Uganda has the third best logistical environment for facilitating trade in Africa, a new World Bank report has shown. The report, titled, 'Connecting to Compete 2014: Trade Logistics in the Global Economy,' was launched in New York on March 20.
It ranks 160 countries on a number of dimensions of that facilitate trade - including customs performance, infrastructure quality, and timeliness of shipments - that have increasingly been recognized as important to economic development.
The data was compiled by the World Bank Group's International Trade Unit from a survey of more than 1,000 logistics professionals to produce the Logistics Performance Index (LPI) about every two years since 2007. The majority of respondents (44%) are involved in providing a range of logistics services as their main line of work. Such services include warehousing and distribution, customer-tailored logistics solutions, courier services, bulk or break bulk cargo transport, and less-thankfully container, full-container, or full-trailer load transport.
Now in its fourth edition, the LPI measures the on-the ground efficiency of trade supply chains, or logistics performance. When the LPI results across four editions (2007, 2010, 2012, and 2014) were aggregated, Uganda emerged 69th among 166 countries. Scores in the 2014 LPI were given a weight 53.3%, followed by 26.7% for 2012, 13.3% for 2010, and 6.7% for 2007.
This enabled the comparison of 166 countries. Kenya ((89), Rwanda (119), Tanzania (125) and Burundi (154) followed in that order. The performance of Uganda's Customs also ranks highest in the region in the 53rd position in the world, ahead of Burundi (123), Rwanda (126), Tanzania (136) and Kenya (152). Uganda also tops the regional rankings in being timely in logistics handling - sitting in the 50th position in the world, ahead of Kenya (70).
Paul Kyeyune, the Uganda Revenue Authority (URA) publicist, told The Independent in an interview on April 1 that they were not surprised by the findings about the performance of their Customs Department given the investment they have made to make it more efficient.
He said exporters and importers are reaping the fruits of the Customs Modernisation Project, which has been running since 2005. Phase I of the project ended in 2010 but the tax body launched another phase dubbed the 'Customs Enhancement Project' under the Managing Compliance Programme. This saw the launch of ASCUDA World, a versatile and web-based customs management system, as a replacement for the ASCUDA+++.
"This enables agents to clear their goods and make declarations online and enables them to track their goods without having to come to URA offices." Kyeyune said. The programme has been rolled out at the various border posts countrywide. Additionally, URA is implementing the Authorised Economic Operator (AEO), under which agents and logistics companies are certified so that they can get preferential treatment. Kyeyune said because of the success of Uganda's Customs department, URA has become a centre of excellence on the continent and they get many delegations from tax bodies across the continent to learn from their experience.
Good policies matter:
Indeed, the report says that since the first edition, the LPI has shown that good policies matter to develop efficient supply chains but also that many developing countries still lag behind. It says supply chain reliability is a major concern for traders and logistics providers alike.
In a global environment, consignees require more certainty about when and how deliveries will take place. This, it says, increases the demand for quality in logistics services, posing challenges for private agents and for governments, all of which face pressure to facilitate trade while safeguarding the public against criminal activity, health concerns, or terrorism threats.
"Comprehensive reforms and long-term commitments from policymakers and private stakeholders will be essential," the report notes. These reforms will lead to lower costs of doing business and eventually to lower prices for the final consumer.
Jean-François Arvis, senior transport economist and the founder of the LPI project, said the LPI is trying to capture a rather complex reality - the various attributes of the supply chain. "In countries with high logistics costs, it is often not the distance between trading partners, but reliability of the supply chain that is the most important contributor to those costs," he said.
Even more important, many critical elements of good logistics--such as process transparency and service quality, predictability, and reliability--cannot be assessed using only time and cost information.
Even in this year's report the low income countries have scored poorly on road and freight services despite having given them more policy attention recently. The report says improving logistics performance is at the core of the economic growth and competitiveness agenda and policymakers globally recognize the logistics sector as one of their key pillars for development.
In the report it is stated that the divide between services and infrastructure quality is wider in air and marine transport. The LPI measures logistics efficiency, now widely recognized as vital for trade and growth and a country's ability to trade globally depends on its traders access to global freight logistics networks.