Landlocked countries can lower transit costs of transport by up to 30 per cent, if they replace paper-based customs forms with digital tools, a UNCTAD official has said.
Pedro Manuel Moreno, Deputy Secretary-General of UN Trade and Development (UNCTAD), says that digital technology is a blessing to the landlocked countries in terms of mitigating the cost challenges that they have always faced when importing from and exporting to overseas.
“The Northern Corridor in East Africa cut border-crossing times from Uganda to Kenya from three days to three hours,” he told a recent WTO’s 14th Ministerial Conference (MC14) in Yaounde, Cameroun.
Africa has 16 landlocked countries while worldwide the total of LLC’s are 44.
Moreno supported the ministers’ declaration in which the ministers called for a digital global corridor mapping dashboard to identify bottlenecks and guide investment. He said UNCTAD’s trade facilitation work, including on the implementation of the WTO Trade Facilitation Agreement, would contribute toward that goal.
“Landlocked developing countries’ (LLDCs) trade costs are the single greatest barrier to integration into the global economy. To lower those costs is to unlock growth. That is what this Ministerial conference must deliver,” the UNCTAD boss observed.
LLDCs face nearly twice the shipping costs and delays of transit countries. Four out of five depend on commodity exports, leaving them exposed to price swings they cannot control, the ministers noted.
Due to such challenges, their share of global services exports remains very low, precisely in the sectors – digital services, e-commerce, and professional work – where other economies are growing fastest.
“These are not abstract numbers. They translate into farmers who cannot reach regional markets, entrepreneurs whose goods lose competitiveness at every border crossing, and small firms that are locked out of the digital economy because the infrastructure is not there,” Moreno noted and continued to say:
“Compounding this, many LLDCs face mounting debt burdens that squeeze the very investments needed to reduce trade costs – forcing governments to choose between servicing creditors and building infrastructure.”
In response to that he said UNCTAD is operationalizing a Borrowers’ Platform – mandated by the Sevilla (in Spain) Commitment – to give debtor countries what creditors have long had: a permanent space for peer learning, technical capacity and a collective voice in sovereign debt discussions. This, he says, directly serves LLDC interests.
He said MC14 can actualize the roadmap to concretize priorities for multilateral trading system through such initiatives as the Awaza (Turkmenstan) Programme of Action.
Three top priorities include trade facilitation and transit whereby the LLDCs seems reforms in the procedures along borders to eliminate inefficiency; replacing paper-based customs forms with digital tools with view to lower costs by up to 30%; and a dedicated WTO work program for LLDCs.
To adopt e-commerce and develop digital services, land locked countries require digital infrastructure, legal frameworks and skills.
UNCTAD intervenes by conducting e-trade readiness assessments to help countries identify what they need, and extending its investment promotion programs to support the transition with special focus on small and medium enterprises.
The landlocked countries in Africa are: Botswana, Burkina Faso, Burundi, Central African Republic, Chad, Eswatini (formerly Swaziland), Ethiopia, Lesotho (enclave of South Africa), and Malawi. Others are Mali, Niger, Rwanda, South Sudan, Uganda, Zambia, and Zimbabwe.