ETHIOPIAN HERALD SATURDAY

Electronic single window to ease doing business in Ethiopia

— July 18, 2020 458 comments

A number of countries are considering establishing a “Single Window” for the exchange of information between trade and government. The purpose of this publication is to provide these countries with concrete examples of the operation, costs and benefits of such facilities in other countries.

A Single Window is a facility that allows parties involved in trade and transport to lodge standardized information and documents with a single entry point to fulfill all import, export, and transit-related regulatory requirements. If information is electronic, then individual data elements should only be submitted once.

The Government of Ethiopia has launched an electronic platform on last January to enhance efficiency in trade logistics landscape of the country by speeding the customs process for importers and exporters.

According to Robel Tesfaye, Program Director of Ethiopian Electronics Single Window Program Office, each private and public bank in Ethiopia and other offices have started offering eSW service from last January. Accordingly, it was able to save about Birr 18 million and 400 thousand working hours.

Early results are already being voiced by the private sector. “The new eSW system has eliminated the need to physically apply and get permits for each export shipment from the Ministry of Trade,” Robel added. “This not only has saved us time, but also reduced our transport costs to and from the Ministry Office.”

He further stated more than two thousand traders and five hundred regulatory institutions have started giving this e-service. He also added that the clients are forwarding positive feedback about the service.

“…we launched the Ethiopia Electronic Single Window Service – a key technology that will enhance cost effectiveness and efficiency in trade logistics landscape of Ethiopia,” Dr. Abiy Ahmed twitted, after attending the launching at the Office of the Prime Minister. “We can’t achieve prosperity if we are incapable to come up with new ideas and create favorable environment for the private sector,” the Prime Minister added at the launching event held at the Prime Minister’s office.

“In Ethiopia, Electronic Single Window Cuts Costs and Time to Trade,” documents from The World Bank Group revealed. The document further stated that; prior to the pandemic, Ethiopia had experienced steady economic growth over recent years. Foreign direct investment has increased from $278 million in 2012 to more than $3.3 billion in 2018. Despite this progress, the country’s competitiveness continues to be constrained by high trade costs that deter investment by both local and international businesses from operating in Ethiopia.

Burdensome documentary requirements, high levels of physical inspection of imports, lack of coordination among border agencies coupled with low levels of automation and an uncompetitive trade logistics sector raise the costs of doing business and limit opportunities to trade.

Ethiopia is among the highest logistics costs in the world, – which retard growth of export-driven light manufacturing and agriculture. High trade costs can be attributed to various constraints, including a state monopoly on key logistics services, regulatory restrictions and low levels of key logistics services, shortages of foreign currency which prolongs import times, and delays in obtaining and processing trade documents.

To address these challenges, the government, – through its Homegrown Economic Reform Agenda, is pursuing a multi-pronged approach that includes improving regulations, processes, and practices that were burdensome to private businesses and addressing investment climate issues that have been holding back investment and productivity growth.

As part of the government’s commitment to improve investment and trade, the Ethiopian Customs Commission developed an electronic single window (eSW) for trade with help from the World Bank Group. The new eSW system connects the 16 major cross-border regulatory agencies. It enables traders to submit documentation and receive electronic permits relating to import and export through a single window submission, significantly reducing the time and cost to trade.

At the onset of the project, the Bank Group assisted the government to build a blueprint for the eSW (business process reviews, functional and technical architecture, etc.), but also catalyzed stakeholder consensus for reform.

The eSW brings Ethiopia closer to international trade standards, such as the World Trade Organization Trade Facilitation Agreement (WTO TFA). While Ethiopia is not a member of the WTO, the government requested assistance from the Bank Group to support improvements in Ethiopia’s trade facilitation procedures, in line with the WTO TFA.

Improving trade with initiatives, like the eSW, can help Ethiopia integrate better into global value chains (GVCs) as a result of simplified exporting and importing. Participation in GVCs offers competitive firms new opportunities to enhance their growth potential through upgrading operations, accessing new markets, and adopting new technologies.

Trade facilitation can also enhance the competitiveness of Ethiopian products by streamlining customs clearance and logistics procedures for importers, exporters and manufacturers, which in turn reduces trading costs and time of inputs for producers and final products for consumers.

Support for the electronic single window in Ethiopia was provided by the World Bank Group with funding from the Trade Facilitation Support Program (TFSP). This initiative—implemented by IFC and the World Bank—provides assistance to countries seeking to align their trade practices with the World Trade Organization Trade Facilitation Agreement (WTO TFA), the document stated.

The Ethiopian herald July 18,2020

BY HIZKEL HAILU

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