1 / 18

Trading Across Borders In Mozambique

Trading Across Borders In Mozambique. Introduction. What were the results ? Why these results ? How to improve results ?. Ranking: Overall Ease of DB vs Ease of Trading. Total Import Time Break Down. Total Export Costs Break Down. Import Time – Mozambique. Pre-shipment Inspections.

kineks
Download Presentation

Trading Across Borders In Mozambique

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript


  1. Trading Across BordersIn Mozambique

  2. Introduction • What were the results ? • Why these results ? • How to improve results ?

  3. Ranking: Overall Ease of DB vs Ease of Trading

  4. Total Import Time Break Down

  5. Total Export Costs Break Down

  6. Import Time – Mozambique Pre-shipment Inspections Bank L/C Time • 15days • free • Clean report findings • Intertek • Burdensome • 2 weeks Costs • Min $350 Documents • L/C Institution • Bank Comments • High Risk environment

  7. Import Time – Mozambique Other documents Customs Time 2-3 days • 3 days • $55 for courier Costs $160 DU, manifest, cargo release, Packing list • Original B/L, COO, Com. Invoice, Packing list Documents Institution • Exporter, MCC Bureaucratic and manual processes Comments • Too much paper work

  8. Import Time - Mozambique Ports Transportation Scanner Time • 2 days. few hours 5-7 days $260 • $240 Costs $120 Stowage plan, THC, Cargo manifest • Delivery order Inspection report Documents Institution Shipping line, Freight forwarder MIPS, container terminal KUDUMBA Comments Poor roads going north or west hampers transit trade 80% scanning Low port productivity

  9. Export Time - Mozambique Customs Securing bank L/C Other documents Time • 2 weeks • Min. $350 • L/C • Banks • High risk environment • 3 days • 2-3 days Costs • $160 • $55 for courier Documents • B/L, Com. Invoice, packing list, CoO($20) • DU Institution • Importer, firm • Customs Comments • Too much paper work • Bureaucratic and manual processes

  10. Export Time - Mozambique Scanner Ports Transportation • 2 days. Time Few hours 4-5 days Costs $90 $260 • $240 Documents Inspection report Release order MIPS, Terminal, Shipping line Institution • Freight forwarder KUDUMBA • Includes, arranging, loading and unloading Comments Costly Low port productivity

  11. Core Issues Analysis Trading Across Borders - Mozambique Banks • High fees in L/C (1% to 2.5% of transaction value) • Perceived by banks as high risk lending • Lack of credit information on traders • High T-Bill interest rates (16%) • Lack of competition in banking sector • Hence low usage of L/C (10%), majority use advance payments, telegraphic transfers, with attendant risks and associated costs.

  12. Core Issues Analysis Trading Across Borders - Mozambique Customs • Duplicatory/repetitive procedures • Manual (face-to-face paper pushing) • No risk management system in place • Corruption • Unprofessionalism among customs services • Use reference prices, even when evidence for transactions value exists. • VAT re-imbursements are slow

  13. Clearance Process at Customs Customs broker fills the DU First screening at Customs for Complete DU (Aceitação) • Data registered • In computer and (Entrada) • Notice for payment • Provided (Aviso de pagamento) • Verification of DU • (prices, tariffs, • quantities etc). (Verificação) • Signed-off by • Management (Gestão) Separator gives You Copy of approved Document (Separação) • Pay duties • at Treasury. • (Tesouraria) • Revenue Dept • Also verifies. • (Receita)

  14. Core Issues Analysis Trading Across Borders - Mozambique PSI • Send pro-forma invoice to ITS (Intertek) for a MOZ reference = take 2 days to obtain this number. • After which the reference number is transmitted to the supplier. • Supplier arranges for the inspection to be carried out, = take some 5-6 days. • It could then take some 4 days to issue the inspection report and transmit to importer. • It is not uncommon for there to be some rejection in the inspection process thus requiring a recommencement of the process.

  15. Core Issues Analysis Trading Across Borders - Mozambique Cross-border trade • Delays at border crossings (Ressano Garcia/FRIGO) of 2-3 days. Due to inter alia: • Further border co-operation, harmonised procedures, forms, systems and interfaces. • Hours of customs operation at the border • Weak road/rail network to land-locked countries is a hindrance to the development of transit trade.

  16. Recommendations - Administrative • Scanning should be applied on a selective basis and not more than 20% of cargo. • Abolish pre-shipment inspection • Allow for complete pre-good arrival clearance • Allow clearance without showing originals for reliable and trust worthy traders. • Streamline VAT rebate system. • Increased transparency in Customs decisions • Involve private sector in decision making: national trade facilitation committee. • Abolish “Aviso 2”

  17. Recommendations – Short to Medium Term • Establish a properly functioning EDI system • Create a single window, linking, customs with banks and port authorities. • Apply computerized risk management procedures using existing database on customers • Implement an E-manifest system • Border posts to increase hours of operation • IFC’s Global Trade Finance Program • Lower T-bill rates

  18. Recommendations – Longer term • Roads and ports facilities need significant investment, if Mozambique is to become a regional hub. • Creation of a single cross-border posts requiring only one inspection. • Improve risk assessment of traders to banks by improving the functioning of public credit bureau. • Allow more entries into the banking sector to stimulate competition. • EXIM bank to provide trade finance

More Related