016 (Trade Facilitation
Agreement database). According to World Trade Report (2015), the objectives of the agreement
are to expedite the movement, release, and clearance of goods including goods in transit,
improve coordination and cooperation between customs and other border agencies among others.
These objectives will be met through simplification, harmonization, and documentation of trade
procedures to improve trade with fast, cheap, and easy procedures, and the use of advanced
technology. Also, TFA is intended to increase transparency, and predictability of the
international movement of goods. According to World Trade Report, full implementation of TFA
holds benefits of reducing time costs to a significant degree and will boost export, especially by
LDC.
In September 2017, Lesotho then established National Trade Facilitation Committee (NTFC) to
facilitate the implementation of WTO TFA (Mokoma, 2017). Lesotho notified its schedule of
commitments for category A, B and C where it commits itself to implement CBM within the
country together with other neighboring countries in 2018. This was done in line with article 8 of
TFA. Then, in November 2019, Lesotho piloted CBM implementation at Maseru Bridge (LENA,
2019).
In addition to TFA, Lesotho has also signed the WCO Convention on the Simplification and
Harmonization of Customs Procedures (as amended), known as the Revised Kyoto Convention
(RKC) in 2000. The KRC is the blueprint for modern and efficient Customs procedures in the
21st century, which provides an additional basis for CBM implementation. In particular, Standard
3.35 of the KRC calls for a coordination of the inspection process and a consultative approach
between Customs and other competent authorities to enhance the clearance and release of goods
from the borders (WTO).
According to the AGOA response strategy for Lesotho (2016), trade facilitation was seen to be
the biggest challenge in Lesotho where documentation clearance took up to 14 days. Also, the
Lesotho Revenue Authority (LRA) contacts inspection at the premises of the manufacturers for
exports then South African Revenue Services (SARS) also contacts its inspection which takes up
to six hours. This is a big challenge to manufacturers who are expected to unload and reload the
cargo. This practice was seen as a duplication of effort and a waste of resources and time. This,
therefore, calls for SARS and LRA to harmonize and coordinate border operations and systems
to enhance the movement of goods and people between Lesotho and the Republic of South
Africa. This is because Lesotho is a landlocked country that shares borders with South Africa
only. The study also indicates that the main issues which needed to be addressed were customs
clearance and immigration.
Lesotho conducted Time Release Study (TRS) in October 2011 and February 2018 at Ficksburg,
Maputsoe, and Maseru border posts (the big borders between Lesotho and South Africa) together
with Maseru Railway which was sponsored by World Bank. Both studies were intended to assess
the time taken by traders (goods and conveyances) at the border to complete all the formalities
for the release and clearance of goods between the borders in Lesotho and South Africa.
According to LRA Newsletter (2012), the studies revealed that there was a higher delay at the
border for a trader to complete all the border procedures with different border agencies, where
there were multiple interventions by different border agencies. Also, the stakeholders stated that
there were complex and long declaration processes on both Lesotho and South African sides
which contributes to the delay in release.
However, there was an improvement in 2018. The results of the time taken on declaration and
release of goods in 2018 TRS were shorter than those of 2011 TRS. This was because
declarations were done manually in 2011 while in 2018 the process was automated through the
use of ASYCUDA (TRS+ Report, 2018).
Problem Statement
In 2011 and 2018 TRS revealed that there was poor service in Maseru and Maputsoe border
posts with delays which were very costly to the traders. According to the LRA newsletter (2012)
and Lesotho TRS+ Report (2018), the comparison between average times from arrival to release
of goods in rail-based cargo has decreased as compared to that of 2011 TRS, while it has
increased in the declaration release. On average, TRS+ revealed that imports take up to 1 day, 10
hours from the time that the declaration is created to exiting the border in Lesotho while the
median time is 15 hours. Exports take a shorter time of average of 1 day, 8 hours, 30 minutes
with the median of 22 hours from creation of declaration to the release of export due to the pre-
border processes. As a result, trade facilitation in Lesotho has been so poor for years and the
perception was that it might be because of non-tariff barriers of slow service at the border. CBM
is intended to improve trade facilitation. However, one may ask himself or herself the following
questions: are the Lesotho traders happy with the turnaround time of declaration and release
now? Therefore, this study is intended to find out the impact of CBM on trade-in Lesotho,
especially in the Maseru border post.
Subsidiary Objectives
1. To find out the effectiveness and efficiency of CBM in facilitating trade in Lesotho
2. To establish how border agencies adapt to the CBM implementation
3. To examine cooperation and coordination between Lesotho and the South African side
Research questions
1. How effective and efficient is the CBM in facilitating trade in Lesotho?
2. How do border agencies adapt to the CBM implementation?
3. Is there cooperation and coordination between Lesotho and the South African side?
1.4 Hypothesis
The study will be premised on the following hypothesis:
Definition of Terms
Coordinated Border Management: The streamlining of parallel processes and technologies
enabling different government agencies to effectively work together on border issues. This is
done by implementing CBM strategies at both the domestic and international levels, countries
can reduce internal costs and inefficiencies, improve security, and increase their ability to
facilitate trade and generate revenue at the border (Inter-American Development Bank, 2010).
Therefore, for the purpose of this study, the above definition will be applied.
Cruzada (2018) stated that CBM has improved service delivery between the Republic of Chile
and the Republic of Peru across the borders. Integrated border management and Cooperation
Systems for the Facilitation of Movement at cross-border operations between the two countries
were implemented in January 2011. The two countries have joint controls of which some involve
both countries on a one-stop border where travelers will stop once in the country of entry where
controls are carried out. Because of the implementation of this project, travelers have increased
by more than 50% due to reduced crossing time. There is also an increase in the movement of
vehicles and tourism has highly improved between the two countries. In the same way, Lesotho
and South Africa can copy what these two countries have done to facilitate trade.
By speeding up the clearance of goods across borders, trade facilitation could provide a big boost
to trade in perishable agricultural goods. The same effect is likely to apply to intermediate
manufactured goods, which feature prominently in global value chains where lead time and
predictability in delivery time are critical. Timeliness and predictability of delivery times are
critical to the successful management of global value chains as well as to trade in perishable
agricultural goods and clothing and textiles, which are subject to rapid fashion cycles. Trade
facilitation boosts trade in these goods because it reduces the time needed to export and increases
predictability in delivery time (World Trade Report, 2015).
Figure 1
The customs administrations of Rwanda, Uganda, and Kenya have successfully strengthened
their collaboration, regarding the cross-border movement of goods and customs clearances.135
Customs authorities in these countries have launched common customs modernization programs,
common electronic cargo tracking systems, and regional Authorized Economic Operators (AEO)
programs. They are also working on the elimination of duplicate security checks and on the
operationalization of One-Stop Border Posts (OSBP). These initiatives have lowered trade
barriers between these countries, through the reduction of customs bureaucracy and security-
related roadblocks along the Northern Corridor, for example. To realize further trade facilitation
benefits, the countries have also harmonized axle road control measures at weighbridges,
removed cash bonds, as well as arranged 24/7 opening hours at all border crossings. These
initiatives have resulted in a reduction in the cost of transporting a container from Mombasa to
Uganda from about 3,375 USD to about 2,300 USD (a saving of 1,075 USD). Besides, the time
of moving a container from Mombasa to Kampala has shorted from earlier 18 days to four days.
The initiatives have also facilitated the collection of trade statistics (COMCEC, 2016).
India and Pakistan have integrated checkpoints in cargo handling terminals, import warehouses,
export warehouses, parking areas, and dormitories for drivers. This integration has produced
good results for India. Indian customs authorities’ records on cross-border traffic have highly
increased. Trading companies report faster and less expensive cross-border clearance Trade has
also and let to improved living conditions, employment opportunities, and increased commercial
activity of people on both sides of the border. In Uganda and Kenya, officers from all authorities
at the border are placed physically together to handle the work and examinations as well as
accepting each other’s work. This can also be supported by the fact that they work together for
automation of the work and grant each other access to the IT systems. They have also centralized
clearance in Mombasa, Kenya (COMCEC, 2016). Therefore, if Kenya and Uganda have
managed to work together and succeeded, then Lesotho and South Africa can also do it in all
their border posts since Lesotho is landlocked and shares borders with South Africa only.
Methodology
3.1 Research design
The study is going to use a case study design. A case study is explained by Bryman (2008) as a
research design that entails the detailed and intensive analysis of a single case.
3.5 Sampling
The sample size of the study will be determined through the use of the Krejcie and Morgan
formula where population size will be totally formulated from clearing agents, traders (large
importers, and AEOs) which will give the exact number of the sample size to be interviewed.
State the sample
References
AGOA response strategy for Lesotho, (2016) (online) available at Agoa-response-strategy-
report-for-lesotho-2016.pdf (Accessed 13 February 2022).
Aniszewski, S. (2009) ‘Coordinated Border Management Concept Paper’ WCO Research Paper
No. 2
COMCEC (2016) Improving the Border Agency Cooperation Among the OIC Member States
for Facilitating Trade
Cruzada J.C. (2018) ‘Integrated Border Control between Chile and Peru’, (online) available at
https://mag.wcoomd.org/magazine/wco-news-85/integrated-border-control-peru-chile/(Accessed
01 April 2022).
East Africa Trade Hub Knowledge Management Case Study-JBCs April 2013 (online) available
at https://pdf.usaid.gov/pdf_docs/PA00JZ67.pdf (accessed 27 March 2022).
George, H. (2017) ‘How to engage effectively with other Border Agencies in a Coordinated
Border Management’, (online) available at https://unctad.org/system/files/non-official-
document/HermieGeorge_WCO_NTFCForum_Jan2017_2.pdf (accessed 01 April 2022).
Makokera C.G. and Krogman H. (2017) Regional Report: Assessment of selected trade
facilitation measures in Southern Africa
Mokoma M. (2017) Lesotho establishes coordinating Committee on Trade (LCCT) and National
Trade Facilitation Committee (NTFC) press release.
Romaya S. and Brown A. (1999) City Profile: Maseru, Lesotho Volume 16, issue 2, Pages 123-
133
www.economishelp.org
World Trade Report (2015) Speeding up trade: benefits and challenges of implementing the
WTO Trade Facilitation Agreement
Krejcie, R.V., & Morgan, D.W., (1970). Determining Sample Size for Research
Activities. Educational and Psychological Measurement.