As of the coming Ethiopian New Year, companies in the import and export business will be able to process and secure permits and pay duties and tariffs online, according to the Ethiopian Customs Commission.
Once fully operational, the system, along with Electronic Single Window Service (ESWS), will enable users to receive all services online instead of through the Commission's 17 branch offices.
With the existing system, companies in the import-export business were required to visit different government and financial institutions to collect supporting documents. In addition, they were required to send a representative to the Ministry of Trade & Industry, the National Bank of Ethiopia and other banks to obtain documents.
The new automated system enables the government institutions to upload the necessary approvals, letters and documents online where they will be approved or denied by the Commission. The entire process will only take two to three days.
As part of the implementation of the system, the Commission is training its staff, importers, exporters and officers from government agencies and banks virtually. The three weeks of training focuses on transit and warehouse service systems. Under the transit system, the trainees are coached on inward, outward, interior and route transit services. The warehouse service system training is related to analysing levels of risk and inspecting cargo.
The online system has eight matrix criteria to decide the risk level of imports and exports. The system then collects information, analyses it and assigns one of four colours to denote the level of risk - blue, green, red or yellow.
Freight labelled blue is unlikely to be risky and directly passes without any inspection. Freight with a green label needs some inspection, while red requires a physical inspection and must stay in a warehouse. Freight with the yellow label is identified as high risk and requires all types of documentation and inspection and stays for a longer amount of time than other colours.
As a start, the Commission is set to pilot the system in its five branches for a week at the end of this month. The Commission is also procuring and installing necessary equipment for the project.
The online system will be mandatory thereafter, according to Mule Abdisa, office chief of staff at the Commission.
"It'll be significant in terms of reducing time, cost and resources," sais Mule. "It'll also be instrumental in curbing corruption, saving time, lowering costs and reducing inefficiency."
The digitisation project aims at improving the country's low ease-of-doing-business ranking, according to Mule.
Last year, Ethiopia was ranked 159 out of 190 countries, according to the World Bank's 2019 Ease of Doing Business index.
The system will create a consistent system, an efficient tax collection system, and solve bottlenecks to the import-export trade, according to Mule.
As the problems in the sector are very complicated, online service provisions are not sufficient enough to solve the challenges, according to Kibret Abebe, founder and co-owner of the 12-year-old Tebita Ambulance Pre-Hospital Emergency Medical Service and board member of Addis Abeba Chamber of Commerce & Sectoral Associations.
The import and export sector is highly challenged by bureaucratic barriers and inefficiencies at the government offices, according to Kibret, who used to import medical supplies via a courier based in Dubai until Ethiopian Airlines took over the warehouse that was used by the service.
“The price of the gloves has exploded by 400pc since then,” he said. “When we want to import even medical gloves, we have to wait for a month."
Asressa Yohannes, general manager of the Ethiopian Pulses, Oilseeds, Spices Processors & Exporters Association, which has been lobbying for online and one window customs services for the past six years, says the system may alleviate their hurdles.
“Exporters had to wait for two to three days to get the export permit after they submitted all the necessary documents,” said Asressa.
Exports usually reached their final destination from two weeks to a month after the contracts were already signed, according to the general manager.
“This has been jeopardising the trading business of the country and resulting in contract cancellations due to delays," he said.
On top of the time being wasted, exporters have been exposed to higher costs because of logistical inefficiencies, according to Asressa.
“The new service can reduce the challenges and improve the logistics,” he said.
The project is crucial to making the trading system smooth and efficient, according to Social Beyene, IT expert and CEO at Dastech ICT Solution, adding that the system may reduce slowdowns and costs.
But the quality and coverage of infrastructure in the country is limited and may challenge the initiative of the Commission, according to Social.
“The Commission should prepare well not to add additional burdens to the import and export trading sector,” he recommended. “It should work in cooperation with IT infrastructure agencies such as Ethio telecom to properly operate the system.”
The Commission should also raise awareness among the trading business community about using the system, urged Social.
PUBLISHED ON Aug 29,2020 [ VOL 21 , NO 1061]
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