Trade Logistics in Cameroon

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Investment Climate Advisory Services

World Bank Group

December

2010

THE WORLD BANK World Bank Group

Multilateral Investment

Trade Logistics in Cameroon

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About the Investment Climate Advisory Services of the World Bank Group

The Investment Climate Advisory Services of the World Bank Group assists governments of developing

and transitional countries in enhancing the environment in which businesses operate. We provide

customized advice to improve and simplify regulations as well as to attract and retain investments,

helping clients create jobs, foster growth, and reduce poverty. We rely on close collaboration with

donors, in particular through the multi‐donor FIAS platform, and World Bank Group partners—the

International Finance Corporation (IFC), the Multilateral Investment Guarantee Agency (MIGA), and the

World Bank (IBRD)—to leverage value and deliver tangible results for client governments.

The Trade Logistics Scoping Memo is the result of a mission conducted in Cameroon in September 2010

by a team comprising of Ankur Huria from the Investment Climate Advisory Service and Moise Ekedi

Endene of the Investment Climate Africa team. Alice Ouedraogo (Task Team Leader Cameroon Doing

Business Reform project), William Gain (Senior Trade Logistics Specialist), and Gael Raballand (Senior

Economist, World Bank) provided additional comments. This report was prepared under the supervision

of Uma Subramanian (Global Product Leader Trade Logistics).

Disclaimer

The Organizations (i.e. IBRD, IFC, and MIGA), using their best efforts in the time available, to provide

high quality services hereunder and have relied on information provided to them by a wide range of

other sources. However, they do not make any representations or warranties regarding the

completeness or accuracy of the information included this report, or the results which would be

achieved by following its recommendations.

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Section I – Introduction

The Doing Business Reform Advisory (DBRA) team is a unit of the Investment Climate Department of the

World Bank Group that provides technical assistance to countries looking to improve their business

environment. The DBRA Unit is currently providing technical assistance to the Government of Cameroon

‐ this technical assistance covers different areas relevant to the investment climate, including trade

logistics.

In early 2010, as a result of Cameroon’s performance in the Doing Business Trading Across Borders

indicator (Rank 149) the Government of Cameroon through the Ministry of Economy, Planning and

Regional Development, requested assistance from the Doing Business Reform Advisory Unit in order to

identify key issues and constraints in the business environment for trade and to provide solutions to

improve its performance. This Memo identifies:

(i) Key issues and challenges in documentation and border clearance in Cameroon; (ii) Key processes in border clearance; and (iii) Quick win reforms for the short and medium term.

This Memo provides an analysis of key elements of Cameroon’s trade logistics supply chain as it was in

September 2010. The information was collected in a week long scoping mission carried out by the Trade

Logistics team from the Investment Climate Advisory Services, World Bank Group. The analysis and

recommendations are based on observations of the processes and procedures, and on interviews

conducted with multiple stakeholders. The focus of this memo is on both the trade logistics process as it

is in practice, as well as its perception by the business community. The memo is limited in scope1 and

does not provide a comprehensive overview of Cameroon’s border control clearance process; it rather

seeks to highlight key issues that need to be addressed across the trade logistics supply chain, focusing

in particular on identifying quick wins including simplifying documentation processes, clearance

procedures, and reducing clearance time.

Cameroon’s Growth and Employment Strategy paper issued in August 2009 aims to develop Cameroon

as a "net exporter" of services by developing the use of ICT and science and technology parks2.

Additionally, “for growth to be sustainable and create employment, Cameroon's development and trade

diversification policy will aim to enhance sub‐regional and regional integration, as well as find new

outlets in European, American or Asian markets. It will be based chiefly on crops while taking advantage

of the rather favorable environment and ecology, and especially by progressing from the primary to the

secondary sector”3 . Cameroon also aims to take the leadership role in the CEMAC sub‐region to

promote free movement of persons and goods. Cameroon grew at about 3.3 percent per annum

between 2003 and 2008 and fell to 0.9 percent in 2009 during the global recession. Cameroon’s growth

in the past five years has been strongly influenced by the activities of the oil and agricultural sectors

1 The memo does not seek to analyze laws and regulations that govern trade. 2 Growth and Employment Paper, Cameroon, august 2009 3 Growth and Employment Paper, Cameroon, august 2009

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(wood, banana, cocoa, coffee, cotton and rubber), whose revenue represents 50% and 25% of exports,

respectively4. Cameroon’s Exports are still not diversified and limited only to ten products for decades

without any increase in quantities exported reflecting supply constraints and emphasizing the lack of

contribution of the external sector5.

Cameroon’s geography means it plays a major transit role. It shares its borders with six countries and its

main trading partner is Nigeria. Cameroon is part of CEMAC. Other members are Central African

Republic, Chad, Equatorial Guinea, Sao Tome, Congo and Gabon. CEMAC’s purpose is to promote

economic integration among countries that share the CFA franc as a common currency. CEMAC

members have a common external tariff (CET). Almost 40 percent of the CEMAC’s GDP is accounted for

by Cameroon. Faster progress on regional integration is critical for Cameroon and the region for greater

prosperity. Regional integration provides better opportunities to confront development challenges and

more recently the impact of the crisis (decline in foreign investment and food crisis) as isolation in

economies with small markets prohibits growth, development and job creation.

Reducing non‐tariff barriers like document preparation and customs and technical control time will

directly impact Cameroon’s trade growth. As can be seen from the table below for countries in the

region including Cameroon, non‐tariff barriers present a considerable burden to trade. For example,

according to the Doing Business 2011 report, in Cameroon, 73 percent of the time to trade is consumed

by these two factors.

Ghana Gabon Cameroon Nigeria Eq. Guinea UAE

Days % Days %

Days %

Days %

Days %

Days %

Ranking 89 134 155 146 137 3

Number of Import Document 7 8 12 9 7 5

Document Preparation 17

59% 10

45% 13

50% 19

46% 24

50% 4

57%

Customs and Technical Controls 5

17% 6

27% 6

23% 12

29% 14

29% 1

14%

Port and Terminal Handling 4

14% 4

18% 5

19% 5

12% 8

17% 1

14%

Inland Transport and Handling 3

10% 2 9% 2 8% 5

12% 2 4% 1

14%

Total 29 22 26 41 48 7 Figure 1: Trading Across Borders indicator import data 20116 Source: Doing Business 2011

4 African Development Bank, 2010 5 Growth and Employment Paper, Cameroon, August 2009 6 The scope and time constraints for this mission have meant that other indicators like unofficial payments etc have not been analyzed for the purpose of this memo.

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Simplified, transparent trade procedures are a key component of good trade policy and vital for

economic growth. Outdated bureaucracies suppress trade and entrepreneurship, discourage investment

and encourage corruption. Small and medium‐sized enterprises are particularly vulnerable to these

difficulties, because these costs represent a larger proportion of turnover than for larger firms.

Therefore, a lack of transparency in rules and procedures is often enough to dissuade businesses from

exporting altogether. The bottom line is that inefficient trade procedures are clearly a barrier to trade.

Research shows that a 10 percent reduction in export time potentially increases export by 6.1 percent

for sub Saharan Africa7. This is often the difference between doing business and not doing business, and

improving facilitation will amplify trade potential in Cameroon. Consequently, improving the

import/export environment in Cameroon, in particular by reducing the number of documents and

simplifying procedures for trade would be an important short term measure for improving the overall

business environment.

The World Bank Group is very active in the trade and transport facilitation area in Cameroon and

CEMAC. A CEMAC Trade and Transport facilitation project aims to create efficient transit corridors

between Douala and Bangui and Douala and N’Djamena. A Central Africa backbone project to provide

access to modern communication technologies, while, a West and Central Africa Air Transport project to

improve compliance with international standards in the air transport area. The European Union, through

the Program to Support the Customs Modernization Plan in Cameroon (PAMOD), the World Customs

Organization with its capacity building initiative, and the United Nations Conference on Trade and

Development (UNCTAD), which is responsible for the computerization of customs services are also

assisting Cameroon Customs.

The rest of this memo is organized as follows. Section II provides a brief discussion of the key findings in

the trade transactions process (with a focus on imports) in Cameroon and is supplemented by a

description of border clearance processes. Section III outlines recommendations to further improve the

trade logistics system.

Section II ‐ Key findings

(A) Stakeholders – roles and coordination

A large number of stakeholders are involved in the trade logistics process in Cameroon. 42 of them are members of the National Committee for Trade Facilitation! This section focuses on the roles of selected agencies/parties and discusses some issues and challenges faced in the trade transaction process.

National Committee for Trade Facilitation

The National Committee for Trade Facilitation was first established as the National Committee for

Maritime Trade Facilitation in 2001 and reports directly to the Prime Minister (PM). The Committee is

comprised of 42 stakeholders from across the Trade Logistics spectrum. They meet regularly (every 3

7 Forthcoming research paper (Subramanian, Anderson and Lee (2010)

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months) to discuss issues related to clearance of goods and make recommendations for improvement to

the system. The recommendations are sent to the PM who is responsible for their implementation.

Implemented recommendations are validated through an independent ‘validation committee’. Reviews

and studies of the trade process are continuously conducted. These help continuously gauge the

efficiency of the system. For instance, an analysis conducted of the leading 20 importers has shown that

cargo can be cleared within 7 days even under the current trade logistics process. These 20 importers

account for almost 40 percent of trade. The Association of Employers of Cameroon (GICAM) chairs the

Committee.

While the committee has been renamed with the phrase ‘maritime’ dropped, the new stakeholders

including the airport authority and those from the road transport sector have not yet formally joined ‐

and as such the committee is still functioning as a maritime committee.

Guichet Unique Des Operations Du Commerce Exterieur‐Gie (GUCE)

The Guichet Unique Des Operations Du Commerce Exterieur‐Gie (GUCE) was established in July 1999 to

serve as a one stop shop for external trade. The objectives were to speed up trade transactions by

bringing all agencies and stakeholders under one roof and thus reduce documentation time, improve

interaction between agencies and serve as an information hub for traders/users on trade procedures. It

is housed in a building shared with other agencies including the Douala Port Authority (DPA).

Stakeholders ‐ The Phytosanitary service, The National Cocoa and Coffee Board (NCCB), Customs, DPA,

Banks, SGS – all have offices at GUCE and are linked to their parent agencies/organizations. GUCE has a

general assembly and a board whose membership comprises the government and user groups and their

organizations.

At the GUCE building the ‘reception’ is the first interaction users have on entering the one stop shop.

This counter determines what services are required for a particular consignment – and in return GUCE

receives a fee for services rendered. While it was set up to simplify procedures in a manual manner, it is

expected that transactions would be electronic in nature in the future. Towards achieving that goal, two

procedures have been automated ‐ these are the sharing of the manifest between Port and Customs

and the process for used car clearance. 8 other procedures are being automated (including the issuance

of the insurance certificate). While the automation process is ongoing all actors are likely to remain at

GUCE to minimize technical issues for some time i.e. many agencies do not have sufficient

computerization or resources to manage challenges that are part of functioning in an electronic

environment. GUCE staff are thus on hand to help with any such issues.

When the process was designed, a time limit to process the transaction was determined in discussion

with each agency. At the start of the procedure the GUCE procedure sheet is attached to the consignee’s

documents that seek to measure the performance of the agencies i.e. time taken to service clients.

Reasons for variations from prescribed limits and actions to be taken are often discussed in GUCE

stakeholder meetings. Additionally, GUCE conducts analysis and studies on trade transaction

performance. Key reports include (i) ‘Synthese sur les delais de passage portuaire, Analyse et suivi des

delais’ (Jan‐Mar 2010, & 2009) undertaken to measure the amount of time it took to clear cargo through

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the port of Douala; (ii) “Evaluation des actions de dématérialisation des procédures et d’intégration des

systems ‐ Phase 1 ‐ Annexe 1 au rapport d’étude préliminaire, Recueil de textes législatifs et

réglementaires” which is a list of the legislation issued by various agencies that govern the flow of trade

in Cameroon.

National Shipper’s Council

The National Shippers Council was first created in 1975 to cater to protect shipper’s interests, negotiate

transport tariffs, mediate between its partners, and disseminate trade statistics. Then, the Government

of Cameroon was directly involved in trading and shipping and hence the Council was used to protect its

interests in negotiating freight rates with the shipping lines. It was later reorganized and in its current

role it helps train importers and exporters on various trade related processes, provides surveys on traffic

and trade data, publishes statistics and other publications like newsletters, and importantly issues a

cargo tracking note and is thus directly involved in the trade logistics process. This cargo tracking note

contains consignment details from the bill of lading and invoice (and as such is duplicative in nature).

The council is financed from the fees assessed from issuing this note.

Chamber of Commerce

The chamber of commerce issues the certificate of origin (for non agricultural products) and charges

upto 12 USD per certificate depending on the type of product. The exporter brings to the chamber’s

office an invoice, proof of company registration, proof that he/she has paid his/her annual business

registration and is issued a certificate within the same day. Between 5000‐7000 certificates are issued

annually.

The Association of Cameroon Insurance Companies (ASAC)

The insurance certificate was made mandatory through the passage of a decree in 1993 to promote the

local insurance industry. As such the Association of Cameroon Insurance Companies (ASAC) plays a

direct role in the trade logistics process.

Ministry of Trade (MoT)

The MoT carries out two major roles in the trade logistics process in Cameroon. It is responsible for the

annual registration of economic operators for import and export. The registration costs 50,000 CFA and

can be renewed for 10,000 CFA thereon. The process for registration ‐ an application for registration

along with other documentation i.e. company registration, tax certificates are submitted to the MoT for

registration. The second role of the MoT is to approve imports of upto 2 million CFA (with imports > 2

million going through the PSI process).

Department of Fisheries, Ministry of Livestock, Fisheries and Livestock Industries (MINEPIA)

Through the Fisheries and Aquaculture Directorate, this ministry is responsible for a host of functions

including one related to trade ‐ issuing import and export licenses for aquaculture species. The Ministry

determines the quota for fish importation based on various factors (i.e. assessment of storage capacity

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available) and issues import licenses accordingly. Cameroon imports nearly 135,000 tons of fish while

the domestic catch is about 64,000 tons.

Phytosanitary Service, Ministry of Agriculture and Rural Development (MoARM)

The phytosanitary service plays an important role in the trade process for plants, plant products, and

pesticides. Any such product needs a clearance from the department before Customs duties are levied.

The MoARM has an office in GUCE where the applicant brings his documents – the process is described

in the process map in section IIC. Physical inspections are performed almost 50 percent of the time. In

addition, the Ministry inspects the storage conditions on a daily basis to check produce/cargo storage

conditions particularly humidity and floor conditions. Certain cargo is also often inspected on board the

vessel and are only unloaded if it meets quality criteria. They also issue certificates for CEMAC transit

countries. If sampling is required, it can often lead to delays as the phytosanitary service lacks quality

laboratories.

National Ports Authority (APN/NPA)

The National Ports Authority has three major roles in the Cameroon trade logistics process. It

‐ Determines the vision for the future by developing the National Port Master Plan

‐ Controls the regulation for all ports in Cameroon i.e. a supervision role

‐ Focuses on building port competitiveness by trying to identify areas of improvement

The NPA reports to the Ministry of Transport. The Airport Authority in Cameroon is a separate body8.

Port and other related stakeholders ‐ Port Authority of Douala (PAD); Douala International Terminal

(DIT); Association of Professional Stevedores of Cameroon (GPAC)9

The port of Douala is a river port situated on the southeastern shore of the Wouri River estuary, on the

Atlantic coast about 130 miles (210 km) west of Yaoundé. The port of Douala, located 24km upstream

on the left hand bank on the River Wouri, handles most of Cameroon’s international trade. The port has

11 cargo berths, 3 container berths, 2 berths for fresh produce and 1 tanker berth. Traffic at the port has

been impacted by the global recession. In 2008, PAD saw annual traffic of 2857 ships of which 1058

were ocean going compared to 3299 ships in 2007, of which 1057 were ocean going10. 2009 saw import

volumes of 5.2 million metric tons of general cargo, 1.8 million metric tons of export cargo, and 0.72

million metric tons of cargo for/from CEMAC countries. The rapid growth of containerized cargo has led

to some displacing of bulk and conventional cargo at Douala for imports. Major trading partners for

Cameroon are France, China, Belgium, Spain, The Netherlands, Brazil, Italy and the United States.

Forestry products at over 45 percent11 are the dominant exports with cocoa, bananas, cotton, rubber

and aluminum ingot and pig iron comprising the other major exports from Cameroon. Petroleum and by

8 Air cargo clearance was not assessed in this mission 9 DIT manages only containers and break bulk and GPAC includes all companies involved in bulk (and SOCOMAR for roll on roll

off) 10 The CNSC book of Statistics, Cameroon National Shippers Council, 2008. 11 GPAC, 2008

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products, cement and clinker (cement raw material), rice, wheat, fish, and aluminum bauxite comprise

the major imports12.

Figure 2: Port of Douala

The port is owned 100 percent by the state. The board of directors has both public and private sector

members. The port authority has outsourced all handling to stevedoring companies. There are 14

stevedoring companies and are members of the ‘Association of Professional Stevedores of Cameroon’

(GPAC). Five companies are local while the rest are multinationals. There is no license required for

stevedoring though the request is submitted for advice to the Orientation Council, a consultative board

of port’s agencies and stevedores. The port has rented out the space to the stevedoring association

which rents out space to its members. As such the port collects rents from these companies and is not

involved in many day to day operations. Douala International Terminal (DIT) was created in 2003 and

took over control of container terminal in 2005. The services offered are ship handling and ground

management of the container park which is 85 percent of their business (by volume) with the rest being

bulk cargo and reefers.

“The Port Authority has implemented a Port Management System (CARGO) that has been operational

since 2008. Exchange protocols and physical interconnection between GUCE and the Port System are

today operational. The terminal is quite congested (88% occupancy rate). The Terminal Operating

12 GPAC, 2008

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Company (Douala International Terminal – DIT) implemented a new Terminal Operating System (TOS) in

2009. A new system is also in place to enable electronic booking of container deliveries by consignees.

SGS, has recently deployed an online tracking system (tradeworks) accessible to Customs and

Shippers13”. The port authority has conducted a diagnostic of the different systems used within the port

by various stakeholders (including stevedoring companies) and want to unify and create a port

community system (PCS) by 2011. Technical studies have also been conducted and two firms have been

chosen to implement the PCS.

Figure 3: DIT terminal

Port charges are decided by a technical committee comprised of 15 members (stakeholders). Port gives

11 days for free storage after which it charges demurrage. Most stakeholders felt port charges were

lower than warehousing costs in Douala city – and this leads to a tendency to use port as a cargo storage

shed. Currently, ports charge for every bill of lading i.e. issuing over 70,000 bills per year for those

declarations.

Pre‐shipment Inspection Agency/SGS

13 World Bank mission reports, Raballand, 2010

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Pre‐shipment inspections (PSI) were introduced in Cameroon in 1988/89 for pre‐importation inspection

at country of export; used vehicle importation and forest and forest product exportation. The key

reasons for using PSI in Cameroon are (i) classification and valuation; (ii) quality and quantity for

Customs purposes; and (iii) and import eligibility14.

Cameroon exempts imports under 2 million CFA from PSI. The PSI process is described in the process

map in section IIC. The “Declaration d’Importation” (DI) issued is valid for 9 months and can be extended

for 3 more months. The value of imports can exceed the DI by upto 10 percent. Inspection fees collected

are directly paid into a Government of Cameroon account. SGS the contractor is paid a fee based on

revenues raised in duties and taxes. SGS requires the invoice, packing list and bill of lading to issue the

final report. Importers have the option to appeal through an appeal mechanism that allows importers to

challenge the valuation. This challenge is first lodged with SGS and if agreement is not reached it is

escalated to an appeals committee comprising of various stakeholders that includes Customs, SGS,

traders, and customs brokers who meet in Yaoundé to take a decision on the appeal.

Customs/Douane

Cameroon Customs has a similar role to traditional Customs agencies – revenue collection, trade

facilitation and security. However, due to outsourced pre‐shipment inspections a key part of the

revenue collection role i.e. classification and valuation is of a limited nature. Some key features and

issues in Customs control are ‐

SYDONIA ‐ Customs has been implementing SYDONIA ++ since 2007. Major stations have

implemented SYDONIA. However, SYDONIA systems have not been interlinked with each other.

At this stage the primary objective seems to be the full utilization of SYDONIA ++ and all its

modules and as such there is no plan to upgrade to SYDONIA World/another system15.

Performance based contracts ‐ Customs has also been piloting a unique performance based

contract system for clearance (with the assistance of the World Bank see footnote 15 for link) ‐

which has led to large improvements in clearance times i.e. 83 percent of declarations are

currently processed on the day of their registration at Douala Port I16 compared to 66 percent

before the pilot and increase in revenues by US$15 million. “Customs frontline officers signed a

contract with the Head of customs in Cameroon, committing to reaching thresholds and targets

for eight indicators (four related to trade facilitation and four related to bad practices and

fraud). Indicators have been monitored closely and results discussed during the process. At the

end of each month, individual results were discussed between customs offices management and

frontline officers. Indicators that measured the improvement in trade facilitation include the

percentage of declarations processed on the day of their registration, declarations processed

14 PSI is often employed for two reasons – to prevent capital flight (where forex controls exist) and/or losses in government

revenue through under‐invoicing. In Cameroon, it is the latter. Under the Uruguay Round Agreement it was agreed that countries using the services of PSI companies for verification of prices should do so only for temporary periods of time with a long term objective of reducing their dependence on these services by developing Customs capacity to perform valuation. 15 SIDONIA++ will also need to be connected to the proposed ESW – the mission did not assess Customs plans for the same 16 Douala Port I is responsible for processing containerized imports intended for consumption.

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five or more days after their registration, and those not processed within one month of their

registration17”.

Risk management (RM) – RM at Customs is still at very early stages of implementation. A risk

management unit was created in June 2006 when scanners were procured. The initial objective

was to select goods for scanning. Channels assigned are primarily yellow (document inspection)

or red (physical inspection of goods) with almost 30 percent of goods being allocated red. Cargo

risk is determined through an analysis of the declaration and manifest with an aim of preventing

fraud. Factors that determine channel include origin of goods, consignee, and type of good. All

second hand cars however are physically inspected. Goods selected are then scanned. However,

no fee is charged for scanning. In general risk management application is in its early stages – a

risk database has not yet been developed. The risk management unit is currently being

restructured and it was not clear whether Customs is drafting/revising a risk management

implementation strategy. Additionally, the SYDONIA system seems to have technical issues in

programming channels. Inspections are often performed if goods have not been inspected at

the PSI stage or electronically scanned at Douala. While selected importers are often allowed to

move cargo to their premises under a Customs seal, final clearance after inspections can often

be delayed for upto 2 weeks. Scanning and inspections are often additional to the fact that PSI

has been implemented for a large number of imports > 2 million CFA. The CEMAC region has a

common Customs code and as Cameroon develops a modern risk management system it may

require a modification of the code at the CEMAC level18.

Other key stakeholders in the Cameroon Trade Logistics process include ‐

The Chamber of Commerce, Industry and Mines of Cameroon (CCIMC); The Association of Employers of Cameroon (GICAM); The Shipping Agents and Ship Owners Union of Cameroon (UCAM); The Licensed Customs and Forwarding Agents’ Union of Cameroon (SCADTC); The Cameroon Importers and Exporters Trade Union (SCIEC); The Cameroon Association of Exporters (GEC); The Association of Professional Credit Institutions of Cameroon (APECCAM); The Cameroon Association of Importers (GIC); The National Union of Road Transporters of Cameroon (SNTRC); The Cameroon Banana Association (ASSOBACAM); The Union of Transport and Transit Auxiliaries (SYNAUTRATA).

17 Cameroon Increases Customs Revenues by Implementing Performance Contracts 18 CEMAC Customs Code was not assessed.

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Figure 4: Scanner at Port of Douala

(B) Other topics in border clearance

Simultaneous inspections

Other technical control agencies are also involved in the physical inspection process. They conduct

simultaneous inspections onboard the ship and wharf under the recent Arrete N 143 of 30th August 2010

issued by the Prime Minister’s Office. The decree authorizes the Ministry of Commerce to coordinate

technical control inspections for import cargo. Agencies involved include environment, agriculture,

fisheries, forests and plants. While inspections need to be simultaneous agencies may charge separate

fees.

Transit

A separate transit regime exists in agreement with other CEMAC countries. A bond is executed at point

of entry i.e. port for import and released at point of exit i.e. at border with Chad/CAR. Earlier the transit

cargo required both inspections and an escort. Inspection cost 200,000 CFA while escorts cost 250,000

CFA. However, currently a guarantee has been executed which is based on the value of goods. GPS

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systems have been implemented and trucks are also monitored through that system. On presentation of

delivery of goods, the bond is released within 24 hours. The EU is keen on assisting all CEMAC countries

to move to a common transit system (using SYDONIA).

Electronic Commerce

Electronic commerce and payment laws have been passed in December 2009. An analysis by GUCE

shows that aside from the national laws on ecommerce and security 140 other laws would need to be

amended to allow for a full use of electronic document, signature and payment systems.

Electronic Single Window (ESW)

GUCE’s report on paperless trade and integration of systems from July 2010 seeks to map current state

of automation (including technical capacity and infrastructure), map future strategy for automation and

system integration and determine resources required to achieve those goals. The National Committee

for Trade Facilitation is to meet to discuss details on the implementation of the ESW. One of the key

decisions that need to be made regarding the implementation of an ESW is on where to house it. GUCE

is currently already automating procedures and is a prime candidate. At the same time the port is

evaluating various port community systems and is keen on the PCS being a default ESW. It also seems

that the National Shippers Council whose current mandate is discussed in section IIA is keen on hosting

and maintaining the ESW.

(C) Import and export clearance processes

See import process flow at Douala Port in Figure 519 below ‐

19 CB – Customs Broker; SGS – Preshipment inspection agency; SA – Shipping Agent; DIT – Douala International Terminal; SC – Stevedoring Companies; IC – Insurance Companies; NSC – National Shippers Council; PAD – Port Authority of Douala;

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Actors Procedure/Action Data/Documents Required/Issued Time Cost Comments

T‐min T‐max C‐min C‐max

Prearrival procedures: PSI requirement (goods being imported with a CFA value of > 2 million)

CB, SGS

The CB brings documents to SGS to open an import license at least 72 hours prior to arrival of ship. This can also be done for select users on the website.

Documents needed: (i) Proforma invoice; (ii) Authorizations/ Licenses where required from the Ministry of Industry etc; (iii) Certificate of Conformity (93 products); (iv) Packing list; (v) Bill of lading/seaway bill;

Most goods > 2 million CFA are subject to PSI

SGS, CB, Banks

Valuation is confirmed/agreed upon, inspection fees are paid into Ministry of Finance bank account and SGS issues an Import License

Document issued: Declaration 'd' importation (Import license) with a unique number

This process is often dependent on documents provided by supplier and the requirement for an actual physical inspection process

CB, SGS

The CB/importer prepares a request for verification after receiving the import license to SGS Document issued: Temporary AVI

Prior to ship arrival

SGS

SGS reviews documents and then contacts its office in exporting country

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SGS

SGS in exporting country contacts supplier and fixes inspection time

SGS Document inspection and often physical inspection is conducted

2 days

5 days 110,000 CFA

0.95% CIF

Prearrival procedures: Cargo Manifest

SA

Cargo manifest (CM) is electronically transmitted to Shipping Agent

This is not always the case but when done ‐ 24 hours before arrival of ship.

Shipping Agent submits copy of CM to Customs/Douane

1 hour 2 days

In most cases, this step happens after arrival of ship.

Prearrival procedures: Customs Clearance initiation

CB, Douane

CB initiates Customs clearance process. Customs declaration is made on SYDONIA

Douane Douane assigns red or yellow channel

1 hour 1 day

If SGS inspection has been done at country of export, often a physical inspection is not necessary if the SGS seal is intact.

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Cargo arrival and unloading

Vessel Arrives at Douala

Douane Douane Agent boards ship and validates manifest against cargo

1 hour

8 hours

SC/DIT

Cargo is then unloaded by DIT/one of the Stevedoring companies

1 hour 1 day

SC

Cargo is stored at one of the warehouses at the port (managed privately)

1 hour 1 day

Documentation assembly

While some of this documentation assembly can take place prior to ship arrival, in practice that is often not the case.

CB, IC, Banks

CB pays and collects insurance document

Documents required: Invoice, Packing List Document issued: Insurance document

1 hour 1 day

CB, NSC

The CB now takes his documents to the National Shipper Council which issues a Cargo Tracking Note in return for a payment

Documents required: Invoice; Bill of Lading. Document Issued: Cargo Tracking Note

1 hour 1 day

100 Euros

Total time pre GUCE 5 days

11 days

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GUCE Processes

CB, GUCE

Customs Broker brings documents to GUCE and pays a processing fee for services.

Documents required: Commercial invoice; Freight invoice (if freight charges not on invoice); Insurance certificate; Bill of lading/Seaway bill; Packing list. Additional documents: Certificates (sanitary, phytosanitary, veterinary, qualitative, technical); The domiciled Import Declaration (ID) (for transactions between CFAF 1 and 2 million only); Declaration 'd' importation (Import license) for CFA > 2 million

0 hours

1 hours

12000 CFA

Ideally OSS procedures could be performed prior to arrival of cargo – but this is not done for most importation

CB, GUCE

The CB receives a procedure sheet which details the procedures the consignment has to go through

Document issued: GUCE Procedure sheet

0 hours

1 hours

CB, PAD

CB goes to the PAD office and submit documents to determine charges to be paid

Documents required: Seaway bill and any others needed to determine charges.

0 hours

1 hour

CB, PAD

Invoice of PAD charges generated for the CB Document issued: PAD Invoice

0 hours

2 hours

CB, Bank

CB goes to the bank within GUCE to pay port charges

0 hours

2 hours

Guce Processes: Technical Control

For technical control CB takes documents to the respective office at GUCE i.e. PHYTO described below

200‐300 consignments for export and 75‐120 consignments for import are handled by the office daily

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CB, Phyto.

Broker brings required documents to Phytosanitary office at GUCE

Documents required: (i) Bill of Lading; (ii) Other technical document on specifics of produce i.e. plant health certificate; (iii) application 1000 CFA

Phyto.

Documents are analyzed by the Ministry's Inspection Officer

1 hours

8 hours

Phyto.

Depending on product risk, a physical inspection maybe performed

1 hours

8 hours

Phyto.

If it is determined testing is required, a sample is taken

1 hours

15 days

Sampling and testing is dependent on the product. For instance it can take upto 15 days to test pesticides due to the paucity of quality labs.

Phyto.

If goods are approved a clearance certificate is issued to the CB

Document issued: Phytosanitary certificate

1 hours

8 hours

CB

In parallel, the Customs Broker can continue to submit documents to other services within GUICE

CB exits with all procedures completed at the OSS

1 hour 3 days 12000CFA

12000CFA + stamp duties if any

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Final Document Assembly

CB, SGS

CB brings all documents to SGS to request avi attestation of verification of importation

Documents required: (i) Invoice; (ii) Bill of Lading; (iii) Declaration; (iv) Insurance certificate; (v) Cargo Tracking Note; (vi) Technical control documents Document issued: Avi attestation of verification of importation

8 hours 2 days

While the avi can be obtained prior to ship arrival ‐ this is often not the case as some documents required may not have been obtained.

Final Customs Clearance

CB, Douane

CB brings all documents to Customs for clearance

Documents required: (i) Invoice; (ii) Bill of Lading; (iii) Declaration; (iv) Avi attestation of verification of importation; (v) Packing List; (vi) Technical control certificates (phyto, conformity etc if any); (vii) Port payment receipt; (viii) Certificates of origin; (ix) insurance; (x) manifest ne variatur

A key constraint is the the physical submission of clearance documents to Customs after ship arrival

Douane Yellow channel goods go through a document inspection

1 hour 1 day

Douane

Red channel goods go through the scanner. Scanned goods may also go through a physical inspection

1 hour 3 days

SGS and Douane conduct the scanning

CB, Bank

CB makes payment for all duties, taxes and fees

Document issued: Customs Clearance

1 hour 1 day

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Port Clearance process

CB, SC

At the port, the CB presents the clearance documents and makes payment. Exit note/delivery note is printed and validated at the gate by shipping agents.

Documents required: All clearance documents related to consignment from the process above. Document issued: Exit/delivery note

1 day 2 days

CB, PAD

This exit note/delivery note is shown at the gate to exit the premises. Separate exit notes are required from various agencies to leave the port.

Customs gives clearance ahead of other agencies and hence separate exit notes are required (cehck)

Post GUCE time 2 days 8 days

Total clearance time 7 days

19 days

Figure 5: Import process, Douala Port, source – stakeholder interviews

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The export clearance process for agribusiness produce (coffee/cocoa) has many similarities to the

processes described above20 and is also burdensome. However, there are some specific steps that need

to be undertaken – some of which are described below –

‐ The exporter contacts the private contractor responsible for technical and quality control

technical control agencies (ONCC) during contract preparation,

‐ Once the exporter has received all documentation, he submits them to the clearing agent who

prepares the (D6) declaration.

Documents required: (i) Registration receipt; (ii) Quality form; (iii) Transit order

‐ The clearing agent then takes the entire set of documents to SGS who issue the Declaration d'

exportation

‐ Following this, the clearing agent makes port payments (1298 CFA per ton)

‐ The clearing agent then submits bank documents to GUCE (for forex control). At GUCE he also

goes through a process to obtain a phytosanitary certificate.

‐ In parallel to the GUCE process the CB/exporter brings an export invoice and other documents

to the Chamber of Commerce. On payment of a fee he receives his Certificate of Origin.

Documents required: Invoice, company registration.

Document issued: Certificate of origin (4‐24 hours, 12USD)

‐ Payments are then made to Stevedores, ports, CNCC, and ONCC at the same time

(D) Binding constraints identified through process mapping/scoping mission

The sheer number of stakeholders in the trade transaction process in Cameroon leads to the need for a

large amount of coordination and cooperation. The National Committee for Trade Facilitation and GUCE

have been welcome developments that have over the years helped improve trade logistics performance

in Cameroon by improving institutional coordination. There are also other joint activities conducted by

border control agencies – the recent decree by the Prime Minister to conduct simultaneous inspections

to be coordinated by the Ministry of Commerce and Trade that are a positive development.

However, there are still a large number of issues in trade clearance that would help reduce clearance

time. Three major issues identified in the scoping mission are discussed below –

(1) Prevalence of Hardcopy Documents for Information Exchange

Manual bill processing – Most agencies that require payments still submit individual bills that

when paid are receipted individually. For instance GUCE bills on a per ‘Bill of Lading’ (BL) basis.

Some clearing agents often present a large number of BLs. However, payment still needs to be

made individually for each BL.

Cargo Manifest ‐ Submitted by shipping line’s agent in hardcopies to Customs and Port Authority

(via Customs) because the agencies claim they have no legal authority to accept21 although

20 A full process map of the export process was not undertaken and as such only select processes are reported. 21 National laws on electronic commerce were passed in December 2009.

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some have technical capacity to receive documents electronically. Manual handling requires

time, is prone to errors and slows down the start of the terminal handling and clearance

process;

Customs declaration – Although the trader or his clearing agent can submit the declaration

electronically, SGS and Customs require that it must be accompanied by hardcopy documents.

This requirement subtracts the benefits that electronic automation is able to confer, which is

the removal of hard copy documents. While SYDONIA ++ can be configured to be able to receive

scanned copies of supporting documentation, current SYDONIA implementation and roll out

levels imply that this step is still far away.

Stakeholders at GUCE: While GUCE is embarking on automating various procedures at the one

stop shop, most government Departments, such as Ministry of Agriculture, Ministry of Trade,

Ministry of Livestock, Fisheries and Livestock Industries and other agencies have very little

automation or processes streamlined for computerization.

Additionally, while the national legal framework to recognize documents exchanged

electronically/ e‐signatures was passed in December 2009 most trade related agencies have not

made any progress to actually doing so.

While the inter‐connectivity among the agencies is low‐tech means (hardcopy information exchange), it

was also noted that the in‐house processes of these agencies are not that much ahead either, as noted

below.

(2) Outdated Practices Continue to Dominate In‐House Processes

Port Authority has a computerized system for the administration process but no data base

system to connect with other stakeholders to manage and share information. Currently, many

work activities are still processed and executed manually. While a large number of stevedoring

companies have IT systems they are not connected with each other or the port. DIT has recently

installed an automated computer system ‐ and the port hopes to implement a project to

develop a port community system that will connect all these systems;

Customs has been implementing SYDONIA since 2006 but has still not interlinked various offices.

Application of risk management is not systematic (no dynamic risk profiles) and inspection levels

are high despite PSI. There is no pre‐arrival clearance system though there is some discussion

within Douane. The 2002 version of the harmonized system (HS) code is still used ‐ a planned

update to HS 2007 was not confirmed.

Data transfer from Douane to PAD is still an issue and as such impacts the trade process.

Other technical control agencies remain manually oriented and have no concrete plans for

modernization;

Traders complain that some stevedoring companies lack equipment and thus the ability to

handle multiple tasks i.e. unloading cargo from ships and loading cargo onto trucks

simultaneously often causing delays. Additionally, it is also felt by the trading community that

container management systems are poor.

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Payment systems of agencies still based on conventional methods (certified checks or cash –

rather than e‐payment). Some large importers do use transfers; however need to produce a

receipt for clearance.

Cargo can often go through a multiple inspection process i.e. scanning and physical inspection

by Customs and other technical control agencies. The inspection process is dependent on

‘inspector timings’ and coordination and often analysis of scan/findings are time consuming lead

to delays. Even after clearance and issuance of exit note – security agencies (police/gendarmes

and others) frequently inspect documents and cargo at exit gate – leading to further delays.

While Customs is using some sort of risk assessments, its lack of sophistication and the absence

of coordinated border management in terms of risk pooling among agencies is a cause of

concern and as such results in delays in clearance and inefficiencies across the system.

Aside from inefficiencies on the government side, there are also a large number of issues on the private

sector side that inhibit smooth trade logistics flows that include clearing agents who lack training and

professionalism, inefficient maritime agents and small traders who are unfamiliar with trade transaction

systems. As a result the throughput of the systems is often also determined by their efficiency. Some

issues are discussed below.

(3) Private sector inefficiency

Clearing agents/Shipping agents/transporters: Agents and operators can also cause delays by (i)

not beginning the clearance process immediately on arrival of ship; (ii) not understanding

Customs rules and laws including on valuation and classification leading to errors and

amendments; (iii) creating bottlenecks and inefficiencies in the container delivery/truck pickup

process.

Importers: Importer led delays are normally due to (i) inability to arrange crucial documents in

time for clearance i.e. incomplete documentation submitted by foreign suppliers; (ii) financial ‐

an inability to arrange money for duty payment on time due to lack of working capital.

Inefficient Inventory Management: A World Bank Mission22 recently investigated inventory

management in the private sector in Cameroon and concluded that modern logistics systems

are lacking. They found that ‐

“The leading trading companies and wholesalers work with high inventory coverage,

fixed replenishment quantities and constant lead time forecasts. They are historical

operators, risk‐adverse, and the seasonality of sales coupled to low price competition

intensity do not encourage them to rethink the management of their supply chain. They

are also negatively affected by an apparently large variance of vessel arrival times due

to the absence of fixed berthing programs. They have a low level of integration of

upstream logistics and transport operations and generally purchase their goods under

22 World Bank mission reports, Raballand, 2010

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CIF Incoterms with little if no control over maritime operations. They have little

awareness of their actual dwell times since they outsource clearing and forwarding

activities to brokers under quite tolerant contractual terms (10 to 20 days to clear goods)

and then charge to their customers the increased logistics costs”.

A combination of the above factors of private sector inefficiency often also leads to delays in border

clearance – adding to regulatory and procedural burdens from agencies involved in trade transaction

clearance and increasing cost of doing business.

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Section III Recommendations

Actionable Item

Responsibility Implementation

Additional Comments

Person Agency Starting Date

Completion Date

6 Month Focus

1 Inter‐agency coordination

1.1 Key coordination related activities for discussion ‐


Feb 2011 Sept 30 2011

It is important to clarify plans for ESW. While GUCE has begun automating certain procedures and detailed plans for the ESW, PAD is also developing a Port Community System. It is imperative that a joint stakeholder decision be taken on the automation of trade procedures.

Obtain stakeholder agreement on the strategy for implementing an electronic single window.

✔

Evaluate simplifying duplicate/dual licensed goods

Evaluate developing a simplified payment mechanism for fees and charges across trade related agencies. Medium term objective should be to plan for electronic payments. As an interim measure evaluate the possibility of making all payments at one stop.

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Working hours: As a first step working in the short term, hours need to be harmonized. Currently many agencies and members from the private sector do not work continuously (unlike some agencies/actors who have an 8:00 am to 6:00 pm schedule). Harmonizing working hours would improve efficiency. In the medium term, the National Trade Facilitation Committee could discuss strategies on increasing working hours steadily until the clearance process becomes 24 hours, 7 days a week. While this will depend on increase in traffic, discussing mechanisms to pilot this in peak seasons will increase the speed of the clearance process.

✔

1.2

E‐commerce/signature/payment related laws ‐ Speed up and encourage adoption of laws for electronic commerce and electronic payments. Electronic payments will also reduce delays related to confirmation of check clearance at Customs

GUCE, National

Committee for Trade Facilitation

Feb 2011 Feb 2012

Automation, electronic processing

and certification

GUCE, National

Committee for Trade

Feb 2011 Feb 2012

Make available electronic versions

of all forms

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Ensure capability to process forms electronically ‐ hardware, software and personnel are available ‐ automate

Facilitation

Review national laws for electronic processing and certification

Proceed with electronic certification once national laws are in place

Communicate with business community

2 Documentation

2.1 Remove the requirement for insurance certificate in the external trade process.


Feb 2011 Jun 2011

✔

The current practice of making the certificate mandatory for clearance of goods in the external trade process is burdensome and adds delays and costs for business.

Review Relevant Notification/Law if

applicable

2.2 Remove the requirement for the cargo tracking note from the import/export process.


Feb 2011 Jun 2011

✔ The Cargo tracking note contains information taken from invoices, bill of lading and other documents already available to technical control agencies.

Review Relevant Notification/Law if

applicable

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Evaluate alternate funding

mechanisms for National Shippers Council

✔

2.3 Clarify documentation requirements


Feb 2011 Jun 2011

Perform an inventory of all import/export official fees and charges by commodity and agency.

✔

Streamline the process for issuance of products that require permits from two agencies.

Ensure manifest is available to all key parties ‐ Port, Douane, Phytosanitary department and others 24/48 hours in advance of arrival of ship

Ensure all documentation after arrival of ship is channeled through a single agency ‐ similar to the need for all inspections to be coordinated through the Ministry of Commerce

✔

On arrival of the ship, various agencies and ministries demand documents from the vessel. Vessel documents should be collected by one authorized agency i.e. Customs/Ministry of Commerce/Port who need to make copies of the documents available to all other stakeholders.

3 Procedures and transactions at technical control agencies and key stakeholders

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3.1 GUCE

GUCE Feb 2011 Dec 31 2011

Evaluate consolidation of BL payments ‐ should bill on a consolidated basis to the clearing agent – to reduce transaction time and lower costs for all parties including itself.

✔

Encourage conducting GUCE procedures prior to arrival of ship ‐ evaluate feasibility

Review and amend law to incorporate changes

3.2 SGS/Pre Shipment Inspections

SGS Feb 2011 Sept 30 2011

Remove the requirement to bring all documents to SGS (including cargo release note and insurance certificate) for receipt of the avis attestation of verification of importation. Instead, on completion of SGS procedures in exporting country SGS should automatically issue the avis to the Customs Broker. Ideally, the avis should be collected prior to the arrival of goods.

✔


Implement

3.3 National Shippers Council (NSC) NSC Feb 2011 Sept 30 2011

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Create a strategy for the Council that lists all value adding activities to be provided to various stakeholders in the trade logistics process. As such this strategy would evaluate an alternate method to finance the activities of the Council.

✔

For instance, the Council could charge for its training programs, publications and thus be self funding.

The National Shippers Council could also host a website that could be the repository of information for traders (exporters/importers) and even investors. A user friendly website that enables all parties to gather information on the trade process in Cameroon would be a hugely value adding activity.


Implement

3.4 PAD/Stevedores/DIT

SGS Feb 2011 Feb 2012

Improve container management process ‐ including movement of containers for physical inspection , speeding up invoicing and receipt system

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Speed up port payment system ‐ ideally all port charges should be paid within 24 hours of arrival of ship

✔

Complete computerization of container management process

Implement

4 Douane/Customs

4.1 Amendments, errors and penalties

Improve the invoice amendment process. Currently discrepancies between the invoice and actual landed cargo take upto 10 days to correct ‐ often leading importers to incur demurrage charges at the port.

Douane Feb 2011 Sept 2011 ✔

Revise procedures and penalty schedules for minor errors of commission and omission which can often significantly delay clearance of cargo.

Douane Feb 2011 Feb 2012

4.2 Speed up introduction of electronic payments.

4.3 Computerization and ASYCUDA implementation

Implement remaining ASYCUDA modules

Interlink all Customs stations ( ASYCUDA)

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4.4 Risk Management

Douane Feb 2011 Feb 2012

Detailed plan to be implemented in a phased approach

Reappoint Risk Management Implementation Team

✔

Create detailed risk management strategy including PCA ‐ with implementation timeline. Incorporate international best practice including on preclearance, channels, and post clearance audit

Identify resources, training needs, legal amendments to customs code, and other issues that need to be addressed

Move towards implementing HS 2007

Review and amend law to incorporate changes in line with international best practice (Kyoto Convention).

Assess implications for CEMAC

Customs Code.

Implement

5 Communication and Information

5.1 Online dissemination

Working Group on Trade

Logistics and individual ministries

Feb 2011 Feb 2012

Evaluate all trade related websites ✔

Select/set up one central website for all trade related information/forms i.e. National Shippers Website/GUCE or alternative.

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Ensure all updates and changes to lists, procedures, including information on licenses, documents and procedures are immediately updated and available.

and agencies

Secure necessary funding, personnel, technology hardware and software

Implement

5.2 Assess dissemination channels

Working Group on Trade

Logistics and individual ministries

and agencies

Feb 2011 Feb 2012

Evaluate current trade related

information dissemination channels for all agencies/ministries

✔

Create an action plan to introduce

standardized mechanisms to display and disseminate information.

✔

Publicly display the required documentation and the process per procedure/document, together with time requirements and any costs, at any office serving parties to trade

5.3 Develop a reform communication strategy

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The committee needs to publicize its successes. Recommendations agreed upon and implemented made public would help put pressure on all stakeholders to continuously be involved and improve reform momentum. As a first step, the Committee could publicize its analysis of the implementation of its reforms from 2001.

Trade Logistics in Cameroon

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