Republic of Congo Trade Facilitation Intervention Trade Facilitation between Congo and its Neighbors: Addressing the Bottlenecks (TF-P149800) Republic of Congo Trade Facilitation Intervention Trade Facilitation between Congo and its Neighbors: Addressing the Bottlenecks May 2015 Republic of Congo Government Fiscal Year January 1–December 31 Currency Equivalents Exchange Rate Effective as of May 15, 2015 Currency Unit = CFA Franc US$1.00 = 573.34 XAF Weights and Measurements Metric System Vice President Makhtar Diop Country Director Eustache Ouayoro/ Jan Walliser/ A. Moustapha Ndiaye Practice Manager Albert G. Zeufack/ John F. Speakman Task Team Leader Fulbert Tchana Tchana Table of Contents Preface ........................................................................................................................................................... ix Acknowledgements ........................................................................................................................................ xi Abbreviations and Acronyms ....................................................................................................................... xiii Executive Summary........................................................................................................................................xv Rationales and Objectives....................................................................................................................................... xv Main Findings on Key Policy Issues under Investigation ....................................................................................... xvi Main Policy Recommendations .......................................................................................................................... xxiii Matrix of Key Policy Recommendations............................................................................................................ xxviii Introduction ................................................................................................................................................... 1 CHAPTER 1: Assessment of the Logistics and Transportation Industry of Congo’s Key Trade Corridors ...... 7 1.1 Background and Objectives ..............................................................................................................................7 1.2 Transport Infrastructure and Trade ...................................................................................................................9 1.2.1 The Brazzaville – Douala Corridor ........................................................................................................9 1.2.2 Pointe Noire – Cabinda Corridor ......................................................................................................11 1.2.3 Brazzaville – Kinshasa Corridor ..........................................................................................................12 1.2.4 Cross-Border Comparison ..................................................................................................................13 1.3 Regulatory and Institutional Framework .........................................................................................................14 1.3.1 The Brazzaville – Douala Corridor ......................................................................................................14 1.3.2 Pointe Noire – Cabinda Corridor .......................................................................................................17 1.3.3 Brazzaville – Kinshasa Corridor ..........................................................................................................19 1.4 Transport and Logistics Services ......................................................................................................................20 1.4.1 The Brazzaville – Douala Corridor ......................................................................................................20 1.4.2 Pointe Noire – Cabinda Corridor ......................................................................................................20 1.4.3 Brazzaville – Kinshasa Corridor ..........................................................................................................21 1.5 Regional Integration .......................................................................................................................................22 1.5.1 Transport Infrastructure and Logistics Services ...................................................................................24 1.5.2 Institutional and Regulatory Framework .............................................................................................25 1.6 Challenges ......................................................................................................................................................26 1.7 Reform Implementation and Way Forward .....................................................................................................27 iii iv Republic of Congo – Trade Facilitation Intervention CHAPTER 2: Strengthening the Transport Sector in Congo: Review and Action Plan ................................. 33 2.1 Background and Objectives ............................................................................................................................33 2.2 Regulatory and institutional framework ..........................................................................................................34 2.2.1 Institutional Framework .....................................................................................................................34 2.2.2 Legal and Regulatory Framework ........................................................................................................35 2.3 Structure of the Road Transport Industry .......................................................................................................36 2.3.1 Transport Actors and Auxiliaries .........................................................................................................36 2.3.2 Congo’s Road Transportation Industry Business Practice.....................................................................38 2.4 State of the Transport Sector ............................................................................................................................40 2.5 Road Transport Services and Infrastructure......................................................................................................42 2.5.1 Congo’s Truck Fleet ............................................................................................................................42 2.5.2 Road Safety in Congo .........................................................................................................................43 2.5.3 Freight Management in Congo ...........................................................................................................45 2.5.4 Internal Road Infrastructures System ..................................................................................................47 2.6 Regulatory Policies and Enforcement on Freight Transport Services.................................................................48 2.7 Recommendations ...........................................................................................................................................50 CHAPTER 3: Rehabilitating the Brazzaville Port – Assessing Port Performance and Port Connectivity ...... 53 3.1 Introduction ....................................................................................................................................................53 3.1.1 Brazzaville and the River Network ......................................................................................................55 3.1.2 Objectives ...........................................................................................................................................55 3.2 Institutional and Regulatory Framework .........................................................................................................55 3.3 Freight and Passenger Traffic at the Brazzaville Port .........................................................................................57 3.3.1 Freight Traffic .....................................................................................................................................57 3.3.2 Passenger Traffic ..................................................................................................................................57 3.4 Entry Procedures and Duties at Brazzaville Port ..............................................................................................57 3.5 Current Port Rehabilitation Projects ................................................................................................................60 3.6 Assessing Brazzaville Port Performance and Port Connectivity .........................................................................60 3.6.1 The Current State of the Port ..............................................................................................................60 3.6.2 The Organizational Plan .....................................................................................................................64 3.6.3 The Functional Plan and Activity ........................................................................................................64 3.6.4 Clearance Procedure Guidelines ..........................................................................................................65 3.6.5 The Legal and Regulatory Plan ...........................................................................................................65 3.7 Strategic Action Plan .......................................................................................................................................66 3.7.1 Infrastructure Planning and Logistics ..................................................................................................66 3.7.2 Organizational Plan ............................................................................................................................67 3.7.3 Procedural Plan...................................................................................................................................67 3.7.4 Functional Plan and Information Systems...........................................................................................68 3.7.5 Legal and Regulatory Plan ..................................................................................................................69 3.8 Master Plan .....................................................................................................................................................71 3.8.1 Trade and Customs Component .........................................................................................................72 3.8.2 Support Program to Facilitate Trade ....................................................................................................73 Table of Contents v CHAPTER 4: The Role of Trade Facilitation in Agriculture – A Value Chain Approach ............................... 75 4.1 Introduction ....................................................................................................................................................75 4.2 An Overview of the Agriculture Sector in Congo.............................................................................................76 4.3 Cassava Value Chain........................................................................................................................................78 4.3.1 Overview ............................................................................................................................................78 4.3.2 Cassava: Domestic and International Profile .......................................................................................79 4.4 Actors Shares in the Value Chain .....................................................................................................................85 4.4.1 Share of Actors in the Domestic Value Chain......................................................................................85 4.4.2 Prospect of Cassava Commercialization in the Sub-Region .................................................................88 4.5 Opportunities and Challenges in the Congo Cassava Sector ............................................................................89 4.5.1 Opportunities .....................................................................................................................................89 4.5.2 Challenges ..........................................................................................................................................90 4.6 Recommendations for the Development of Congo’s Cassava Sector.................................................................91 4.6.1 Production – Increasing Yields ............................................................................................................91 4.6.2 Processing – Shifting Away from an Artisanal Model ..........................................................................92 4.6.3 Transportation & Marketing...............................................................................................................93 References ..................................................................................................................................................... 95 Annexes......................................................................................................................................................... 97 Annex A1: Matrix of Detailed Action Plan .............................................................................................................97 Annex A1.1: Vehicle Operating of Trucking Business ...........................................................................................103 Annex A1.2: Regional Collaboration to Reduce Delays and Costs at Crossing Borders ........................................104 Annex A2: Transport Regulation ..........................................................................................................................105 Annex A3: Tables on Port Rehabilitation ..............................................................................................................116 Annex A4: List of People Consulted during the Intervention ...............................................................................122 List of Figures Figure 0.1: Cost of Export from CEMAC Countries by Cost Component, 2015, (in US$).........................................1 Figure 0.2: Cost of Import from CEMAC Countries by Cost Component, 2015 (in US$) .........................................2 Figure 1.1: Map of the Republic of Congo ..................................................................................................................8 Figure 1.2: Benchmarking CEMAC against other Economic Unions in the Region and Average of Low and Middle Income Countries .........................................................................................................23 Figure 3.1: Republic of Congo – Navigable Waterways..............................................................................................54 Figure 3.2: Port of Brazzaville – Total traffic (Boarding and Landing) ........................................................................58 Figure 3.3: Port of Brazzaville – Distribution of Traffic by Destination and Product ..................................................59 Figure 3.4: Global Circuit of Trade to Import in Brazzaville Port ...............................................................................61 Figure 3.5: Global Circuit of Trade to Export in Brazzaville Port ...............................................................................62 Figure 3.6: The Various Processes Path of International Trade ....................................................................................70 Figure 4.1: World Price for Cassava, 2000–2012 .......................................................................................................79 Figure 4.2: Geographical Distribution of Cassava Production Worldwide and within Africa......................................80 Figure 4.3: Top Cassava Traders in the World ............................................................................................................81 Figure 4.4: Per Capita Cassava Consumption by Country, 2011................................................................................82 vi Republic of Congo – Trade Facilitation Intervention Figure 4.5: Total Cassava Production by Country, 2011 ............................................................................................83 Figure 4.6: Selected Countries – Cassava Yield ..........................................................................................................83 Figure 4.7: Cassava Production and Consumption ....................................................................................................84 Figure 4.8: Forms of Cassava most Sold in Pointe Noire & Brazzaville ......................................................................84 Figure 4.9: Cassava Supply to Urban Centers ............................................................................................................85 Figure 4.10: Cassava Value Chain in Congo ................................................................................................................85 Figure 4.11: The Domestic Value Chain for Cossettes/Roui/Chikwangue ....................................................................86 Figure 4.12: Brazzaville – Price of Foufou (monthly average) .......................................................................................86 Figure 4.13: Cost Comparison of Two Different Transportation Arrangements ...........................................................87 Figure 4.14: Regional Value Chain Brazzaville-Kinshasa ..............................................................................................88 List of Tables Table 1.1: Length and Condition of the Roads Sections along the Brazzaville-Douala Corridor .................................9 Table 1.2: Export Values (XAF millions) and Quantities (100s tons) from the Republic of Congo to Angola ...........11 Table 1.3: Import Values (XAF millions) and Quantities (100s tons) from Cabinda to the Republic of Congo ........11 Table 1.4: Performance of Transport Corridors in Africa ..........................................................................................24 Table 1.5: Selected Trade Facilitation Indicators by region........................................................................................25 Table 3.1: Port of Brazzaville – Breakdown of the PABPS Staff by position and division ..........................................56 Table 3.2: Port of Brazzaville – Breakdown of the PABPS Staff by Age Group ..........................................................57 Table 3.3: Port of Brazzaville – Number of Traffic (Shipments) by destination, 2013 ...............................................60 Table 3.4: Brazzaville Port – Passenger Traffic ...........................................................................................................61 Table 3.5: Brazzaville Port – Planned Investments ....................................................................................................63 Table 3.6: Port de Brazzaville – Forecasts of Freight Traffic in the Port of Brazzaville ................................................64 Table 3.7: Republic of Congo – Laws and Regulations Related to Foreign Trade ......................................................66 Table 4.1: Cassava Flour (foufou) Price in Neighboring Countries, Price (XAF (US$)/kg ........................................88 Table A3.1: Inter-State River system: 2482 km .........................................................................................................116 Table A3.2: Secondary River system (For RC): More than 4884 KM ........................................................................116 Table A3.3: Port of Brazzaville – Freight Traffic ........................................................................................................120 Table A3.4: Port of Brazzaville – Traffic of Imported Goods from DRC, 2013 (in tons) ...........................................121 List of Pictures Picture 1.1: Offices of Administration Services and Vehicle Parking Area at Maboko ..................................................15 Picture 1.2: Ferry Waiting for Trucks to Cross the River Border Between Congo and Cameroon through Maboko ....19 Picture 2.1: A truck on the Brazzaville – Douala corridor (few km to Oyo) waiting for intervention ..........................44 Picture 3.1: Port of Brazzaville ....................................................................................................................................59 Picture 4.1: Cassava in Congo ....................................................................................................................................79 Picture 4.2: Cassava Processing in Congo ...................................................................................................................84 Table of Contents vii List of Boxes Box 1.1: The Mambili Bridge: Symbol of Economic Growth and Socio Political Unity ...........................................9 Box 1.2: Penalty Fares of the Trade services: A ‘Two Weights Two Measures’ Approach ..........................................16 Box 1.3: CEMAC Regional Economic Program (REP) 2009–2025 .......................................................................23 Box 1.4: The Cameroon – Chad and Cameroon – CAR Bilateral Conventions......................................................28 Box 1.5: Example – The Impact of an Economic Corridor on Cambodia and Lao Peoples’ Democratic Republic ...........................................................................................................31 Box 2.1: The Consensual Transport Master Plan in Central Africa .........................................................................41 Box 2.2: The World Bank – Total Partnership of Road Safety ................................................................................45 Box 2.3: Republic of Congo – Road Classification .................................................................................................46 Box 4.1: Republic of Congo – Government Actions Promoting Agricultural Development ...................................77 Preface T rade facilitation is one of the key engines of growth in an economy. Improving the quality and reliability of the trade facilitation infra- structure and services is a major building block for of transport and port infrastructure and service, which is critical for reducing transaction costs and attract- ing investments, contributing to the broader goals of inclusive growth by connecting rural communities to reducing transaction costs, attracting domestic and economic activities. foreign investment, and expanding access to economic opportunities. The Government of Congo, Rep. recog- This report aims to complement these efforts by mak- nizes that more needs to be done to address existing ing two key contributions. Firstly, it identifies the constraints to intra-regional trade. Indeed, efficient core trade facilitation bottlenecks facing the country, trade facilitation is central to achieving the objectives and explores options for mitigating these challenges. of Congo’s Vision 2025, whose overarching goal is to Secondly, it presents an action plan covering both the transform the country from a lower middle income expansion of physical infrastructure and the develop- economy to an upper middle income export-oriented ment of transport sector structure, regulation, and economy. institutional capacity; distinguishing between the short-and longer-term measures. The action plan is Attaining the country’s vision will require the address- expected to strengthen the strategy for sustainable ing of at least three key constraints. Firstly, low economic development and for informing dialogue investment in the development and maintenance of on required reform measures. the country’s physical infrastructure; secondly, an insufficient and ineffective capacity to deliver the The report’s recommendations are also expected to required transport and port services; and thirdly, a support more inclusive growth, and also ensure that lack of international competitiveness and export diver- said inclusive growth is sustainable. It is hoped that sification. Addressing these constraints will catalyze the report’s findings will be used to inform the design the development of modern transport infrastructure and implementation of the measures required to pro- and services, contributing to a reduction in the cost mote trade facilitation. Furthermore it is hoped that of doing business and thus increasing the country’s dialogue and collaboration with various stakeholders competitiveness. can be maintained going forwards to support Congo’s economic transformation. Several policies and other interventions have been implemented by the Government to address the coun- Ahmadou Moustapha Ndiaye try’s trade facilitation challenges. Some of these inter- The World Bank Country Director ventions prioritize improving the quality and reliability For the Republic of Congo ix Acknowledgements T his is the final report of the Republic of Congo Trade Intervention undertaken by the World Bank in close partnership with the Congolese Government. The overall coordination Politiques Economiques (CERAPE); (iii) Rehabilitating and modernizing the Brazzaville port—analysis and master plan, by Jameleddine El Kamel (Port man- agement consultant); and a document on regula- was done by Mr. Patrice Lambert Tsathy (General tion and capacity building in the transport sector, Director of External Trade) and Mr. Placide Mpan by Virginia Tanase (Sr. Transport Specialist). All of (General Director of Ground Transport) from the these documents were written following missions Government side, along with Mr. Emmanuel Pinto in Congo coordinated by Etaki Wa Dzon (econo- Moreira (Program Leader), Mr. Dominique Njinkeu mist) in Brazzaville and Ephraim Kebede (Trade spe- (Program Coordinator), and Mr. Fulbert Tchana cialist) from Washington. Preliminary drafts of the four Tchana (Sr. Economist) from the World Bank side. chapters were discussed with the Government coun- The report is based on an analytical work program terparts in February 2015, and comments received conducted jointly by the Government and the Bank, during these consultations were taken into account which encompassed the following elements:(i) inves- in the finalization of the report. tigating the operating environment of the Brazzaville port; (ii) assessing Congo’s main trade corridors, spe- This final report was written by a World Bank team cifically Brazzaville-Kinshasa, Brazzaville-Douala, and led by Fulbert Tchana Tchana and Ephraim Kebede. Pointe Noire-Cabinda; (iii) reviewing the existing legal Chapter 1 was prepared by Ephraim Kebede and and regulatory framework of the road transportation Fulbert Tchana Tchana based on a background paper sector and identifying niche interventions relevant in by Guy Tchinda Kemtsop. Chapter 2 was prepared by improving its performance; and (iv) exploring the role Virginia Tanase, Ephraim Kebede, and Fulbert Tchana of trade facilitation in the agricultural sector. Tchana. Chapter 3 was prepared by Ephraim Kebede and Fulbert Tchana Tchana, using a background paper In addition to this comprehensive report, four stand- by Jameleddine El Kamel. Chapter 4 was prepared alone documents have been prepared in French by by Ephraim Kebede, Etaki Wa Dzon, and Fulbert colleagues or external consultants, and shared with Tchana Tchana. All of these chapters benefited from the Congolese authorities: (i) The Trucking Industry a background paper and a database prepared by the on Brazzaville-Douala and Pointe Noire–Cabinda CERAPE. Karima Laouali Ladjo and Josiane Maloueki Corridors, by Guy Augustin Kemtsop (Transport Louzolo provided valuable support in the prepara- Economist Consultant); (ii) A survey based study on tion of the report. In addition, Maude Valembrun, cross-border trade between Congo Rep. and DRC, by Lydie Ahodehou, Appolinaire Sainteli Bouenda, and Centre d’Etudes et de Recherche sur les Analyses et Chantal Modeste Nonault also provided valuable xi xii Republic of Congo – Trade Facilitation Intervention administrative support on several segments of this (Economist, GMFDR). The team benefited from the report. The report also benefited from comments and support and guidance of Emmanuel Pinto Moreira, suggestions from Amadou Oumar Ba, Mohamadou Dominique Njinkeu, Kevin Carey (Lead Economist, Hayatou, Calvin Zebaze Djiofack, Alexandre Dossou, GMFDR), Albert G. Zeufack (Practice Manager, and Alain Tienmfoltien Traore. In addition, the report GMFDR), John F. Speakman (Practice Manager, was proofread by Nathan Weatherdon. GTCDR), Yisgullish Amdé (Country Program Coordinator, AFCCD) Sylvie Dossou/Djibrilla Adamou The peer reviewers were: Olivier Hartmann (Sr. trade Issa (Country Manager, AFMCG), and Eustache facilitation specialist, GTCDR), Charles Kunaka, (Sr. Ouayoro/Jan Walliser/Ahmadou Moustapha Ndiaye trade specialist, GTCDR), and Calvin Zebaze Djiofack, (Country Director, AFCC2). Abbreviations and Acronyms AfDB African Development Bank EQG Equatorial Guinea ATC Agence Transcongolaise des EU European Union Communications EWEC East-West Economic Corridor AU African Union FAO Food and Agriculture Organization of ASYCUDA Automated SYstem for CUstoms DAta the United Nations BDS Business Development Services FSA Fonds de Soutien à l’Agriculture CAR Central African Republic GDP Gross Domestic Product CEEAC Communauté Économique des États de GIS Geographic information system l’Afrique Centrale GPS Global Positioning System CEFACT Centre for Trade Facilitation and GUD Single Window Clearance Electronic Business GUOT One Stop Shop for Cross-Border CEMAC Economic and Monetary Community of Transactions (Guichet Unique des Central Africa Opérations Transfrontalières CERAPE Centre d’Etudes et de Recherche sur les HQCF High Quality Cassava Flour Analyses et Politiques Economiques ICRC International Committee of the Red CFCO Chemin de Fer Congo Ocean Cross CIB Congolaise Industrielle du Bois ICT Information and Communications CNSA Centre National des Semences Améliorées Technology CNTF Chantier Naval et transports Fluviaux IFAD International Fund for Agricultural COMESA Common Market for Eastern and Development Southern Africa IFC International Finance Corporation DGGT Direction Général des Grands Travaux INS National Institute of Statistics DGRST General Delegation of Scientific and ITC International Trade Centre Technical Research IITA International Institute of Tropical DGTT Direction Générale des Transports Agriculture Terrestres IT Information and Technology DPST Transport Policy Statement JRCC International Commission of the DRC Democratic Republic of Congo Congo-Oubangui-Sangha basin ECCAS Economic Community of Central LGA Local Government Authority African States LPI Logistics Performance Index (LPI), ECOWAS Economic Community of West African METP Ministry of Equipment and Public Works States MFI Micro-Finance Institution xiii xiv Republic of Congo – Trade Facilitation Intervention MTCAMM Ministry of Transport, Civil Aviation SCTP Société Commerciale des Transports et and Marine Marchande des Ports MUCODEC MUtuelles CCngolaises D’Epargne et ADA Agriculture Development Strategy de Crédit SDDR Rural Development Master Plan NDP National Development Plan SDV Société Delmas Viljeux NGO Non-Government Organization SEC Southern Economic Corridor NPN National Priority Network SEFYD Société d’Exploitation Forestière Yuan NR National Road Dong NTP National Transport Plan SPM Sanitary and Phytosanitary Measures ONEMO Office Nationale de l’Emploi et de la SSA Sub-Saharan Africa Main d’Œuvre (National Employment SSATP Sub-Sahara African Transport Policy Office and Labor) TBT Technical Barriers to Trade PABPS Port Autonome de Brazzaville et Ports TTFP Transport and Transit Facilitation Secs Program PADE Support to Economic Diversification UN United Nations Project (Projet d’Appui à la UNICONGO Union ¨Patronale et Interprofessionnelle Diversification de l’Economie) du Congo PDARPR Projet de Développement Agricole et USAID United States Agency for International de Réhabilitation des Pistes Rurales Development PRODER PROjet de DEveloppement Rural VOC Vehicle Operating Costs PNSA Programme National pour la Sécurité WATAC World ATA (Admission Temporaire/ Alimentaire Temporary Admission) Carnet Council REP Regional Economic Program WB World Bank ROC Republic Of Congo WHO World Health Organization RMS Road Maintenance Strategy WTO World Trade Organization RF Road Fund XAF Central Africa Currency SADC Southern African Development Community Executive Summary Rationales and Objectives on every aspect of the Doing Business agenda. On the infrastructure front, the Government has stepped-up Since its political stabilization, the Republic of its efforts to provide the country with road and other Congo has enjoyed a favorable macroeconomic transportation infrastructure to ease inter-regional environment; however, structural bottlenecks trade. In addition, the Government has invested heav- remain the main impediments to competitiveness. ily to achieve extension and modernization of ports Since 2003, at the end a period of political unrest and (Pointe-Noire) or rehabilitation (Brazzaville). civil-war, high commodities prices and some structural reforms have paved the way for a return to growth, Due to poor trade facilitation, Congo hasn’t as yet with real GDP increasing at an average annual rate of been able to benefit from trade with its neighbors. 5.5 percent during the period 2008–2014. As a result, Congo’s intra-regional trade lags behind compared to the Congo is now classified as a low-middle-income trade with other parts of the world. Despite the proxim- country. However, the country is still facing challenges ity, Congo’s trade with Africa in general, and CEMAC in stimulating a broad-based, diversified economy that in particular, is too small, making up just 6 percent and generates jobs, especially for young people. In addi- 1.6 percent of Congo’s total trade, respectively. Poor tion, it continues to face structural bottlenecks that trade facilitation is the main reason for this lack of trade impede its competitiveness. These difficulties include: between Congo and its neighbors. There is, however, i) all of the key aspects of doing business (the World potential to expand cross-border trade. There are large Bank’s Doing Business Indicators consistently rank the markets in Angola, Cameroon, and DRC, with over country in the bottom 5 percent of countries world- 110 million consumers offering large opportunities for wide); ii) the Government’s efficiency and quality of Congolese producers. Removing barriers to trade facili- regulations; and iii) a deficiency of basic infrastruc- tation between Congo and its neighboring countries is tures, services, and trade logistics constitutes, etc. of strategic importance for closer economic integration in the CEMAC region and beyond. Linking up these To tackle these bottlenecks, the Government is countries through improved infrastructure, better mar- implementing a structural reform program to create ket access, greater transparency, and simplified border a private sector-based market economy. This reform procedures could help support the ongoing reforms, and program includes the improvement of regulatory frame- specifically initiatives aiming at breaking down internal work and of infrastructure. On the regulatory front, barriers within CEMAC, where progress has been slow. the Government has created a public body to promote private investment in August 2012, and it worked with The objective of this trade facilitation interven- the World Bank to identify and draft new regulations tion is to help the country to achieve its full xv xvi Republic of Congo – Trade Facilitation Intervention potential on inter-regional trade. This interven- This report presents both the work done during the tion is designed to develop an action plan, while intervention as well its findings; key recommendations also systematically analyzing and identifying the from the report are presented in the form of an action main opportunities and constraints relating to plan. The report is organized around four chapters, trade in Congo. Specifically, the objectives of this with each covering a component of this trade facilita- intervention are: i) assessing Congo’s main trade tion intervention. An action plan matrix is presented corridors; ii) reviewing the existing legal and regu- at the end of the report to summarize key trade facili- latory framework of the road transportation sector, tation recommendations that the Government should and identifying interventions relevant to improving consider to improve its inter-regional trade. the performance of the sector; iii) investigating the operating environment of the Brazzaville port and proposing a master plan for port rehabilitation; and Main findings on Key Policy Issues iv) exploring the potential role of trade facilitation under Investigation in the development of the agriculture sector, using a value chain analysis. First issue: Understanding the economic dynamics of Congo’s major trade corridors. The intervention focuses on three of Congo’s main corridors: Brazzaville-Douala, Pointe Noire-Cabinda, Cross-border trade in Congo essentially takes and Brazzaville-Kinshasa. The Brazzaville-Pointe place in and around its three major trade corridors. Noire route is another important trade conduit for Congo trades with its five neighbor countries (Angola, Congo, but since the road is currently under reha- Cameroon, CAR, DRC, and Gabon). There is at least bilitation any assessment would only be meaningful one trade corridor between Congo and each of these after the completion of the construction. In addi- five countries, however, the three major trade corri- tion, the intervention does not cover the port of dors are: i) along the northern border with Cameroon Pointe-Noire, because in the Doing Business reform (Brazzaville-Douala, especially at Ouesso and Souanké), agenda framework, the Bank is already working on ii) along the eastern border with DRC (Brazzaville- this port. Finally, cassava has been selected for the Kinshasa, along the Congo river between Mindouli analysis on the potential role of trade facilitation in and Ngabé); and iii) along the southern border with agricultural exports. The primary objective of this Angola, near Cabinda (at Nzassi). The other corridors, analysis is to unleash Congo’s potential in the agri- such as i) the southern border with Gabon (Ngongo); cultural sector, not as such promoting the cassava ii) along the western border with Gabon (between sector. However, cassava is an important commodity, Lékéti-Boundji and Ewo); and iii) the Brazzaville— as it is the fourth most consumed staple food in the Bangui corridor on the Congo and the Ubangui river, world, after rice, maize and wheat. In addition, the are less important in terms of the volumes of traffic. cassava sector is also considered by the Government as one of the priority sectors for development as a There is very little detailed information on trade strategy for economic diversification and food secu- flows on these main corridors, however, or on trade rity. Understanding the constraints across the cassava between Congo and these three main neighboring value chain is crucial, as this sector involves family, countries. Firstly, official aggregate data significantly commercial, and agro-industrial enterprises in dif- underestimate the actual volume of trade between ferent regions of Congo, and represents a potentially Congo and DRC along the Brazzaville corridor. In important export for both regional and international fact, recorded imports from DRC are barely over 1 markets. percent of total imports in value terms, and there is Executive Summary xvii lack of detailed trade data between the two countries. Congo’s trade barriers because they require excessive Secondly, based on the information from customs documentation with unpredictable clearance proce- service and various stakeholders, trade exchanges dures, which, since there is no automation or ICTs, between Pointe-Noire and Cabinda take place through must be done manually. Furthermore, customs proce- both road and water ways. The overall trade between dures lack transparency, predictability and consistency, the countries appears to be dominated by goods with no clear terms of reference for customs officers. heading to Cabinda through the port of Pointe-Noire. This gives customs officers freedom of action to seek According to the data available, very few products are informal payments. In addition, the limited opening exported to Cabinda by Congo, apart from some agri- hours of the passenger platform contribute to the over- cultural products, for which accurate data is almost crowding of the port, resulting in delays. Currently, it is non-existent. Thirdly, there is almost no data on trade only open between 9:00 am and 4:00 pm on weekdays, (trucks) along the Brazzaville-Douala corridor. and is closed on Sundays by 12:00 pm. These administrative costs and inefficiencies have The Brazzaville-Kinshasa Corridor suffers from driven some operators to take advantage of loop- uncoordinated and complicated customs holes in the regulations by shifting an important procedures that increase transaction costs and share of trade into informal trade. In fact, until April exasperate informal trade flows. 2014 prior to the Mbata ya Bokolo operation (expulsion The Brazzaville-Kinshasa corridor suffers from a of DRC illegal immigrants), the passenger platform was lack of coordination and cooperation among agen- a major gateway for freight. In fact, many people with cies both within Congo and in neighboring DRC, handicaps were instrumental in this informal trade, and also suffers from complicated customs proce- given that the regulations allowed them to cross the dures and discontinued services. Many Government border with goods without being subjected to custom agencies operate at the port: external trade, customs, and other administrative procedures. This intervention policy, agriculture, etc. Each of these agencies has its has been unable to assess the size of the informal trade own procedures, and there is insufficient coordination activity on this corridor, because during the interven- between these agencies. In fact, border agencies conduct tion period the passenger route and terminal was closed their operations in a very dissimilar manner, and there as the result of Mbata ya Bokolo operation. is a lack of human and technical resources (information systems) necessary to manage the movements of goods and passengers through the port. The agencies operating While improved road infrastructure on the at the port do not share the same computerized informa- Congolese side, the Brazzaville—Douala Corridor tion. These difficulties lead for example to inconsistent has had a significant impact on the rise of data being reported in the documents (e.g. manifest, bill movements of goods and people, administrative of lading) established by the Department of Customs. problems and limited border opening hours raise transaction costs and create delays. In addition, customs procedures are considered Over the past few years an increasing number of to be very complicated, and it is often unclear as trucks have begun operating between Brazzaville to which requirements and procedures should be and Douala. The network for this inbound freight followed. Customs procedures at the port are too begins at Douala port, with Brazzaville as the destina- complicated, poorly defined, and lack organized opera- tion. Until recently, freight used to be offloaded at the tional services. The cumbersome customs regulation border town of Ouesso, from where it was transported and uncoordinated administrative operations add to to Brazzaville using the waterways of the river Sangha. xviii Republic of Congo – Trade Facilitation Intervention In recent years however, transportation demand on of goods and people, the high number of checkpoints the road has been rapidly increasing due to improved also causes delays and may also leave sites unmanage- road infrastructures, with a considerable reduction of able and deemed at a high risk of corruption. The time travel and delivery time. A “cross-border trade survey” spent on traffic check points varies from few minutes (World Bank, 2014b) shows that the truck traffic to hours depending on the case, but it is similar across flow on this corridor has surpassed the traffic on the all corridors. The high number of checkpoints has Cabinda—Pointe Noire.1 prompted transporters to make informal payments to avoid delays. For example, along Brazzaville-Douala corridor, there are over 30 checkpoints, which cause The Pointe Noire – Cabinda Corridor has considerable delays and add unnecessary costs. been serving the two countries for many years; According to the truckers, the cumulative time spent however, Congo and Angola have not yet made at checkpoints ranges from three hours along the binding agreement to regulate trade activities Pointe Noire-Cabinda corridor to about 6 hours along along this corridor. Brazzaville-Douala corridor. When the border cus- Goods transported from Pointe Noire to Cabinda toms clearance is added to this, the time spent along dominate the overall trade exchange between the corridors is considerable. Unlike truckers with Congo and Angola. The goods are largely dominated non-perishable goods, drivers with perishable goods by building materials, which make up 61.4 percent of are commonly willing to ‘pay’ any informal money to the goods passing through the port to Cabinda, fol- avoid/limit their produce from decaying due to pro- lowed by food products (19 percent). In fact, very few longed delays. In the past three years, such informal products are exported to Cabinda by Congo, apart from payments have increased from XAF 10,000 to 25,000 some agricultural products, for which accurate data is (US$20 to 50) at each checkpoints. almost non-existent. Trade in food products dominates the overall exchanges between Congo and Angola. In the absence of a binding bilateral trade agreement While food accounts for about 39 percent of Congo’s and regulatory framework, trade along the Pointe imports from Angola, it constitutes only 19 percent of Noire-Cabinda corridor is subject to fraudulent its exports. Interestingly, 31 percent of imports from activities and increased transaction costs. Congo has Angola are made up of wood products, largely using no signed bilateral convention with Angola in regard Congo as a transit gateway. Congo’s exports to Angola to freight transportation. As a result, there are no well- are dominated by building materials, accounting for 61 defined rules and regulations to control the movement percent of the total exports to this country. of people and goods along this corridor. In addition, it has been observed that there are unskilled youths operating at the border posts as freight forwarding Second issue: Cross-border trade suffers from agents, who are commonly known as “smugglers” and the absence of coordination and cooperation “Angola brokers”. These “smugglers” work with the among agencies, from numerous checkpoints, importers and exporters of both countries. Such infor- and from illegal taxes. mal activities, although they have the support from the local authorities as a means to reduce unemployment, Numerous checkpoints exist along Congo’s main create conditions for rent seeking activities, which in trade corridors, particularly on Brazzaville-Douala corridor, where illegal payments (taxes) are sys- 1 The border between Congo and Cameroon has at least three crossing tematically made to officials. While they improve points. Unlike the crossing point near Ouesso, the other crossing the road infrastructure and enhance the movements points are operated by private timber companies. Executive Summary xix turn raises transaction costs. Furthermore, while Angola Freight movements were astonishingly slow when all and Congo speak different languages (Portuguese and delays were taken fully into account. At an effective French, respectively), there is no formal agreement speed of 6.1 kilometers per hour, they barely move between them on which specific language to use for faster than a horse. their trade documents. Currently, import freight docu- ments in English need to be translated into French at Transport corridors in the Central African perform the first stage (for services at Port Pointe Noire) and significantly worse than all other regions in Africa. then into Portuguese for clearance in Angola. This often Only half of the regional road corridors are in good leads to delays in the clearing process, the over estima- condition, alarmingly less than other parts of Africa, tion of importation prices, and many other problems. and trade density is lower. The implicit velocity of freight (when stops and delays are factored in) is only 6.1 kilometers per h. Transport prices on the Douala to Third issue: Poor trade facilitation failures N’djamena route are three times higher than in Brazil hamper CEMAC region integration much and almost two times the cost of moving trade from more than other regions in the world and Lusaka (Zambia) to Durban (South Africa). Given all slowing trade flows between member of these figures, it is not surprising that there is a much countries. lower trade density in Central Africa. The country’s underdeveloped transport infrastruc- Individual markets in the CEMAC/ECCAS are ture is a major hindrance to the efficiency of the generally very small, but pooling markets (through regional corridors. The CEMAC/ECCAS region is trade facilitation) can result in greater economies of characterized by poor road infrastructure and railway scale. The region is known for its informal cross-border networks, and this adds to the cost of goods and slows trade and unrecorded trade, which takes place across transport within the region. CEMAC’s infrastructure the countries. The trade facilitation initiatives suggested ranks below other parts of Africa and the world in in this report, taken at regional level, could help the general. Paved road density, at 5.1 kilometers per 100 countries involved by converting informal traders into square kilometer of land, is barely a fraction of the formal traders, which in turn would help the respective density in ECOWAS, which is the next worst African Governments to develop their revenue bases. region on this indicator. Similarly, in terms of its rail line network, CEMAC ranks below all other regions in the world. The gap between CEMAC and the best per- Fourth issue: Insufficient organization of former from the Africa region (the regional leader) on transportation providers and lack of freight both indicators is huge, indicating that CEMAC will management constitute major sources of have to make a significant effort to catch up with other inefficiency and low profitability. parts of Africa, let alone the rest of the world. The freight forwarding industry in Congo faces Surface transport (road and rail) of goods in serious problems due to a fragmented structure, Central Africa is generally much slower and cost- high operating costs, and the inefficiency of related lier than in other African regions, and elsewhere in services. The overall management of freight is not the developing world. Road transport costs and prices under the responsibility of any designated entity. across Central Africa are about US$0.12 per tonne- Therefore, freight owners communicate directly with kilometer, well above the global benchmark of rates of transporters to convey their goods to designated des- between US$0.01 and US$0.04 per tonne-kilometer. tinations. In some cases, freight forwarders or other xx Republic of Congo – Trade Facilitation Intervention intermediary actors facilitate the business. Freight Fifth issue: Poor implementation of road owners are represented by either intermediaries/ transport regulations affect transport costs middlemen or freight forwarders. and hinder the development of the road transport sector. There is no bilateral or regional framework/agree- ment on freight management between Congo and Congo’s axle load regulation is weak and not its neighboring countries. Road freight transport fully enforced, which hampers road safety and management, in general, incorporates many key increases highway maintenance costs. To limit elements related to transportation services, such as road damage, within the CEMAC countries the the number of vehicles allowed to provide services axle load maximum limit has been fixed at 13 tons. between the two countries, procedures, documenta- Congo has yet to introduce more complete controls tion, and penalties. Despite their proximity and the and fully implement this regulation. There are a opportunities to enhance trade, there is no bilateral few weigh bridge stations at different locations, but agreement either between Congo and Cameroon or most of them are not functioning properly due to between Congo and Angola for freight transportation. obsolete equipment and, in some cases, a lack of Such a referenced framework, if in place, would have human resources. Given the significant number of contributed to: i) regulating the freight distribution truckers in the informal sector and their preference between the operators of various countries (Congo— for overloading trucks to minimize costs, enforc- Cameroon and Congo—Angola) and consequently ing this regulation will pose a daunting challenge. ensuring a minimum protection to respective truck- In light of the lack of workable guidelines for the ing industries; ii) regulating traffic operations and officials, and truckers’ interest to bypass some regu- procedures along targeted corridors; iii) defining lations, there is no doubt that both transport opera- and establishing check points (number, locations, tors and weighbridge officials will be susceptible to types of services involved, etc.) along corridors; and corruption. iv) serving as an observatory entity for freight and traffic operations, etc. Road safety and overloading are also important operational issues in the road transport sector. Furthermore, about one-fourth of trucks oper- Despite rapid increases in vehicle ownership and ating between Congo and its neighbors return increases in crashes on the road network, little atten- empty due to the current restrictive regulations. tion has been given to promoting road safety. There The “cross-border survey” revealed that 22 percent is no institutional framework addressing road safety. of trucks return empty to their origin, of which 39 Moreover, there is no entity responsible for truck percent were returning from Cameroon to Congo and parking facilities in Congo. There are virtually no 61 percent were returning from Congo to Cameroon. rest areas along all of the main roads in Congo, with Some transporters cannot secure cargo for return trips the exception of limited parking spaces near to the because of the restrictive regulations in place, which two major ports—Brazzaville and Pointe Noire. The require load pickups to be from the country where lack of rest areas is also a safety hazard for other road the trucks are registered. This increases the number users, including passenger transporters and private of empty backhauls and thus hampers the trucking motorists. The availability of further rest areas would companies’ profitability and competitiveness. Most of help truck drivers to make better decisions about the transporters along the Brazzaville-Douala corridor where to stop and for how long, which in turn would are affected by this regulation, as the majority of the make drivers more productive and would make the trucks are registered in Cameroon. roads much safer. Executive Summary xxi Sixth issue: Inadequate technical and Seventh issue: In recent years, the Government human capacity at various levels of the has invested in the rehabilitation of the transport sector hampers its development. Brazzaville port but bottlenecks exist, which hamper the port’s ability to play its role in Inadequate technical and human capacity is a daunt- regional trade with Congo. ing challenge across the road transport sector. There is a limited qualified workforce across the transport Despite the ongoing efforts to rehabilitate the sector, including at managerial and technical levels. On Brazzaville port, its efficiency is affected by a lack the one hand, there is a lack of proper human resource of maintenance and dredging, a lack of essential management, including in the staff recruitment and equipment, and a poor transportation network. selection process, career development and provision The poor maintenance and dredging of the river ways of training for staff. On the other hand, there has leads to a partial silting of the port for two to three been a sustained loss of well trained and experienced months per year. As a result, the river system is only human resources due to retirement. Currently, the operational for part of the year as some of the waterway sector is not adequately funded to finance staff train- routes are not navigable during the low water period, ing programs, and hence staff are inadequately trained which can last for up to six months. Meanwhile, rolling and equipped. The closure of the road maintenance and aging of load handling equipment create a long training schools has affected the technical capacity to delay in freight being dispatched at the port gateway. maintain infrastructure and has led to inadequacies in Moreover, the poor transportation network strongly work programing. This problem highlights the need impedes the performance of the port, due to a lack of for a capacity building program that both targets the connections to other modes of transportation and, in training and mentoring of professionals and also identi- addition, the poor current state of the road between fies opportunities for leveraging resources for financing Pointe Noire and Brazzaville. the human resource development. In addition, the institutional and regulatory frame- In regard to transport operators, currently there is work of the Brazzaville port is still weak, and there no formal training or mandatory minimum training is no clear overall plan of rehabilitation. As pointed requirement that drivers must complete before they out above, the main factors that affect the efficiency of can transport passengers or goods. In the current the Brazzaville port are a lack of coordination between transportation system, operators are not required to the various agencies and unclear customs procedures. go through a standard training program. It is recom- This lack of coordination is due to the port’s weak mended that mandatory training should be put in institutional and regulatory framework. Moreover, the place so that drivers can obtain operator accredita- ongoing rehabilitation of the port is being carried out tion. Due to the lack of truck driver training—both in without a precise master plan, which would detail the the classroom and on the road—drivers in Congo in responsibilities of the various actors involved in the general are not well prepared to safely drive a truck. It rehabilitation activities. is important to develop a minimum training require- ment for individuals applying for a commercial driver It is worth mentioning that even with the proposed license for the first time or upgrading from one class road-rail bridge to link Brazzaville and Kinshasa, to another. Drivers must demonstrate adequate truck the Brazzaville port will remain critical for trade operation abilities and safety measures. Truck drivers on the river Congo. This road-rail bridge project must adhere to driving regulations that ensure the will link the two cities, and will ensure the continua- condition and capacity of the vehicle is maintained. tion of the Tripoli-Windhoek Trans-African Highway xxii Republic of Congo – Trade Facilitation Intervention Corridor, the Central African trunk of which comprises cost of transportation accounts for a significant the Cameroon-Chad-Congo-DRC-Angola link, supple- portion of the value added of cassava products. mented by a feeder road connecting Bangui. While this Up to 5 percent of cassava production can be lost at road-rail bridge is expected to generate greater integra- the transport stage. Cassava producers in the rural tion in the region, the Brazzaville port will continue to Congo are constrained by a lack of all-weather roads be an important trade conduit for three main reasons. and affordable transportation, which are deemed to Firstly, the bridge is expected to be built at Maluku site, be the basic needs for development in the sector. which is 60 kilometers upstream from Brazzaville and Long transit times affect the quality of the cassava, Kinshasa. Secondly, the port will provide an alternative as it commonly causes the tubers to begin breaking means of transportation for bulky goods, as well as for up. Farmers, in general, are unable to find trucks to people traveling between the two cities. Thirdly, the send their products to larger market centers, or they port will continue to be the main trade infrastructure find it too expensive. In addition, the current mar- between Brazzaville, Northern Congo and CAR. ket is very much fragmented, and there is a lack of any structured network between producers and the market. The majority of cassava trade in rural areas Eighth issue: Congo has been unable to is traditionally done by the producers themselves, export its agriculture products such as with a small number of actual traders. In the urban cassava because of transport constraints, areas on the other hand, cassava is distributed by limited access to market, lack of improved traders, who transport the products from the farms post-harvest technologies such as storage to the market. Furthermore, transporters account for and processing, and low access to market about 25 percent of the value added, while retailers information. account for ten percent. There are two transportation arrangements (colisage and location) that significantly A lack of storage facilities results in losses of up determine the greater share of profits. Farmers pay to ten percent of cassava at the production stage. less for transport through colisage, as the merchant Although crop diseases can also affect production, the offering colisage services is less dependent on trans- main cause for wastage of cassava at the production port margins to turn a profit. Instead, the merchant stage is the lack of storage facilities for ripe cassava, is able to collect his margins from both transporta- which is instead left in the ground un-harvested. tion and marketing. Cassava is mainly grown as a subsistence crop in Congo, produced by small-scale farmers who then Finally, access to cassava market information is sell the surplus. Therefore, these farmers commonly key for the sector’s development at various levels leave their produce underground until they decide to of the cassava supply chain. Weak communication take it to market. However, the availability of storage infrastructures hamper the efficient flow of products facilities (that could be provided by an actor along to markets, and slow the exchange of market infor- the chain between producers and traders or proces- mation upstream in value chains. The lack of market sors) would reduce wastage and enhance productiv- information for cassava affects not only farmers but ity. This could also serve as an incentive to transform also other actors along the chain, by limiting their farming into being a more commercially-oriented and decision on adding value. Due to the lack of access progressive activity. to reliable market information, cassava producers are unable to plan production to meet market demands, While the poor transport infrastructure and which would enable them to negotiate prices on a more market network contribute to wastage, the high ‘even footing’ with wholesalers and retailers. Executive Summary xxiii Main Policy Recommendations understand that they are accountable for their actions. It is important to develop a guideline that should be First message: Congo has a unique followed by the officials at these checkpoints and bor- opportunity to become the regional ders. There should be also a mechanism that monitors trade hub in the Central Africa, but whether the guidelines are being properly followed. unleashing that potential requires a range of mutually-reinforcing and well-designed Moreover, the Government could harmonize and policy interventions, including reducing streamline procedures at border crossings with the number of checkpoints, creating the neighboring countries. This report highly rec- a more modern and efficient customs ommends that the Government develop harmonized environment, and improving coordination regional border inspection and clearance procedures, and cooperation between Government including the establishment of Joint Border Posts. A agencies. joint one-stop border post operation would reduce transport time and costs. This could be achieved by The Government could develop and implement establishing a single inspection on one side of the a comprehensive customs regulatory framework, border that clears the load according to customs rules which could be aligned with international stan- of both the country that is being exited and the one dards and clearance norms. Congo needs to under- that is being entered. A recent study has shown that take fundamental regulatory reform, encompassing implementing a one-stop border post could reduce policies and legislation that consider the need for transit time by up to 50 percent (Nathan Associates, facilitating and reducing the cost of administration. 2011). It is clear that reducing transit times would This should especially be related to the simplification reduce costs as well. of import and export procedures (not limited to cus- toms), the elimination of waivers, and, importantly Congo should consider initiating regional eco- from the revenue performance perspective, the stream- nomic corridors within the CEMAC. Given the lining of tax exemptions. In addition, it is suggested poor infrastructural connectivity and the lack of syn- that the reform should encompass a medium- to long- chronized customs processes across the region, estab- term plan for adoption of common trade documenta- lishing regional economic corridors could improve tion standards and procedures in the region. the state of trade facilitation. The economic corridor approach could be a viable approach in addressing The Government also needs to establish more effec- the regional transport routes, not only as a means tive management for its borders and checkpoints. of transporting goods and services (or as a gateway Firstly, it is necessary to set up a space for information for land-locked countries in the region), but also as exchange and periodic meetings among all agencies a tool for stimulating socioeconomic development operating at the borders and checkpoints. This coordi- in the areas along the corridor. Economic corridors nation and cooperation will allow each agency to have accomplish this by creating industry and social facili- a better understanding of the mandates of the other ties in conjunction with transport infrastructure. As agencies and avoid multiple inspections of goods, and a result, they develop rural and border areas, create hence will reduce costs and delays. Secondly, the num- employment, and improve the earnings of low-income ber of roadblocks needs to be reduced to a reasonable groups. Political boundaries thus cease to be eco- number, with more transparent and consistent cus- nomic boundaries. In short, the economic corridors toms. Furthermore, more effort should be given to train approach transforms transport corridors into engines staff to better understand their responsibilities, and to of socioeconomic development. xxiv Republic of Congo – Trade Facilitation Intervention Furthermore, this report recommends the build- its neighbors is another factor that affects trade flows. ing of a long overdue bridge between Brazzaville Therefore, to fully benefit from longer service hours, and Kinshasa. Despite their proximity, cross-border this report recommends that the Government should exchanges between Brazzaville and Kinshasa are lim- establish comparable adjustments at customs offices ited. Since the cost of transportation is the main cul- on the other sides of the respective border crossings. prit, building the road-rail bridge would provide an alternative mode of transportation and hence reduce costs. In addition, the one-stop border customs clear- Second message: Congo is increasingly ance, which has been proposed along with the bridge, becoming a land bridge for goods and would reduce transaction costs. Furthermore, the eco- people moving between Cameroon and nomic benefit of building this bridge outweighs the DRC, and between other parts of the socio-political risks or concerns of the two countries. world and Angola (Cabinda). Therefore, The bridge would facilitate better transportation of developing modern and efficient logistics goods and people, which in turn would enhance trade would reduce costs for exporters and between the two countries. Apart from its impact on importers and, would help to promote the trade growth and development through greater inte- country’s stance as a regional hub. gration, this cross-border infrastructure, by increasing mutual dependence, could reduce the likelihood of To take advantage of its strategic location, Congo regional conflict. Such investments involve coordina- needs to improve its logistics infrastructure and tion and cooperation between the two countries. The logistics services. The road infrastructure develop- building of this bridge between Democratic Republic ment in Congo is increasingly turning the country into of Congo (DRC) and the Republic of Congo will not a land bridge for goods and people moving between only link the two countries, but will also speed up Cameroon and DRC, and between other parts of the regional integration. world and Angola (Cabinda). To take full advantage of this, the country should build additional logistic Finally, Congo needs to make trading across bor- facilities at border posts and along the corridors, such ders easier by synchronizing and extending cus- as warehouses, offices, parking, and rest areas (includ- toms operating hours at the borders and the ports ing sanitation facilities). The Government could build of Brazzaville and Pointe-Noire. Currently, customs parking and resting areas for road transport operators, and other border and port agencies are operating only which would reduce road crashes due to fatigue, and from 8am to 4pm, with a one hour lunch break; i.e., it could also conduct control activities such as vehicle they are open for only eight hours a day. The long inspections. The construction of road infrastructure truck lines forming at the beginning of each day and should be the first step in the development of trade after lunch breaks indicate that continuous operation infrastructures in the country, since they help in con- for 24 hours each day are necessary to prevent truck necting market centers and the gate port. Other logis- bunching and ease trade constraints. Best international tic infrastructures are also required to ensure a better practices indicate that, according to the Doing Business functioning of the infrastructural component of the assessment, extending the operating hours for customs whole trade system to set up. These include infrastruc- and ports could make trading across borders easier. ture at border posts and along constructed corridors. Extending the operating hours would reduce conges- tion and thus would reduce border crossing time for This report strongly recommends that a compre- goods and lower transport costs. The difference in hensive transport data system be established. The office hours at border crossings between Congo and intervention has created a comprehensive database Executive Summary xxv on trade activities and the nature of trade facilita- to increase the overall productivity, reliability, con- tion across the three trade corridors already detailed sistency, and capacity. Congo should install a well- above. This database compiles information by type functioning IT-based freight tracking system in the of goods, vehicles, origin, destination, capacity, etc. country. The current convoying system requires the It is suggested that it should be expanded into a more physical presence of customs staff at the corridors. complex, yet usable, trade database. The authorities In addition, the amount of informal payment that is need to maintain and expand this to establish a more asked of the truckers is quite large and constitutes a comprehensive transport database. This report recom- disincentive to those who want to do business accord- mends that the Government should follow the guide- ing to the rules. The introduction of GPS to locate all lines developed by the Sub-Sahara African Transport trucks travelling along corridors would contribute to Policy (SSATP). better management of truck transports in a sustainable way. GPS should be installed on trucks to track their movements and make sure that they do their job in Third message: Congo needs to improve due course. However, the adoption and implementa- the operational efficiency of freight tion of such tracking systems should not constitute movement to meet the growing demand a new burden that could reduce the performance of for freight transportation, and to enhance trade facilitation. Given that the CEMAC has already its economic vitality and regional decided to introduce this GPS tracking within the connectivity. region, this is clearly the way to go for Congo. This report recommends that the Government should establish a freight management bureau Fourth message: The Port of Brazzaville to facilitate the secure and efficient movement of needs to address a number of interrelated freight between Congo and its neighbors. The pro- challenges to improve its performance. posed freight management bureau would be the lead- Therefore, the Government should consider ing agency in implementing and enforcing standards adopting and implementing the Brazzaville and orientations stated under bilateral conventions, Port Master Plan, which has been prepared and would play an active role in ensuring a sustainable during this intervention. trucking industry. This freight management bureau would also serve as an observatory center for all In recognition of the poor state of the Brazzaville trucking activities across all of the country’s corridors. port and its inefficient operation, a coherent and Finally, to achieve meaningful success in improving feasible Port Master Plan has been prepared as freight security and efficiency, this bureau should be part of this intervention. The Master Plan examines established and run by the private sector involved in the port perspective and identifies the key issues that freight transportation, with active regional collabora- need to be addressed to improve port services. The tion, especially concerning standards. Master Plan is intended to serve as a long-term plan to establish policies and guidelines for future devel- The country should develop IT-based information opment within the coastal zone boundary of the port. infrastructure to facilitate optimal freight move- The Plan would guide the port’s future investment and ments and enhance the efficiency of the system. activities. It is, thus, highly recommended to adopt this Besides upgrading road infrastructure and enforcing Master plan and implement it accordingly. The Master the proper use of rules and regulations, enhancing Plan presents operational reforms and infrastructure freight transportation requires the use of technology investment strategy designed to create economic xxvi Republic of Congo – Trade Facilitation Intervention benefits and unconstrained trade growth opportuni- and congestions in both the delivery and removal of ties to Brazzaville through maritime commerce. Key cargo to and from the port. The lack of integration components of the plan include: prevents the effective operation of trade, as containers are loaded and unloaded in port areas, exacerbating Enhancing port infrastructure and logistics: to func- congestion. The poor state of Congo’s transport net- tion efficiently and to maximize its potential, the port work prevents the country from competing effectively of Brazzaville needs to expand its infrastructural assets. on the regional market. Effective transport networks To optimize the efficiency of the port, Congo needs to would enhance overall investment, providing people invest in both hard and soft infrastructure. The hard and goods with access to markets and reducing the cost physical infrastructure includes river port infrastruc- of doing business. It is, therefore, recommended that ture and equipment for loading and unloading, as well the Government invest in infrastructural development as logistics services, warehouses, parking areas, etc.; that links the port with other means of transportation. and the soft infrastructure includes improving the administrative and customs services, which are nec- Strengthening the institutional and regulatory frame- essary to facilitate the transit of goods and supportive work: this report recommends that the Government information and communications technology (ICT). undertake institutional and regulatory reform to make the port function efficiently and competitively. Poor Expanding terminal capacity: The Brazzaville port management currently contributes to delays at the port has limited capacity, both in terms of the length of the level, as it slows the loading and unloading of cargo. quay and the total physical size of the port. The port Slow and cumbersome clearance procedures also affect appears to be engineered to handle a very limited size the free movement of goods and people. In addition, of goods. Expanding the capacity of the port is impor- border agencies, including custom officials, use paper- tant for the long-term development of the country. based documentation. No agency at the port uses com- puterized systems to record trade data. It is therefore Introducing functional information system: A lack suggested that agencies adopt a paperless agenda across of and/or inefficient use of IT can hinder organizational all port agencies. Indeed, this will be a daunting chal- and operational efficiency and effectiveness. Using lenge due to the lack of formal procedures and lack of computer-based customs clearance processes would harmonization and coordination. eliminate administrative delays. Government authori- ties at the Brazzaville port have limited or no use of IT for their operations. The lack of IT-based data not Fifth message: Developing strong links only creates delays in the clearance process, but also to markets and establishing rural based affects the accuracy of the information entered into the storage and processing industries for customs books. Introducing computerized systems in cassava product are essential activities in the customs and other border agencies would allow enhancing development in the sector, in these agencies to significantly improve their perfor- terms of productivity and a higher share of mance in facilitating trade across the region. regional trade. Aligning terminal access improvements with state The price differential of cassava in Kinshasa and transportation and economic development plans: the still-low productivity of cassava in Congo show the Brazzaville port has very limited land access, for that the sector has an important trade potential in both road and rail, as it is surrounded by developed cassava. The price of cassava products is twice as high areas. Consequently, there are considerable delays in Kinshasa (DRC) than in Brazzaville (Congo). The Executive Summary xxvii price differential for both cities may be explained by These efficiency gains could lead to increased par- trade barriers, mainly administrative fees and taxes on ticipation in the cassava (as well as other agricul- international trade at Brazzaville and Kinshasa ports tural products) value chains and greater stability and the cost of shipping, which together account for of prices and supply/demand; two-thirds of this price differential. Therefore, if Congo 2. Establishment of starch based industries in the is able to reduce these costs, it could export cassava rural areas for cassava storage and processing to its neighboring countries, especially DRC—which to encourage both producers and processors. has the highest consumption rate of cassava in the There is a lack of storage and processing facilities world. This, in turn, could enhance productivity and and mechanics, which if available would ensure help the transformation of the sector into commercial- that farmers could benefit from sales of their final based activities. products, and could use mechanized technology. There are a number of factors that contribute to The Government should act to improve farm pro- market access, including storage facilities and ductivity, improve food processing, and improve affordable transportation. Rural incomes will not transport for agricultural goods to help the coun- be substantially increased by exclusive emphasis try gain more from regional trade. Specifically on subsistence food crop production; rather, more the intervention recommends that the Government market-oriented production systems are needed. facilitate the: These require the intensification of agricultural production systems, increased commercializa- 1. Creation of a cassava farmers’ cooperative to tion and specialization in higher-value crops. facilitate access to production resources and Therefore, the major strategy for improving cas- market information. Currently, cassava farmers sava production and processing should be to in Congo are unorganized and don’t have access to establish storage and processing industries closer credit for production and processing equipment. to the production areas; Establishing such a cooperative would enable 3. Investment in physical infrastructure in rural farmers to access inputs for production, includ- areas is needed to link farmers to markets. It is ing fertilizer, pesticides, machinery, etc. It could important to enhance all-season road connectivity also serve as a means to undertake transporta- to agricultural market centers in the key cassava tion, packaging, distribution, and marketing of producing districts. Improving market links cre- cassava products. Furthermore, the cooperative ates a virtuous circle by boosting productivity, could facilitate a source of financing for working increasing incomes and strengthening food secu- capital and investments. The cooperative can also rity. Better access to domestic and international be a means for reliable market information, help- markets means that small producers can reliably ing farmers to become better managers by assist- sell more produce at higher prices. This in turn ing them in planning production to meet market encourages farmers to invest in their own busi- demand, and helping them negotiate prices on a nesses and increase the quantity, quality, and more ‘even footing’ with wholesalers and retailers. diversity of the goods they produce. xxviii Republic of Congo – Trade Facilitation Intervention Matrix of Key Policy Recommendations Operational Objectives Action Expected result Performance indicators Trade and Transport Facilitation in Congo Reduce waiting time at the Put the necessary personnel at border posts to allow *UHDWHUŴRZRIWUDGH 7KHQXPEHURIKRXUVDQGGD\V borders them to be open 24 hours daily that the border remains open 5HGXFHWKHQXPEHURIFKHFN- (YDOXDWHWKHLPSRUWDQFHRIHDFKFKHFNSRLQWDQG /HVVFKHFNSRLQWV 7KHQXPEHURIFKHFNSRLQWV point on corridors reduce their number 0DNHFXVWRPVVHUYLFHVPRUH 'HVLJQFOHDUO\GHƓQHGJXLGHOLQHVIRUFXVWRPVFOHDU- Customs clearance guidelines develop, Time and cost at customs HIIHFWLYHDQGHIƓFLHQW ance procedures, and introduce an IT-based data entry and the data entry system established system. UHGXFHVWLPHDQGFRVWRIFXVWRPV Establish regional economic Initiate dialogue to establish economic corridors that $JUHHPHQWWREXLOGVXUIDFHWUDQVSRUW 6LJQHGDJUHHPHQWIROORZHGE\ corridors SULPDULO\IRFXVRQEXLOGLQJWKHWUDQVSRUWQHWZRUN QHWZRUNDFURVVWKH&(0$&(&&$6 construction projects Harmonize customs proce- Initiate dialogue to establish one-stop border customs One stop border posts One stop border posts estab- dures with neighbors clearance process. lished Strengthening the Transport Sector in Congo: &UHDWHDQDWLRQDOIDFLOLWDWLRQ )RUPXODWHDGHFUHHWRUHHVWDEOLVKDQDWLRQDOIDFLOLWD- 7KHWDVNIRUFHRQWUDGHIDFLOLWDWLRQLV A reestablished National Facilita- committee WLRQFRPPLWWHHLQFOXGLQJUHSUHVHQWDWLYHVRIWKH reactivated WLRQ&RPPLWWHHLVIXQFWLRQLQJ public and private sectors, with trade and transporta- tion liability Evaluate international trade &RQGXFWDGHWDLOHGHYDOXDWLRQRIWKH9LHQQD$FWLRQ %HWWHUTXDOLW\RIWKHVHFWRULQSROLF\ Evaluation report is available agreements SURJUDPIRUQRQFRDVWDOGHYHORSLQJFRXQWULHVDQG and practice the resolution adopting the post-2015 development DJHQGDWRLGHQWLI\QHHGV 'HYHORSDVDIHW\UHJXODWLRQ Develop and implement legislation, institutions, and ,PSURYHURDGVDIHW\ /HJLVODWLRQDGRSWHG$UHDVIRUUHVW VDIHSUDFWLFHV and controls are built Improve vehicle inspection Develop a modern nationwide vehicle inspection 9HKLFOHLQVSHFWLRQOHJLVODWLYHDQG New vehicle inspection mecha- method mechanism technology system LQVWLWXWLRQDOIUDPHZRUNGHƓQHGZLWK nism implemented better vehicle tools 6WUHQJWKHQFDSDFLW\RIVWDIIDV- +DUPRQL]HDQGGHYHORSWUDLQLQJVIRUVWDIIZRUNLQJDW 7UDLQHGVWDIIDQGUDSLGFOHDUDQFHVDW 5HGXFWLRQRIZDLWLQJWLPHDW VLJQHGWRERUGHUFKHFNSRLQWV FKHFNSRLQWV FKHFNSRLQWV borders Improve Port Systems and Operations Organize and regulate the cre- Develop logistic stores and warehouses %HWWHURUJDQL]HGORJLVWLFVIDFLOLWLHV Logistics warehouses and stores DWLRQRIORJLVWLFVZDUHKRXVHV built and stores inside and outside GU\SRUW RIWKHSRUWDUHD 6WUHDPOLQHFDUJRFOHDUDQFH 7DNHWKHQHFHVVDU\PHDVXUHVDQGUHIRUPVWRUHWDLQ $VKRUWFOHDUDQFHWLPH3$%36 $UHIRUP only the necessary administration and services ,PSURYHWKHLQIRUPDWLRQ &RQGXFWDVWXG\WRGHYHORSWKH*RYHUQPHQWLQIRUPD- A total paperless process through a 5HSRUWRIWKHVWXG\ V\VWHPVRIWKH*RYHUQPHQW tion system single aperture system. Upgrade administrative 'HYHORSDQGGHSOR\DQDWLRQDOSRUWDORIWUDGHRQ Operational portal, accessible, updated Trade portal operations WKHSURJUHVVRISURFHGXUHV SURJUHVVUHVSRQVLELOL- regularly WLHVIRUPVGRFXPHQWVIHHVHWF WUDGHIDFLOLWDWLRQ measures, and regulations. (continued on next page) Executive Summary xxix Matrix of Key Policy Recommendations (continued) Operational Objectives Action Expected result Performance indicators Technical assistance to opera- 2SHUDWLRQDOL]DWLRQRIWKHSODWIRUP*827LQ3$%36 3$%36LQWHJUDWHGLQWRWKHVLQJOH 2SHUDWLRQDO*827SODWIRUP WLRQDOL]HWKHSODWIRUP*827 ZLQGRZRI7UDQVERXQGDU\2SHUDWLRQV LQ3$%36 (GUOT) Establish a harmonized (VWDEOLVKZLWKDOOWKHVWDNHKROGHUVRIWKHSRUWD A better relationship between the port &RQVXOWDWLRQ)UDPHZRUN ZRUNLQJHQYLURQPHQWDPRQJ FRQVXOWDWLYHIUDPHZRUNWUHDWLQJWKHLVVXHVRIWUDGH and its partners and customers VWDNHKROGHUVRIWKHSRUW IDFLOLWDWLRQ Strengthening a Foundational Value Chain – Cassava 6WUHQJWKHQHQWUHSUHQHXU- &RQGXFWDQDO\VLVWRLGHQWLI\EDUULHUVWRHQWUHSUHQHXU- Greater productivity and competitive- A policy adopted VKLSLQDJULFXOWXUHDQGIRRG VKLSLQDJULFXOWXUHDQGDJULIRRG ness products. $GRSWDQGLPSOHPHQWSROLFLHVIURPDVWXG\RQUXUDO 3ROLF\UHIRUPDQGVWXG\UHSRUW ƓQDQFHV\VWHP 7DNHPHDVXUHVWRGHYHORSWKHGRPHVWLFPDUNHWDQG Policy measure H[SRUWIDFLOLWDWLRQIRUDJULFXOWXUDOSURGXFWV ,PSURYHVWRUDJHRIFDVVDYD Conduct a study on the storage means and their /RZORVVUDWHRIFDVVDYDSURGXFWLRQ 6WXG\UHSRUW locations $SSO\WKHUHVXOWVRIWKHVWXG\ 1XPEHURIVWRUDJHIDFLOLWLHV Facilitate interregional trade 5HGXFHIHHVDQGWD[HVRQLQWHUUHJLRQDOWUDGH /DUJHU&RQJROHVHFDVVDYDPDUNHW 0HDVXUHVWRUHGXFHIHHVDQG IRUFDVVDYD taxes are adopted Introduction T he Republic of Congo (Congo) Government has embarked on a significant investment program to improve the country’s con- nectivity and boost trade. Since 2007, a number Congo’s weak legal and regulatory system under- mines the trade-friendly business environment. Historically, doing business in Congo has been chal- lenging, and things have not significantly changed. of road projects have been launched, including the Across all areas measured by Doing Business, Congo is construction of NR1 (that connects Brazzaville and close to the bottom of the countries ranked. According Pointe-Noire), the Obouya-Okoyo road, and the reha- to Doing Business 2014, Congo’s regulatory environ- bilitation of 260 kilometer of rural roads. In addition, ment is the second worst in the world, ranked 188th the Government, with assistance from the European out of 189 countries. The process of customs clearance Union, has allocated massive investment to the coun- is also cumbersome, and is characterized by irregulari- try’s two key ports—Brazzaville and Pointe Noire. The ties as illustrated by the country’s position of 180th out work on the Brazzaville port focuses on rehabilitat- of 189 countries in a report on the category of ‘trading ing the port’s infrastructure. The investment in the Pointe-Noire port, on the other hand, focuses on the modernization of the port. FIGURE 0.1: Cost of Export from CEMAC Countries by Cost Component, New roads, railways, and airports will help reduce 2015, (in US$) transportation costs while also enhancing the 7000 sector. According to Briceño-Garmendia and Foster (2009), the ongoing or planned infrastructure inter- 6000 ventions on roads, railways, and ports are expected 5000 to reduce the cost of infrastructure services, which 4000 US$ are key inputs to the production process. In the case 3000 of ports, investments and institutional reforms can 2000 substantially reduce handling and administration 1000 costs associated with imports and exports. Improving 0 the quality of the transportation infrastructure would Cameroon Central African Republic Chad DRC Congo, Rep. Equatorial Guinea Gabon SSA Average World Average increase the size of transportation services. However, while it is important to upgrade the country’s road infrastructure, it is also critical to improve the regu- Document Preparation Inland Transportation latory framework to achieve the full impact of these Customs Ports and Terminal Handling infrastructures. Source: Doing Business database, 2015. 1 2 Republic of Congo – Trade Facilitation Intervention across borders’. Congo’s performance, in terms of the the best of the knowledge of this report, there has number of documents required and the time required not yet been a document produced that assesses to import and export, is higher than the sub-Saharan Congo’s trade facilitation with regard to its soft and Africa (SSA) average, while the cost to import and hard infrastructure. This intervention was initiated at export is more than 55 percent higher than for its the request of the Government to fill this gap and assess peers in SSA. For instance, exporting a standard con- the trade facilitation factors constraining trade develop- tainer of goods requires 11 documents, takes 50 days ment in Congo. Assessing Congo’s trade facilitation, and costs US$3,795. Importing the same container of along with the creation of a concrete action plan, would goods requires ten documents, takes 54 days and costs provide further motivation to reform trade facilitation US$7,590. In Rwanda, the top SSA performer in Doing and encourage development partners to prioritize areas Business, exporting a standard container requires only for technical assistance and capacity building. seven documents, takes 26 days and costs US$3,245. Importing, on the other hand, requires nine documents, Moreover, trade facilitation, encompassing both takes 30 days and costs US$4,990.2 Among the four simplified customs procedures and upgrades to cost components of trade, inland transportation costs transportation infrastructures, enhances a country’s is at a highly exorbitant level, accounting for about ability to compete in international markets by reduc- 74 percent of import costs and 60 percent of export ing delivery time and lowering transaction costs. costs. Furthermore, the total cost for import is the sec- Studies have shown that trade facilitation can bring ond highest in the SSA, while the cost for exports is the about economy-wide benefits. For instance, Minor sixth highest in the region (see Figures 0.1 and 0.2). and Tsigas (2008) have estimated that reducing time to export by 50 percent would result in a growth of GDP Despite the significant role of trade facilitation of 1.1 percent. Similarly, reducing the time required in the country’s sustainable economic growth, to to import by 50 percent would lead to GDP growth of 2.9 percent. Clark et al (2004), on the other hand, have shown that a poor level of port efficiency, such as a lack of transparent procedures and cumbersome FIGURE 0.2: Cost of Import from CEMAC port procedures, may substantially raise port costs and Countries by Cost Component, 2015 (in US$) hamper export competitiveness. Besides transportation infrastructure, transportation regulations also play a 10000 key role in determining the efficiency of the sector 9000 8000 (Arvis et al, 2007). The study found that roadblocks 7000 in West Africa, which can occur every 30 kilometers, 6000 increase costs by ten percent. It is important to note 5000 US$ 4000 that lowering trade transaction time and costs requires 3000 the improvement of both soft and hard aspects of trade 2000 facilitation. Studies have shown that trade facilitation 1000 0 reforms improve trade performance when the reform incorporates both soft and hard infrastructure, physical Cameroon Central African Republic Chad DRC Congo, Rep. Equatorial Guinea Gabon SSA Average World Average Document Preparation Inland Transportation 2 In Singapore, the top performer in Doing Business, exporting a stan- Customs Ports and Terminal Handling dard container requires only three documents, takes six days and costs US$460. Importing, on the other hand, requires three documents, Source: Doing Business database, 2015. takes four days and costs US$440. Introduction 3 infrastructure (such as roads and ICT), and regulatory of any legal and regulatory framework that needs to reforms (Portugal-Perez and Wilson, 2012). be reviewed or changed; ii) to assess Congo’s main trade corridors, specifically Brazzaville-Kinshasa, In addition, poor trade facilitation affects the Brazzaville-Douala, and Pointe Noire-Cabinda, and volume and range of a country’s international identify the specific causes for delays and the costs trade by reducing the transaction costs of trade, associated with these corridors; iii) to review the making exports less competitive and leading to a existing legal and regulatory framework of the road less-diversified economy. Studies have shown that transportation sector and identify niche interventions non-tariff barriers including cumbersome clearance relevant to improving the performance of the sector procedures, delays along trade corridors and border and the high costs associated with it; and iv) to explore posts, inefficient port services, and corruption increase the role of trade facilitation in improving the country’s transaction costs by up to 37 percent (Brenton and export diversification. Isik, 2012; Gillson, 2010). Furthermore, more than 75 percent of delays are caused by the lack of coordi- The methodology used by the team in this report nation between border agencies (USAID, 2009). Other is component-variant. In fact, the World Bank, FAO, studies (e.g., Hufbauer et al., 2012) have shown that and USAID undertook a review of relevant reports the potential gains from trade facilitation (measures and official documents, which included reports. In that reduce transaction costs and time) are very large. addition to this, the report featured consultations with Using a computable general equilibrium model, the authorities and technical staff from various ministries. World Economic Forum (2013) has shown that the Thorough consultation was also conducted with the global income gains from raising average trade facili- private sector. In light of its importance, first-hand tation performance half way to the level of Singapore information was obtained along the three trade cor- (which is the top performer in terms of trade facilita- ridors considered in this intervention. A survey tool tion) could be six times larger than those resulting was developed and data was collected. In addition from the removal of all import tariffs. Similarly, econo- to the survey, officially available data were also used metric studies, such as Djankov, Pham, and Freund where necessary. The methodological approach varied (2010), find that reducing the time required for trade depending on the components of the intervention. transactions can significantly boost exports. Saslavsky and Shepherd (2012) show that trade facilitation and On assessing the logistics and transportation industry logistics performance matter significantly more for in Congo’s key trade corridors, the report conducted trade in parts and components—which typically cir- extensive consultation with Government authorities, culate within global value chains—than for trade in port officials, and the private sector involved in the final goods. It is, therefore, very important to assess transportation business. In addition, two sets of sur- Congo’s trade facilitation and develop a strategic action vey tools were developed to collect data on traffic flow plan to enhance the country’s competitiveness and between Brazzaville and Douala, and between Pointe boost trade and economic growth. Noire and Cabinda. A comprehensive survey was also conducted at Brazzaville port. The quantitative data The main objectives of this trade facilitation inter- includes actual transit time, waiting time, time and vention are: i) to investigate the operating environ- cost (formal and informal) to clear cargo, and other ment experienced by the private sector, in relation to relevant data points. The qualitative data includes all the timely movements of goods through the Brazzaville non-numeric observations pertaining to perceived port facilities, and identify the steps required to corruption, and any informal barriers to truck move- improve the environment, including the identification ment not listed but deemed important. In addition, 4 Republic of Congo – Trade Facilitation Intervention the qualitative data includes interviews with truck with the authorities. The report also reviewed earlier drivers, customs officials, regulatory authorities, and studies and used the FAO database for the analysis. security personal. Drawing on the overall assessment of Congo’s trade About the strengthening of the transport sector, exten- facilitation, this report presents the key findings sive consultations on strengthening the transport sec- of the four components of the intervention, and tor were conducted with the Ministry of Transport and provides a matrix of the proposed action plan. In other relevant ministries, as well as with the private a decade, Congo has scaled up its financial efforts in sector. Reviews were taken of the legal, regulatory and infrastructure investment, mainly in roads and ports. institutional framework of the road transportation and It has also taken important measures to remove some its enforceability. In addition, the institutional struc- trade restriction (including adopting a framework of ture of the regulatory body of the transport sector was regional agreements). However, it has been revealed also reviewed. that there are still numerous trade barriers that affect transaction time and costs. For instance, all trade corri- On restructuring the Brazzaville port gateway, dors assessed in this report suffer from uncoordinated thorough consultations were conducted with the and complicated customs procedures, which increase Brazzaville Port Authority, and the port was also visited transaction costs and exasperate informal trade flows. to observe the movements of passengers and goods, The road transport sector is generally affected by a lack and the operational mechanism of the port in general. of functional institutional and regulatory framework. The report also reviewed the operational and manage- The results of this report also reveal that while it is ment structures of the port, as well as the existing legal, important to maintain the ongoing rehabilitation of the institutional, and regulatory framework, and evaluated Brazzaville port, its efficiency can only be enhanced consistency with other domestic policies.3 significantly if this rehabilitation is coupled with the upgrading of the soft infrastructure, which would On assessing Congo’s export diversification potential include improving customs procedures and stream- in non-oil products, the report uses the supply chain lining clearance procedures with other agencies, etc. notion as an analytical framework, and therefore the With regards to improving trade in agriculture prod- focus is not merely export specific but also production ucts, it appears that transportation infrastructure and and marketing specific. Much attention is placed on poor storage facilities are two of the main factors that strengthening the competitiveness of production itself, affect the sector. as well as the role of trade facilitation for the exported non-oil commodity. Cassava has been selected for this The remainder of this report contains four chapters: analysis for various reasons. Cassava is the fourth most The first chapter assesses trade facilitation intervention consumed staple food in the world, after rice, maize on three main corridors of trade between Congo and and wheat. According to FAO (2012), it is the staple its key neighbors, DRC, Angola, and Cameroon. For food of nearly 90 percent of the Congolese population, each of these corridors, an analysis of strengths and with per person consumption of 425 kg per year in weaknesses is undertaken, and recommendations to rural areas and 175 kg per year in urban areas.4 The cassava sector is also considered by the Government 3 Being the only deep-water port in the region, port of Pointe Noire as one of the priority sectors for development as a is an important economic hub for Congo. However, following the consultation with the Government and local authorities, it has been strategy for economic diversification and food security. decided to carry out an in-depth assessment in the future and couldn’t Consultations and interviews with key actors of the be included in this report. 4 These figures are for 2009; the average figure for 2011 is 246 kg cassava value chain were also carried out, as well as per person. Introduction 5 facilitate trade are proposed. The second and third provides an example on how the trade facilitation chapters focus in a greater depth on key issues facing measures proposed can be beneficial for economic specific corridors: transport regulation for Angola and diversification in particular, and for the Congolese Cameroon, and river transport for the DRC corridor. population in general. More precisely, chapter two covers interventions in the transport sector that could improve trade facilitation in In addition to this comprehensive report, four Congo; it assesses the state of transport regulation and stand-alone documents have been prepared in proposes a new set of measures to regulate this sector. French and shared with the Congolese authori- The third chapter presents an assessment of freight ties: i) The Trucking Industry on Brazzaville-Douala transportation at the Brazzaville port and proposes a and Pointe Noire–Cabinda Corridors; ii) A survey- master plan to update infrastructure and procedure based study on cross-border trade between Congo at this important gateway. The fourth chapter assesses Rep. and DRC; iii) Rehabilitating and modernizing trade facilitation intervention in the context of a value the Brazzaville port—analysis and master plan; and chain analysis in the agricultural sector, taking the iv) Regulation and capacity building strategy in the example of the cassava product. In fact, this chapter transport sector. Assessment of the Logistics and Transportation Industry of Congo’s Key Trade Corridors Kinshasa-Brazzaville, Douala-Brazzaville; and Pointe Noire-Cabinda Trade corridors 1 1.1. Background and Objectives DRC are barely over 1 percent of total imports in value terms, and there is a lack of detailed trade data between Cross-border trade in Congo essentially takes place the two countries. Secondly, based on the informa- in and around its four major trade corridors. The tion from customs services and various stakeholders, four major trade corridors are: (i) along the northern trade exchanges between Pointe-Noire and Cabinda border with Cameroon (Brazzaville-Douala, especially take place through roads and waterways. The overall at Ouesso and Souanké), (ii) along the eastern border trade between the countries appears to be dominated with DRC (Brazzaville-Kinshasa, along the Congo river by goods travelling through the port of Pointe-Noire to between Mindouli and Ngabé); (iii) along the south- Cabinda. According to available data, very few prod- ern border with Angola: on two borders, one with ucts are exported by Congo to Cabinda, apart from Cabinda (at Nzassi) and one with Gabon (Ngongo); some agricultural products, for which accurate data is and (iv) along the western border with Gabon almost non-existent. Thirdly, there is almost no data (between Lékéti-Boundji and Ewo). While all of the on trade (trucks) along the Brazzaville-Douala corridor. aforementioned four corridors are important conduits of Congo’s trade, due to resource and time constraints, This chapter assesses the current situation of the Western corridor will not be covered in this report. Congo’s three main trade corridors regarding trade In addition, the port of Pointe Noire is Congo’s most facilitation. The overall objective of this chapter is to important gateway to international markets. Given assess the Brazzaville-Douala, Pointe Noire-Cabinda, its strategic location between the Atlantic Ocean and and Kinshasa-Brazzaville corridors’ performance in the sub-region, and the fact that it is the only deep facilitating cross-border trade between Congo and its water in the region, the port has great potential to neighboring countries. It examines the institutional become a logistics hub in the region.5 Furthermore, and regulatory framework that governs trade activi- the Brazzaville-Pointe Noire route is also another key ties along these corridors. It identifies the main con- trade corridor for Congo, and deserves assessment.6 straining factors for free movements of people and goods, and provides recommendations and action While the three neighboring countries—DRC, plans to alleviate them. In addition to this chapter, a Cameroon, and Angola—are important trading part- ners of Congo, adequate information regarding the existing trade flows is not available. Firstly, official 5 The intervention does not cover the port of Pointe-Noire because aggregate data represents only a small fraction of what in the Doing Business reform agenda framework, the Bank is already working on this port. is actually traded between Congo and DRC along the 6 Since the road is currently under rehabilitation any assessment would Brazzaville corridor. In fact, recorded imports from the be meaningful after the completion of the construction. 7 8 Republic of Congo – Trade Facilitation Intervention FIGURE 1.1: Map of the Republic of Congo Transport infrastructure 14°E 16°E 18°E There are three entry points in the Republic of CENTRAL AFRICAN Congo along the Brazzaville Douala corridor: 4°N REPUBLIC 4°N REP. OF CONGO CAMEROON Maboko, Cabosse (Ntam), and Ngatongo. All of these points are used by truckers carrying wood To Ib Batouri en ga Bétou To Ebolowa Mo tab a for timber companies (to export to other countries 2°N Souanké Ngoko L I KOUAL A 2°N through the Port of Douala), but Maboko is by far the most used entry point, with more than 90 per- Sembé Ouésso Impfondo Epéna o ng SAN GH A Sangh Co cent of truckers passing through it. While the cross- a To C o n g o L ik ing through Cabosse is on dry land, trucks need to Lambaréné ou ala M a m bi l i ngi Ouba Etoumbi 0° 0° C U VE T TE - use ferries to cross the river when travelling through Le To ng Booué  OU E ST oué Owando Kouyou Liranga G A B O N Ewo B a s i n a CUVETTE Cabosse and Ngatongo. Border agencies are located To Mossaka m on both sides: i) for the entry through Cabosse—they Ali Lambaréné Okoyo PL ATE AU X o ng are located in Ntam (on the Cameroonian side) and Gamboma Co 2°S 2°S D E M O C R AT I C i én Mbinda Nk REPUBLIC L Djambala Ngo OF CONGO Cabosse on the Congolese side; and ii) the other entries ou Batéké ess é Zanaga Mossendjo Plateau NIARI LÉKOU M OU POOL Ngabé are found in Socambo (for Cameroon) and Nagatongo ué 0 50 100 Miles Djo Makabana and Maboko (for the Congolese side). Ni Sibiti ari 0 50 100 Kilometers lou KO UI LO U BRAZZAVILLE Ko ui 4°S 4°S Kakamoéka Dolisie Madingou BRAZZAVILLE BOUENZA 18°E Madingo-Kayes Loango Kinkala To Hinda Hinda Kikwit POINTE-NOIRE Pointe-Noire REPUBLIC OF CONGO Of the two main roads linking Douala to Brazzaville, ATLANTI C CABINDA the road passing through Maboko, is the most pop- SELECTED CITIES AND TOWNS OCEAN (ANGOLA) To DEPARTEMENT CAPITALS Matadi To Lusanga NATIONAL CAPITAL GSDPM Map Design Unit IBRD 42187 | FEBRUARY 2016 To M'banza Congo 6°S MAIN ROADS RAILWAYS ular, as the condition of the road along this route This map was produced by the Map Design Unit of The World Bank. A N G O L A is generally in a better condition. The Brazzaville- The boundaries, colors, denominations and any other information DEPARTEMENT BOUNDARIES shown on this map do not imply, on the part of The World Bank Group, any judgment on the legal status of any territory, or any INTERNATIONAL BOUNDARIES endorsement or acceptance of such boundaries. 14°E 16°E Douala corridor is typically used by logging compa- nies to export timber through the Port of Douala (a Chinese company SEFYD in Cabosse, CIB in Ngatongo more comprehensive and detailed stand-alone report and IFO in Maboko). However, according to truck- (World Bank, 2015a) has been prepared and presented ers and importers, the most preferred route is the one to the Government. passing through Maboko, which is also the focus of this report’s analysis. The number of vehicles pass- ing through Cabosse and Ngatongo is very low in 1.2. Transport Infrastructure and Trade comparison. Compared to other routes, the road that goes through Maboko is in better physical condition. 1.2.1. The Brazzaville – Douala Corridor Particularly, parts of the road on the Cameroonian side are in bad physical state. In addition to the relatively Traffic on the Brazzaville – Douala corridor is operated better road condition, there is only one place where it through two main roads/corridors, but there are three is necessary to use a ferry to cross the river (reducing different options of entrance/exit points, including the cost of crossing the river). Cabosse (road passing through the Southern Region of Cameroon), Ngatongo, and Maboko (road pass- The Mambili bridge is an important segment of the cor- ing through the Eastern Region of Cameroon). The ridor that links the two countries. Construction of this Brazzaville – Douala corridor (through Ouesso) is a road started in 2012 and have been finalized in 2015. 2,038 kilometer long road, and is in various physical The Mambili bridge is currently playing an important conditions from one end to another (see map for details). role in the socio economic and political development Assessment of the Logistics and Transportation Industry of Congo’s Key Trade Corridors 9 TABLE 1.1: Length and Condition of the Roads Sections along the Brazzaville-Douala corridor Departures Destinations Distances (km) Condition Douala Yaoundé 254 Tarred road Yaoundé Bertoua 322 Tarred road Bertoua