Tuesday, June 2, 2009

Institutional Arrangements for Transport Corridor Management in Sub-Saharan Africa

October 23, 2007 - SSATP Working Paper No. 86

Corridor efficiency is important to the competitiveness of most African economies, especially those that are landlocked. Corridors can be defined as a collection of routes linking several economic centers, countries and ports. While some are only road transport corridors, most of them include more than one mode of transport.

The SSATP places emphasis on the facilitation of inter-State trade along corridors. It particularly focuses on identifying impediments to the efficient movement of traffic and seeks to promote appropriate strategies for minimizing hurdles to such movement. This objective is also consistent with the Millennium Development Goals (MDGs) and the Almaty Plan of Action.

Some of the contributory factors to the problems faced along corridors can be traced to the absence of appropriate institutions able to coordinate, in a proactive manner, interventions to remove obstacles to movement. Corridors with corridor management institutions have sometimes shown significant improvements in their operations. The institutions have been instrumental in facilitating dialogue between corridor stakeholders and harmonizing procedures and documentation used in transport and transit operations along the corridor, resulting in reduced transit time and cost.

This concept paper reviews the legal and institutional options for establishing corridor management groups and proposes a framework for establishing such groups along all major transport corridors.

If the reasons for establishing corridor institutions are generally similar, the manner in which the existing institutions were established was not uniform. Examples of legal instruments include treaties (Northern Corridor), multilateral agreements (Central Corridor), Memoranda of understanding (Trans Kalahari), Constitutions (Dar as Salaam) and company registration (Maputo). The instrument chosen has been influenced by the key drivers behind the establishment of the institution. Still, all the corridor management arrangements demonstrate the value of involving all stakeholders, both from the public and private sectors.

Some of the lessons have emerged from the existing corridor management arrangements:

i) Corridor groups interventions are problem solving and the operational procedures should encourage this objective and retain flexibility necessary to be responsive.

ii) Working groups can be formed on an ad hoc basis to address specific issues and disbanded once the objective met.

iii) Corridor issues by their nature are often solved by interactions between many public entities and participatory processes should be fostered.

iv) Ownership and power sharing should be encouraged by the organizational design and operating procedures.

v) The group organization should ensure public-private interaction at all levels.

vi) Most existing arrangements have been established with donor funding and their financial sustainability has remained a key challenge.

vii) In the end, tailoring the arrangement to the corridor context will be needed if ownership is to be secured.

A three-tier corridor management institution is proposed for regional transport corridors without any arrangement. The institutional hierarchy would comprise a stakeholders group, a core group and a secretariat.

A stakeholders group is proposed as the preferred option for the key consultative body. It would comprise representatives of customs, immigration, transport and logistics operators, rail and road agencies, port authorities, transport regulation and road safety agencies, ministries of health for each State and regional level institutions. The second tier would be an executive group made up of members nominated to represent specific constituencies as the main operational group. The core group can also establish such working groups as may be required to address specific issues. The stakeholders group and the core group would be supported by a secretariat - the main coordinating and technical body of a corridor group. A three member team of core staff is proposed as the minimum for a functional secretariat.

The funding of any proposed corridor management institution is an aspect that has to be carefully considered. Funding arrangements for existing corridor groups include membership fees, contributions by governments, traffic-based usage fees, or donor support. The sustainability of most corridor institutions is a challenge, though the traffic-based usage fee arrangement seems to be the most appropriate as it also places demands to deliver benefits to the shippers who ultimately meet the costs. It is envisaged that in the first instance membership contributions or donor funding would be necessary to establish a group.

Generally, the funding mechanism of a corridor group would be influenced by its legal instrument. Once established, the group would be able to develop an action plan and deliver some results making it possible to introduce a usage-based funding mechanism such as a tonnage levy. A usage fee would maintain pressure on the core group and the secretariat to deliver tangible benefits for corridor stakeholders to justify its funding. If it is introduced, the usage fee mode of collection must be simple to administer.

Corridor management arrangements should be designed to advocate modernization of border agencies, in particular Customs administrations. Focus could be on those aspects that negatively impact corridor efficiency such as institutional reforms, simplification of procedures, while promoting improvement in training and investment to upgrade information technology and border crossing facilities.