NEW PROJECTS

Government of Mozambique and ICF announce partnership to improve business life cycles in tourism industry

ICF has recently approved a 12 month project with the Government of Mozambique to improve business life cycle services in the tourism industry. The project will streamline business registration and licensing procedures for tourism enterprises in five geographic locations identified by the Government as Tourism Investment Areas (TIAs), dramatically reducing the time and costs associated with doing business in the sector.

The project, in partnership with the Ministry of Tourism, will enable five existing one-stop-shops to become regional centres for licensing and registration services in the tourism industry. The one-stop-shops are currently based in Maputo, Cabo Delgado, Inhambane, Sofala and Gaza - areas rich in tourism activity and potential, ranging from hotels, tour operators and commercial activities such as craft markets, restaurants and diving centres.

The project will reduce the number of days involved in the registration and licensing of tourism businesses in Mozambique from 175 to 13 days for medium to large sized businesses, and 30 days to just one day for small businesses. Straightforward and timely business registration, licensing and closure procedures are crucial pre-requisites for a healthy investment climate.  The tourism industry in Mozambique has witnessed rapid growth in recent years - the number of international tourists visiting the country increased from 470,000 in 2004 to one million in 2008, and revenue from the sector has soared by 90%. By making business registration and licensing easier for tourism businesses, ICF hopes to build on this success by attracting increased domestic and foreign investment into the sector, making the Mozambique economy even more dynamic and globally competitive. The project is ICF’s first project in Mozambique and, when successful, will be extended to other licensing activities in the country.
 

ICF and Government of Senegal announce new projects to modernise customs authority and tax administration

Q4 saw ICF’s Board of Trustees approve funding for two new projects in partnership with the Government of Senegal, which will deliver further improvements to the country’s business environment. The first project will streamline the country’s tax administration system, generating significant time and cost savings for the private sector. A second project will modernise the Senegalese Customs Authority, greatly reducing the time and costs associated with the clearance and release of goods.

The new tax administration project will enhance the existing regulatory and administrative framework by automating and refining processes and digitalising tax records. Under the current system, it takes 175 days to reimburse corporate tax, 175 days to provide VAT credit refunds and two days to declare and pay taxes. By the end of 2010, with ICF support, it is expected to take 15 days for corporate tax reimbursements, 30 days for VAT refunds and just two days to declare and pay taxes, delivering significant time and cost benefits to businesses operating in the region.

The project to modernise the Senegalese Customs Authority is ICF’s third project to improve customs in Senegal and will build on the considerable improvements generated to date by the Government. In Senegal, there are three stages to clear goods for importing or exporting: pre-clearance; clearance and release of goods. ICF’s first project in Senegal reduced the time it takes to issue pre-clearance declarations from two days to just seven hours, the second project will render the clearance process entirely paperless and following the successful implementation of this third project, the entire Senegalese custom declaration system will be streamlined and automated.

The new project will refine and digitalise processes, and introduce electronic data exchange to the Customs Authority. Currently, it takes a total of 33 days to process the declaration and release of goods in the Port of Dakar. With ICF support, this is expected to be reduced to approximately five days, delivering significant improvements to local and international businesses trading in Senegal.
 

High level meeting of EAC officials in Tanzania results in recommendations to tackle trade and investment barriers

ICF recently hosted a high level meeting in partnership with the Customs Directorate of the East African Community Secretariat, resulting in a series of recommendations aimed at reducing congestion and trade barriers, especially along the region’s key transport corridors. Consultants hired by the East African Community Customs Union presented their suggestions in a report titled ‘An evaluation of the Implementation and Impact of the EAC Customs Union’.  Their recommendations included:

• Charging officials of the Ministries of Trade from all five member states with the responsibility of overseeing reported cases of Non Tariff Barriers (NTBs) and resolving any disagreements which may arise
• The formation of teams dedicated to dealing with day to day operational issues, which would permit the existing monitoring committees to focus solely on resolving structural issues that hinder cross-border trade.

The forum, held in Arusha nine weeks before the EAC Customs Union is fully introduced, brought together key political, business and government representatives committed to increasing the EAC’s investment potential by addressing obstacles to trade. With a particular focus on how the region can remove non-tariff based obstacles including: the duplication of paperwork systems and procedures to clear goods; excessive physical inspections; lack of harmonised management and IT systems; and poor quality physical infrastructure, the forum increased dialogue and commitments between EAC member countries.

Delegates heard that, while intra-EAC trade had grown 49% between 2005 and 2008, from $1.847 million to $2,715 million, the EAC’s share of world exports remains too low – standing at less than one tenth of all global exports. Congestion and delays along the region’s Northern (Mombasa-Kigali) and Central (Dar es Salaam-Kigali-Bujumbura) corridors, through which pass 80% of East Africa’s imports and exports worth approximately $560 billion per annum, make East Africa one of the most expensive parts of the world to ship goods with significant consequences for business and investors.

The Forum marks an important milestone in the EAC’s ongoing bid to increase the region’s economic prosperity and attractiveness as a global trading partner. The EAC must now build on the collaborative spirit fostered during the Forum to ensure the right solutions are identified and realised ahead of the introduction of the single Customs Union next year. The Forum represents the initial, preparatory phase of an ICF project that will last three years. The project’s other components include technical assistance to finalise the legislative framework for the Customs Union; development of a risk based customs management system to cut the amount of physical inspections; support for Burundi’s integration into the EAC; investment in IT; and investment in the actual infrastructure of the region’s customs processes.

ICF and FIAS support OHADA’s efforts to improve regional business law framework

ICF and the World Bank Group’s Investment Climate Advisory Services (FIAS) are working together to support OHADA (Organisation for Harmonisation of Business Law in Africa) in its effort to modernise the regional business law framework and to improve the effectiveness of its implementation.

OHADA’s Permanent Secretariat has initiated a review of the eight current “Uniform Acts” with the goal to modernise and adapt them to best international practices. The project’s first phase (September 2008-July 2009) consisted of a diagnostic assessment carried out by 30 international and local consultants. The strengths and weaknesses of six of the eight Uniform Acts were analysed, and based on the findings of the assessment, recommendations were made for their modernisation. Phase I is now complete.

The project’s second phase was launched last summer and will cover the coming 18 months. The goal of this phase is to support OHADA with the adoption of amendments to the Uniform Acts based on the recommendations made during the assessment phase.  Phase II includes the dissemination of diagnostic reports and discussion of recommendations with the local public and private partners in order to confirm and further develop a consensus on the principal recommendations; drafting of preliminary amendments in light of the “road map” provided by the expert recommendations; submission of the amendments for consideration to the representatives of the OHADA National Commission's (CNO) meeting in legislative review sessions (“assemblée plénière”), and to the Common Court of Justice and Arbitration (CCJA) for legal opinion and submission of the draft amendments by the Permanent Secretariat to the OHADA Council of Ministers for adoption. After publication in the Official Gazette, the amendments to the Uniform Acts will enter into force and will be directly applicable in all OHADA member countries.

With ICF and FIAS support, the first two amended laws have been drafted - the Uniform Act on General Commercial Law and the Uniform Act on Secured Transactions. The draft amendments comprise important changes including the introduction of new instruments but also the simplification and clarification of existing tools and procedures. The draft amendments are now in the hands of the member states and will be discussed by regional stakeholders (national OHADA commissions) in February 2010 and reviewed by the OHADA Council of Ministers for adoption in May 2010.