Work on improving the East African Community’s (EAC) single customs territory (SCT) has continued with the selection of a Singaporean technology provider to design a system for digital trade documentation flows.
The EAC, which comprises Burundi, Kenya, Rwanda, Tanzania and Uganda, launched the single customs territory in 2013. It is designed to ease trade between the five member states and trim costs by clearing shipments at their first port of arrival or departure, but inefficient flows of customs information have hindered its effectiveness.
Singapore’s GUUD, through its subsidiary vCargo Cloud Kenya, won a tender to create a centralised platform for the SCT which will allow customs documentation to be easily shared by member states’ authorities, .
“As the official technology partner for the project, GUUD will now embark on creating a centralised system that will facilitate trade document flows within the region for all intra-trade, transit, as well as import and export,” the company says.
GUUD, a group of companies launched last year by ICT provider vCargo Cloud, says the platform is expected to go live in early 2022.
The solution will integrate mechanisms such as cargo scanners and smart gates across the trading bloc, according to Gabriel Kinu, an EAC customs information systems expert.
Alban Odhiambo, senior director of trade development agency Trademark East Africa, says a central documentation platform will “not only enhance the efficiency and effectiveness of trade systems at national and regional level, but improve trust, transparency and accountability in trade and transport transactions”.
“With greater visibility and the capabilities to trace transactions across borders, this platform will be critical in the realisation of a digital corridor for trade and transport.”
General manager of vCargo Cloud Kenya and GUUD Africa, George Chan, tells GTR that inefficient information reconciliation between the EAC members “has traditionally contributed to high inefficiencies and high costs of doing business”.
“But with the new SCT solution, where a trader usually has to make multiple customs declarations, they now only need to submit one customs declaration at the destination country, with taxes paid at the point of destination when goods are still at the first point of entry,” says Chan.
“Upon completion, we’re hoping to see not only faster, smoother trade flows but greater trade volumes passing through the region in the near future via this secure, cost-effective gateway.”
High costs of compliance and lengthy border clearing times are still hampering the development of the customs territory, according to an October 2020 study by the United Nations University and Tanzania’s Uongozi Institute, which found Tanzania’s goods exports to its EAC counterparts actually fell since the customs territory was first created in 2014.
The paper recommended stronger connections between the region’s customs systems, which it said may “aid the flow of information between customs authorities for faster and reliable clearance may reduce the costs and time associated with customs inefficiencies”.