Modernisation of trade to cut time and cost for business
Madagascar is anticipating tangible improvements to how trade is conducted following the successful completion of two targeted initiatives designed to modernise export and import processes.
At an official launch to mark the on-time conclusion of both projects, key stakeholders from the public and private sectors who had collaborated in their implementation gathered to celebrate the occasion.
Working in conjunction with the country’s National Trade Facilitation Committee, the Global Alliance for Trade Facilitation (the Alliance) has been engaging Government and businesses on both projects since March 2021, digitalising and upgrading procedures to make trade simpler, faster, and cost-effectively.
The first of these projects involved supporting Madagascar to modernise from a manual phytosanitary certification process to an electronic, or ePhyto, alternative by linking into the International Plant Protection Convention (IPPC) ePhyto Hub.
Traders will now be able to exchange ePhytos with dozens of participating countries, replacing the current paper-based system confirming that agricultural exports and imports are free of pests and disease.
Paper certificates can take days to obtain and are prone to errors, loss, and counterfeiting. Also, if the port of entry requires any modification or refuses to approve the shipment based on the paperwork provided, the original physical documents must be returned to Madagascar for amendments.
Working alongside the Plant Protection Directorate of the Ministry of Agriculture and Livestock, and local and international agri-food companies, the project was completed on schedule, with almost 200 ePhyto exchanges taking place since May 2022.
The anticipated time and cost savings resulting from both projects are expected to have a significant impact in Madagascar, where agriculture accounts for more than 25% of GDP, around 70% of export earnings and employs around 80% of the population.
In parallel, the Alliance has been supporting Malagasy Customs in introducing a system of advance rulings on tariff classification and customs origin.
Traders will now be able to request an advance ruling on how their exports and imports will be regulated, safe in the knowledge that the legal opinion provided will be binding, uniformly applied by Customs and valid for one year.
The advance ruling mechanism gives companies the confidence to conduct trade with a clear legal opinion covering their goods before they ship, reducing the chance of disputes at Customs.
Both projects contribute to Madagascar fulfilling its commitments under the World Trade Organization’s Trade Facilitation Agreement, which requires countries to expedite the movement, release, and clearance of goods.
The Alliance will continue to engage with the public and private sectors in Madagascar to measure the impact of these reforms on the time and cost of trade.
“This is a big step – a big revolution,” said Saholy Nomenjanahary Ramiliarijaona, Head of Plant Protection. “Sanitary and Phytosanitary inspectors are already seeing a spectacular change, especially in the way that their work has moved from an archaic process of manual certification into the digital age.”
“There is no denying that reducing customs clearance times and making cross-border trade more fluid has a positive impact on the competitiveness of our operators and directly influences local consumer prices,” said Ernest Lainkana Zafivanona, Director General of Madagascar Customs. “In just a few years, we have already reduced customs clearance times, but this process still takes days as opposed to hours. The launch of the Advance Ruling mechanism, thanks to the support of the Alliance, demonstrates our administration’s ambition to create a better international trade environment for Madagascar. “
“Madagascar has taken a giant stride forward in making trade for Malagasy businesses faster, easier and less costly,” said Valerie Picard, Deputy Director of the Global Alliance for Trade Facilitation. “The Alliance is very proud to have assisted Customs and the Ministry of Agriculture and Livestock in successfully implementing these two projects. We hope they will pave the way for more collaboration in the near future.”