Dakar-Bamako Corridor Cost of Transport Analysis PCE... · Dakar-Bamako Corridor Cost of Transport Analysis Prepared for USAID Senegal ... Today, only about 20% of Mali-bound freight

USAID Dakar – Bamako Cost of Transport Analysis

1

Dakar-BamakoCorridor

CostofTransportAnalysis

Prepared for USAID Senegal

by Booz Allen Hamilton

September 3, 2010


2

Contents

Executive Summary ....................................................................................................................................... 4

Introduction .................................................................................................................................................. 8

Methodology ............................................................................................................................................... 10

Corridor Overview ....................................................................................................................................... 11

Recent Developments and Achievements .................................................................................................. 34

Costs of Transport ....................................................................................................................................... 42

Challenges ................................................................................................................................................... 54

Recommendations ...................................................................................................................................... 60

Appendix A: Acronyms ................................................................................................................................ 68

Appendix B: Policy, Legal and Regulatory Framework ................................................................................ 69

Appendix C: International Trade Statistics for Senegal and Mali ............................................................... 75

Appendix D: Interviews ............................................................................................................................... 81

Appendix E: Other Sources ......................................................................................................................... 82


3

Table of Figures

Figure 1 Map of the Dakar - Bamako Transport Corridor ........................................................................... 11

Figure 2 Port of Dakar Traffic ...................................................................................................................... 14

Figure 3 Total Mali Export Traffic by Mode of Transport ........................................................................... 16

Figure 4 Total Traffic to Bamako ................................................................................................................. 18

Figure 5 Total Traffic along the Dakar-Bamako Corridor ............................................................................ 18

Figure 6 Total Traffic from Bamako ............................................................................................................ 19

Figure 7 Traffic of Agricultural Products Along the Dakar-Bamako Corridor by Volume ........................... 21

Figure 8 Traffic of Agricultural Products Along the Dakar - Bamako Corridor, by Month by Volume ........ 22

Figure 9 Overall Logistics Performance Index ............................................................................................. 40

Figure 10 Logistics Performance Index (International Portion) .................................................................. 41

Figure 11 Transportation Costs - Rice Import into Senegal ........................................................................ 44

Figure 12 Transportation Costs - Rice Transits to Mali ............................................................................... 46

Figure 13 Transportation Costs - Cotton Exports from Mali ....................................................................... 49

Figure 14 Improvement Opportunities Framework.................................................................................... 60

Figure 16 Top Ten Products Imported by Mali ........................................................................................... 76

Figure 15 Total Mali Imports (by value) ...................................................................................................... 83

Figure 18 Top Ten Products Imported by Senegal ...................................................................................... 77

Figure 17 Total Senegal Imports (by value) ................................................................................................ 83

Figure 20 Top Ten Products Exported by Mali (by value) ........................................................................... 78

Figure 19 Total Mali Exports (by value) ...................................................................................................... 83

Figure 22 Top Ten Products Exported by Senegal (by value)...................................................................... 79

Figure 21 Total Senegal Exports (by value) ................................................................................................. 83

Figure 23 Exports of Cereals from Senegal to Mali ..................................................................................... 80


4

Executive Summary

The Government of Senegal’s (GoS) overarching 20 year plan for the development of agriculture

recognizes the importance of improved logistics. Trade and transport corridor development, particularly

along the Dakar-Bamako corridor, is increasingly being seen by the GoS as a matter of strategic national

importance. Although regional trade is increasing, Senegal is seeing the volume of transshipments

through its port and border points with Mali, one of its principal regional trade partners, steadily

decline. The GoS is therefore actively pursuing practical measures to reduce obstacles to expanding the

volume of trade passing along the corridor. The USAID Economic Growth Project (PCE)’s work on the

corridor supports the government’s trade policy objectives of improving the competitive position of

Senegal as a key transport artery in West Africa, particularly as it regards staple foods and cash crops.

The purpose of this report is to contribute towards the development of a baseline of transport cost

along the corridor Dakar-Bamako, and guide PCE leadership and the GoS in defining policy/regulatory,

physical, and management measures to develop and reduce costs of operation along the Dakar-Bamako

corridor. This report summarizes the results of the analysis of the cost of transport along the corridor,

which used three supply chains – imports of rice into Senegal and Mali, and exports of cotton from Mali

– to a) evaluate current traffic on the corridor; and b) evaluate the cost of transport along the corridor.

Rice and cotton were determined to be the main agricultural products moving along the corridor, and

therefore of the most relevance to USAID’s PCE project.

Senegal is strategically located and has reasonably well-functioning transport networks. The Port of

Dakar serves as the anchor for the corridor, and has a comparative advantage over other regional ports

in that it offers the only rail connection to Bamako, in addition to (soon-to-be) two roads. The GoS,

recognizing its potential to develop as a trade and transport hub in West Africa, has been heavily

promoting investment in and around Dakar: an agreement with Dubai Ports World to operate and

expand the container terminal, a Logistics Platform, and the planned development of a free zone

connected to the port via a new tollroad are among the high-profile projects. The GoS has invested in

other trade and transport related reforms in recent years, with impressive results: its Doing

Business/Trading Across Borders rank rose from 64 to 57; its Logistics Performance Indicator rank rose

from 101 to 58. Ongoing Customs projects on paperless processing, electronic filing and payment, and

electronic tracking promise improvements of transport along the corridor, if fully implemented.

Eighty percent of all Mali-bound traffic moves along the corridor by road. Since the trucking industry in

Senegal is dominated by a large number of very small operators, who own and operate an obsolete

trucking fleet, most of the traffic (≈90%) to Mali is carried on Malian trucks. Rail used to play a much

more important role in transport along the corridor. However, management missteps and lack of

investment have greatly deteriorated rail infrastructure, reducing its capacity and reliability, and thus its

share of Malian traffic. Today, only about 20% of Mali-bound freight is moved by rail. For outbound

traffic, however, rail is still the predominant mode of transport.

Trade along the corridor has been steadily growing in the last five years. Although 2009 saw a decline in

the volume of ocean traffic at the Port of Dakar (both for imports to and exports from Senegal and Mali),


5

traffic along the corridor showed a modest increase due to an increase in bilateral trade, and in

particular exports from Senegal to Mali. Of all the inbound freight shipments to Mali from overseas, rice

comprises 10%, and is the only agricultural product of significant volume transported towards Bamako.

Outbound freight movements are dominated by cotton exports from Mali to overseas partners (86% of

all exports through Senegal), which have suffered a steady decline in recent years.

Trade in rice is significant, especially imports to Senegal. In 2008, Senegal imported $646M of rice (est.

750,000 tons), while the same year Mali imported $66M (est. 71,000 tons). The recent rice and

international financial crises have affected the imports of rice, which saw substantial increases in 2008

and, for Senegal, a significant decrease in 2009. 80% of rice shipments travel the corridor by road,

mostly in bulk or break-bulk, although premium rice shipments are containerized. Most rice imports are

characterized by large, infrequent shipments that are stored in bonded warehouses around Dakar,

where wholesalers buy the commodity in smaller quantities, and generally transport it using their own

trucking fleets. Senegal exports a small quantity of rice to Mali (about 1% of the total by weight). Trade

in cotton, although declining in the last five years, is the main outbound activity along the corridor. In

2008, Mali exported over $205M of cotton (39,368 tons). Cotton is mainly transported by rail (about

95%), where it is stored at a warehouse owned and operated by the GoM. Since most cotton is not sold

until after arrival in Dakar, it is transported in bulk and only containerized when it is sold.

Perceptions of transport and logistics costs among the trade community were generally favorable, with

a few exceptions: a) Port fees are considered excessive, especially for containerized cargo, especially for

Senegalese imports; b) Storage fees are considered high, and are attributed to insufficient capacity; c)

Delays for transport by road, due to harassment along the corridor and at the border are considered

high, with informal costs amounting to up to 5% of the total transport costs; d) Rail is too unreliable and

perceived to be biggest lost opportunity, and e) certain costs associated with road transport – Customs

escorts and guarantee costs for transit shipments – are high. The costs are summarized in the Table ES 1.

Senegal’s challenges with regard to trade and transportation in general, and along the Dakar-Bamako

corridor in particular, are in the areas of policy, infrastructure, logistics industry services, border

management, enforcement and integrity, and commitment and implementation capacity. The GoS lacks

an overarching sector-wide transport and logistics strategy, relying instead on a point-solution approach

to transportation capacity planning. The proliferation of ongoing programs, projects and initiatives

underscores the fact that the country’s leaders recognize that transportation is a priority, however it

also suggests that transportation capacity planning is more tactical than strategic. Senegal faces

continued infrastructure capacity challenges, in particular with rail, rural (feeder) roads linking

production facilities to main transport arteries, an obsolete trucking fleet, and logistics support

infrastructure such as storage and warehousing, in particular outside Dakar and close to the production

sites that need them most. Senegal is in the early stages of developing a transport and logistics “culture”

of understanding how its domestic transport and logistics markets operate in a global supply chain

context, and therefore needs to increase its competitiveness and professionalism. Moreover, continued

Customs reforms are dependent upon the successful implementation of a wide range of ongoing

projects, which will require firm commitment, coordination and change management efforts. Senegal


6

also continues to experience enforcement challenges, in particular with control points along the

corridor, WAEMU axle-weight limits, and the Inter-state Road Transit (TRIE) agreement. Finally, the

country does not have a very good record for long-term commitment and follow-through, and

implementation of its many projects and initiatives often proves to be a challenge.

Senegal’s recent successes in trade and transport reform and investment should be a model for

continued growth to address remaining challenges. Recommendations can be summarized as follows:

Policy - Develop a comprehensive transport and logistics sector strategy and a related strategic plan that

are holistic and integrated.

Commitment and Implementation Capacity - develop a Program Management Office (PMO) mechanism

to oversee the implementation of the transport and logistics sector strategy. The PMO would be ensure

that all of Senegal’s reform initiatives achieve the desired results in a coordinated manner.

Infrastructure

� Rail – improve the freight rail network, specifically in terms of capacity and reliability.

� Roads – invest in building rural and feeder road links from production sites to freight networks

� Logistics Support Structures – encourage construction of logistics support structures such as

warehouses, consolidation facilities, or other specialized storage facilities (e.g. refrigerated or

cooling storage facilities), especially those serving production sites

� Border Infrastructure – construct a parking lot for trucks at the Kidira-Diboli border and provide

computer infrastructure for border port in Kidira

Services - increase the competitiveness of the transport and logistics sector and in particular the road

transportation industry, through activities such as improving business formation and operations,

develop policies to encourage trucking industry operators to renew trucking fleets, and promoting the

continued use of information and communication technologies (ICT).

Border Management - ensure that current Customs initiatives achieve desired results and conform to

international best practices

� An independent review of Customs reform efforts, to ensure that projects such as Gainde 2010

and electronic cargo tracking meet requirements and are fully implemented at all border posts

� Aim to reduce inspections at the Port of Dakar to less than 10% of all imports

� Align the working hours of the Mali and Senegal Customs offices at the border

� Facilitate private sector consultation and policy/regulatory impact analysis

� Ensure conformance with international standards on automation, trade facilitation, and security

� Fully implement the provisions of the TRIE agreement

Enforcement and Integrity - strengthen the enforcement and corruption fighting capacity of the GoS,

eliminate Customs escorts for transit shipments, and enforce the reduced number of checkpoints along

the corridor.


7

Table ES 1 Summary of Transport Costs


8

Introduction

Background

Senegal’s agriculture sector, which is among the most important sectors of the nation’s economy,

contributes to about 15% to GDP and employs just over 50% of the labor force. However, because it is

vulnerable to fluctuating seasonal conditions, food security continues to be an issue, and Senegal heavily

relies on imports, especially of staple crops such as cereals. This reliance on imports exposes Senegal to

rising food prices on the global market, such as the fluctuations in the global prices of rice in recent

years. In response, the Government of Senegal (GoS) has focused on increasing production of key

agricultural product, through the launch of the Great Agricultural Offensive for Food and Abundance

(GOANA)1, which aims to raise food production and reduce imports, especially for grain, cereal, meat

and milk production. Gradually, the sector overall is beginning to take on emerging opportunities both

domestically and internationally, including in related sectors such as transportation and logistics.

The GoS’s overarching 20 year plan for the development of agriculture recognizes the importance of

improved logistics targeting the development of a national marketing infrastructure as key to lowering

unit costs of moving goods from farms to consumers whether domestic, regional or international. In this

context, trading infrastructure is defined as more than physical roads and bridges, ports, and airports

and includes “soft” infrastructure related to information, management, communication, and

policy/regulatory environment.

Trade and transport corridor development, particularly along the Dakar-Bamako axe, is increasingly

being seen by the Government of Senegal as a matter of strategic national importance. Whereas fifteen

to twenty years ago, Senegal was much more at the center of regional trade patterns, it is increasingly

finding both its terms of trade and its position as a trade facilitator and service provider diminishing

substantially, as witnessed by a trade deficit of 1.2 billion FCFA2 in 2007. Although regional trade is

increasing, particularly within the WAEMU3 zone, Senegal is seeing the volume of transshipments

through its port and border points with Mali, one of its principal regional trade partners, steadily

decline. Moving forward, the GoS is keen on having Mali as a key “client” in regional trade expansion:

Mali is a major destination for Senegalese exports, comprising 23.8% of exports in 2008, an increase of

156% in the 2004-2008 period, although imports from Mali remain low, at 0.01% in 2008 (Source: ANSD,

National Agency of statistics and demographics). Senegal is therefore actively pursuing practical

measures to reduce obstacles to expanding the volume of trade passing along the corridor.

The Economic Growth Project (PCE)4 seeks to increase agricultural production as a means to enhancing

food security. PCE’s work on the Dakar-Bamako corridor supports the government’s trade policy

objectives of improving the competitive position of Senegal as a key transport artery in West African

trade, particularly as it regards staple foods and cash crops. The corridor is presently regarded as one of

1 Grande Offensive Pour la Nourriture et l’Abondance

2 Franc CFA

3 West African Economic and Monetary Union (see Appendix B)

4 Projet Croissance Economique


9

the worst in the region, particularly in terms of the number of control posts, delays, and police

harassment related to arbitrary inspections and demands for bribes. PCE’s focus will be on developing a

baseline and working knowledge of the transport cost structure along the Dakar-Bamako corridor

covering conventional costs as well as governance issues (i.e. costs associated with control posts and

check points).

Purpose and objectives

The purpose of this report is to contribute towards the development of a baseline of transport cost

along the corridor Dakar-Bamako, and guide PCE leadership in concert with Senegal’s transport

authorities in defining short-term (6 months), mid-term (7 to 24 months) and long-term (25 – 60

months) actions of a policy/regulatory, physical, and management nature to develop and reduce costs

of operation along the Dakar-Bamako corridor.

Specifically, the objectives of this report are to:

� Evaluate current traffic on the corridor

� Evaluate the cost of transport along the corridor


10

Methodology

The author of this report conducted interviews with various public and private stakeholders that

conduct trade and transport activities along the transport corridor. Stakeholders interviewed included

government agencies (mainly from Senegal but also from Mali), transporters, freight forwarding agents,

representatives of shipping lines, shippers’ councils, business associations and private importers (within

Senegal)5. The author also reviewed reports and other documentation related to the key trade and

transport initiatives and other relevant documents, statistics, and publications. The list of organizations

interviewed can be found in Appendix D.

Through the stakeholder interviews, the author collected average values for formal costs (official fees

and legitimate charges for handling and transport) and informal costs such as bribes, as well as the

delays taken for various steps along the process. The author collected data on each of these cost

categories for three different import, transit and export scenarios, for two commodities of importance

to the PCE project – rice and cotton, for two different handling modes (containerized and bulk), and two

different modes of inland transport (road and rail). The Dakar Port Authority provided statistics and

other information on the Dakar port, while EMASE6 provided statistics on transit traffic to and from Mali

through the Port of Dakar. The study also benefited from other studies conducted by USAID/West Africa

Trade Hub projects, and the World Bank. The answers to questions sometimes varied, and were not

always complete; therefore, the author selected the most representative responses for use in the cost

model and standardized the units of analysis to standard 20-foot containers and to metric tons (t). In

some cases, the author was able to obtain only one valid data point, rendering averaging impossible.

While much of the cost data in this report may be of limited statistical significance, this does not

diminish its importance in creating a baseline for future studies.

Because rice and cotton were determined to be the main (indeed, highly predominant) agricultural

products moving along the corridor (rice in an inbound direction and cotton in an outbound direction),

they were selected for the representative supply chains. Because the volume of other agricultural

products of interest to the PCE was minimal in relation to the volume of rice and cotton, the study was

limited to two commodities.

5 Efforts were made to include representation from Mali, however, response rates were low.

6 Entrepots Maliens au Senegal


11

Corridor Overview

Senegal is strategically located and has fairly well-functioning transport networks capturing road, rail,

marine, and air modes, which serve the Dakar – Bamako corridor. Figure 1 shows the Dakar-Bamako

corridor, and Table 1 summarizes the characteristics of the corridor’s four main modes of transport.

Figure 1 Map of the Dakar - Bamako Transport Corridor

Mode of Transport Characteristics

Marine

� The main anchor for the Dakar – Bamako transport corridor � Port of Dakar is the first port of call for southbound ships � Its location allows round-the clock access � Recent investments by Dubai Ports World have increased efficiencies

in ships’ handing, waiting time at anchorage, and truck turn-around times

� Port of Dakar has approximately 550,000 TEU7 capacity (planned capacity at 1.5M TEU)

� Direct rail and road links from Port of Dakar

Road

� One major road linking Dakar and Bamako, Kidira-Diboli � Road links to Mali built at Kedougou – Saraya & Saraya – Faleme � Construction of toll road to link Dakar city to Diass airport (about 40

km) and a planned free zone (Diamniadio Integrated Special Economic Zone)

� Unfortunately, an ECOWAS initiative to implement an international road transit regime, the Interstate Road Transit (TRIE) agreement, has not been achieved, complicating transit procedures and increasing transit costs

Rail � Rail corridor (Dakar-Tambacounda-Kayes-Kita-Bamako, 1,240 km) is

the only regional rail connection to Bamako

7 TEU stands for Twenty-foot Equivalent Unit, in reference to standard measure for ocean shipping container size

#

Senegal

#

MaliDakar

Bamako

#Kidira


12

Mode of Transport Characteristics

� Rail connections at the Port of Dakar, EMASE, and at the newly-built Logistics Platform; however, only direct Dakar-Bamako transportation is currently operational (i.e. rail is not used for domestic freight transport)

� The advantages of rail transport include simplified customs procedures, adapted from the International Convention to Facilitate the Crossing of Frontiers for Goods Carried by Rail (TIF)

� There are no customs and police inspections en route. Customs procedures have been simplified, and they are based on a single transit document, the Transit International Ferroviaire (TIF) document, which accompanies goods from Dakar to Bamako and replaces Senegalese and Malian national customs documents and procedures, thereby simplifying customs and administrative formalities and reducing the cost and delays.

� The implementation of an international customs transit regime on the rail corridor between Bamako and Dakar has greatly facilitated train movement between Senegal and Mali, unlike its less-than-ideal road equivalent, the TRIE.

Air

So far, air is not identified as a node in the Dakar-Bamako transport corridor. However, as many of Mali’s exports appear to be low-volume, high-value goods, this may become an increasingly important component.

� Construction of Ndiass airport, increasing capacity to 2000 ha � Infrastructure support through a toll road and a free zone � Important link for perishables and high-value, low-volume goods

Table 1 Dakar - Bamako Corridor Modes of Transport

Mali, as a landlocked country, has access to multiple regional ports. Therefore, Senegal must improve

the quality, speed, reliability, and cost-competitiveness of its transport network in order to advance its

strategic partnership with Mali. Senegal has a clear comparative advantage in the region, which it can

capitalize upon to develop itself as a trade and transport hub in West Africa, and in particular with Mali.

Country Port Distance to Bamako Characteristics

Senegal Dakar Existing road - 1,400 km New road - 1,200 km

� Direct rail link � 2 road links � First port of call for southbound ships � Last port of call for northbound ships

Cote d’Ivoire Abidjan 1,100 km � 1 road link � Transits require military convoys

Ghana Tema 1,600 km � 1 road link � 2 border crossings

Guinea Conakry < 1,000 km � 1 road link � Transit duties of 2.5%

Togo Lome 1,700 km � 1 road link � 2 border crossings

Table 2 Regional Competitive Positioning


13

Port Overview

The Port of Dakar has one of the largest deep-water seaports along the West African coast. It has an

advantage over other West African ports because of its deep-draft structure and 640 foot-wide access

channel which allows round-the-clock access to the port. Its strategic location at the extreme western

point of Africa and at the crossroad of the major sea lanes linking Europe to South America and North

America to South Africa makes it a natural port of call for shipping companies.

The Port Autonome de Dakar (PAD), as the port authority for the Port of Dakar, is pursuing ambitious

modernization plans in order to make the Port of Dakar a primary shipping hub for West Africa. The

modernization and extension of the existing port constitute the backbone for the “Port of the Future”

project. In 2007, the GoS signed an agreement with Dubai Ports World (DPW) to develop and run the

port’s busiest container facility. DPW has been operating the container terminal in the Northern zone

since 2008, and handles approximately 85% of container ship traffic at the port. DPW has implemented

many improvements to operations at the port, installing equipment, information and communications

technologies (ICT), and new processes.

The Port of Dakar is divided into two main zones. The Northern zone covers the jetties N°4, N°5, N°8, the

container terminal and the petroleum wharf. The southern zone covers jetties N°1, 2 and 3 and is

dedicated to general cargo, transit cargo for Mali, passenger and vehicle traffic. Less than 20% of the


14

containerized traffic passes through the Southern zone, which is equipped with 15 mooring berths. A

22.9ha area of is being renovated and extended.

The Port of Dakar was visited by

2,406 vessels in 2007, including

786 container ships, 443 cargo

vessels, 339 carriers, 290 tankers,

245 fishing vessels, 41 ore

tankers, and 22 cruise ships.8

In terms of freight, traffic at the

Port of Dakar has fluctuated over

the last several years, with the

latest decrease occurring in 2009

and widely attributed to the

ongoing international financial

crisis. The Port of Dakar has seen

an overall decrease in traffic of

13% from 2008 to 2009, with a

9% decrease in incoming traffic,

and 24% decrease in outbound

traffic. By far, the hardest hit

areas include exports from

Senegal (down 29%) and

outbound transits from Mali

(down 36%), while the fish

industry seems to be the

strongest (with a 15% increase in

inbound traffic and a 10%

increase in outbound traffic). Figure 2 depicts the evolution of port traffic at the Port of Dakar (Source:

Port Autonome de Dakar). Imports represent traffic destined for import into Senegal; exports represents

traffic exported from Dakar; transits represents all traffic that passes in transit through Senegal but is

either imported or exported by a third country. Of all transits, by far the largest share belongs to Mali –

the volumes represented in the graph comprise both transit shipments to and from Mali (in other

words, both imports and exports, except imports to and exports from Senegal). The countries in the

“Transits-Other” category include Mauritania, Gambia, Guinea, Guinea-Bissau, Burkina Faso, and Niger.

Road Transport

Road transport along the corridor is mainly along the Dakar-Kaolack-Tambacounda-Kidira-Kayes-Bamako

axis, with approximately 80% of all cargo moving to Mali using this transport artery. The trucking

8 Source: World Port Source

0

1,000,000

2,000,000

3,000,000

4,000,000

5,000,000

6,000,000

7,000,000

2006 2007 2008 2009

ton

s

Import

Export

Transits - Mali

Transits - Other

Transshipments

Fish

Figure 2 Port of Dakar Traffic


15

industry in Senegal is dominated by a large number of very small operators, who rarely own and operate

more than a few trucks, and a half a dozen subsidiaries of large multinational carriers or logistics

providers (e.g. Maersk). With the exception of the fleets owned and operated by large multinational

companies, the Senegalese trucking fleet is obsolete, and most of the traffic to Mali is carried on Malian

trucks (by some accounts, close to 90% of all Mali traffic). Mali has only recently upgraded its trucking

fleet and has a large capacity to make the long trip from Dakar to Bamako.

If the Senegalese fleet were to be upgraded and become competitive with the Malian fleet, there is still

a cargo sharing agreement between Senegal and Mali which stipulates that 2/3 of all Malian traffic is to

be transported by Malian trucks (see Appendix B).

Road transport has

picked up pace so much

over the last decade that

volumes are reportedly

on the order of 300

trucks/day at the border

between Senegal and

Mali. It is therefore very

timely that Senegal is

working on completing a

new Southern corridor

linking Dakar to Bamako.

The road, linking

Kedougou to Saraya, and

Saraya to Faleme and the

border with Mali, will not

only shorten the corridor by 180 km, but will also expand capacity for road transport between the two

countries.

Rail Transport

Where in the past an estimated 80% of all cargo moving along the Dakar-Bamako corridor was by rail,

the rail network’s deteriorating state has reduced this to 20%. In 2003, Mali and Senegal privatized

international traffic on the Dakar-Bamako railway, the management of the new entity being assumed by

the Transrail consortium. Since then, mismanagement has led to Transrail not complying with the

conditions of its operating contract, which required Transrail to develop an investment plan for

maintenance and repairs along the corridor. The lack of investment, however, has caused severe

deterioration of the rail infrastructure, equipment shortages, and frequent accidents, resulting in poor

service and reliability for cargo shipments, and forcing traders and forwarding agents to choose road for

time-sensitive shipments.

0

200,000

400,000

600,000

800,000

1,000,000

1,200,000

1,400,000

1,600,000

2006 2007 2008 2009

Imports by rail

Imports by road

Table 3 Total Mali Import Traffic by Mode of Transport


16

Figures 3 and 4 show the breakdown of cargo transported by road versus rail. Figure 3 includes imports

from Senegal, as well as inbound merchandise arriving by ocean at the Port of Dakar and moving in

transit through Senegal. (Source: EMASE)

Figure 3 Total Mali Export Traffic by Mode of Transport

Figure 3 includes exports to Senegal (including livestock), as well as outbound merchandise departing by

ocean at the Port of Dakar and moving in transit through Senegal. The steep decrease in outbound

traffic is due to a large drop in exports of cotton (most of which are moved by rail). (Source: EMASE)

Trade Volumes along the Dakar-Bamako Corridor

This section focuses on the volumes of goods transported along the corridor. Official overall

international trade statistics, as reported through the International Trade Centre, a joint agency of the

World Trade Organization and the United Nations, can be found in Appendix C. The information

compiled in this section has been obtained through various channels:

• International Trade Center

• Malian Warehouses in Senegal (Entrepots Malien au Senegal (EMASE))

• Official website and direct communication with the Port Autonome de Dakar

• Senegalese Shippers’ Council (Conseil Senegalais de Chargeurs (COSEC))

• Statistics and direct communication with Senegal Customs

There are two perspectives in approaching the Dakar-Bamako corridor trade flows: from a port

perspective, and from the landlocked country’s perspective. Port transit traffic refers to direct trade

between the landlocked country – Mali – and its overseas partners. However, the corridor trade flows

also include bilateral trade with the coastal country – Senegal – which may or may not be linked to

maritime trade. This adds some confusion in the strict comparison of figures. Whenever possible,

several sources have been used and included in this section, in order to enable a more comprehensive

0

10,000

20,000

30,000

40,000

50,000

60,000

70,000

80,000

90,000

100,000

2006 2007 2008 2009

Exports by rail

Exports by road


17

comparison that includes both the port perspective as well as the bilateral trade perspective. For clarity,

the terminology used to describe the two types of flows is defined as follows:

• Imports

o Imports by Mali from Senegal

o Imports by Senegal from Mali

o Imports by Senegal from overseas (arriving via ocean at the Port of Dakar)

• Exports

o Exports by Mali to Senegal

o Exports by Senegal to Mali

o Exports by Senegal to overseas destinations (departing via ocean at the Port of Dakar)

• Transits

o Inbound transits are imports by Mali from overseas (arriving via ocean at the Port of

Dakar and moving in transit through Senegal)

o Outbound transits are exports by Mali to overseas destinations (moving in transit

through Senegal and departing via ocean at the Port of Dakar)

Information and statistics on trade flows along the Dakar-Bamako corridor is scarce, fragmented,

sometimes inconsistent, and in some cases, contradictory. Therefore, the statistics presented in this

section can only be treated as representative volumes or rough estimates. Additionally, there is an

increased likelihood that the available statistics are somewhat distorted due to certain peculiarities of

trade and transportation patterns in Mali. Normally, this should not be an issue, however the statistics

available were not detailed or descriptive enough to allow for such distinction. There are three specific

examples:

1. Inbound transit statistics can include previously warehoused freight – this is particularly true for

imports of rice, which arrive in large volumes (and mostly in bulk) at time intervals for storage in

warehouses and subsequent withdrawal in smaller quantities. Differences in reporting by

different entities and lack of sufficient statistics detail can result in different volumes for port

traffic and corridor traffic.

2. Outbound transit statistics may or may not include warehoused cotton. Malian exports of cotton

often arrive in bulk and are stored at the EMASE warehouses until they are sold. This business

practice can result in different volumes for port traffic and corridor traffic, and the available

statistics did not adequately account for these differences.

3. Inadequate statistics for low-volume goods – many goods which are shipped in small volumes

are consolidated with other goods, and the resulting description of the commodities

transported is reported as “Good of all kinds” or “Goods not otherwise specified.” Specific

statistics about the volumes of such goods are not available at present, although in some cases


18

the nature of the goods could be determined from available information (although not the

volume).9

Total Corridor Traffic

Figure 4 depicts the

total volume of traffic

along the Dakar-Bamako

corridor, inclusive of all

imports, exports, and

transits (as defined

above) but excluding

Senegal traffic with

overseas partners.

Although 2009 saw a

decline in the volume of

ocean traffic at the Port

of Dakar, traffic along

the corridor showed a

modest increase due to

an increase in bilateral

trade between Senegal

and Mali, and in

particular exports from

Senegal. This increase

represented an increase

in volume by 35% in

2009 over 2008,

although the actual

value of bilateral trade

between the

neighboring countries

declined during the

same period by 18%.

(Source: EMASE)

9 Specific commodity description, values, and weights must be reported to Customs authorities, regardless of

whether shipments are consolidated or not. However, the quality and detail of the statistics available was not sufficient to allow for cross-referencing of this data among the multiple data sources. Therefore, low-volume shipments are left in a bundled format for the purpose of measuring the volume of traffic along the corridor.

0

200,000

400,000

600,000

800,000

1,000,000

1,200,000

1,400,000

1,600,000

1,800,000

2005 2006 2007 2008 2009

ton

s

Figure 5 Total Traffic along the Dakar-Bamako Corridor

400,000

450,000

500,000

550,000

600,000

650,000

700,000

750,000

800,000

850,000

900,000

2006 2007 2008 2009

ton

s InboundTransits

Imports fromSenegal

Figure 4 Total Traffic to Bamako


19

Inbound Traffic (Dakar – Bamako)

Inbound transits to Mali are dominated by petroleum products (30%), fertilizer (13%), rice (10%), iron,

equipment, and sugar (5% each), and wheat (3%)10. An additional 15% consists of “Goods of all kinds,”

which are various products of volumes that are sufficiently low to require consolidation with other

products. The resulting consolidated shipment is reported as “Goods of all kinds.” Imports from Senegal,

on the other hand, are dominated by cement (83%), followed by salt (6%), petroleum products (3%),

fertilizer (2%), and “Goods of all kinds” (2%). Rice is also exported from Senegal to Mali, although its

volume is low, at 1%, on average, of total exports to Mali by volume. The increase in the volume of

imports from Senegal is due to a 36% increase in exports of cement. (Source: EMASE)

Outbound Traffic (Bamako – Dakar)

Malian outbound transits are heavily dominated by cotton, on average comprising 86% of all outbound

transits by volume. The majority of the remaining volume of outbound transits can be attributed to

“Good of all kinds” (12%). Although the 12% cannot be accurately broken down by type of product,

other statistics indicate that the category contains products such as sesame seeds, animal skins and

hides, wood, precious stones, machinery and vehicle parts, and art and musical instruments, most of

which are high-value, low-volume commodities. The decrease in outbound transits is largely due to

decreasing exports of cotton from Mali. Exports of other products by volume appear to be slightly

increasing, although these are likely the aforementioned low-volume, high-value products. Exports to

Senegal, on the other hand, are mainly comprised of dried fruits (39%), “Goods of all kinds” (25%),

livestock (16%), and cattle feed (8%). The declines in exports to Senegal are most likely due to lower

exports of “Goods of all kinds,” peanuts, wheat bran, corn, and cattle feed. (Source: EMASE)

Figure 6 Total Traffic from Bamako

10

Percentages based on averages over the last 4 years (2006 – 2009)

0

10,000

20,000

30,000

40,000

50,000

60,000

70,000

80,000

90,000

100,000

2006 2007 2008 2009

ton

s

Exports to Senegal

Outbound Exports


20

Traffic of Agricultural Products

Figure 7 depicts the total movement of agricultural products along the Dakar – Bamako corridor

(excluding domestic movements within Mali and within Senegal, respectively, and shipments between

Senegal and its overseas partners). Trade in agricultural goods along the corridor is mainly in rice for

inbound traffic and cotton for outbound traffic, although sugar, wheat and livestock are also traded in

large enough volumes. Figure 8 depicts monthly traffic of agricultural products along the corridor for

2009. (Source: EMASE)

N.B. Trade in livestock depicted in Figure 7 includes only exports of livestock from Mali to Senegal.

Statistics on livestock exports from Senegal to Mali were not available.


21

Figure 7 Traffic of Agricultural Products Along the Dakar-Bamako Corridor by Volume

2006 2007 2008 2009

Rice (inbound transit) 63,861 49,999 70,454 83,951

Sugar (inbound transit) 21,081 38,819 15,442 35,515

Wheat (inbound transit) 24,511 18,398 13,643 11,583

Cotton (outbound transit) 82,912 60,208 39,368 24,238

Rice (import from Senegal) 5,657 5,823 435 2,205

Sugar (import from Senegal) 62 745 840 113

Wheat bran (export to Senegal) 3,089 1,171 67 40

Peanuts (export to Senegal) 945 1,504 377 353

Beans (export to Senegal) 0 686 51 331

Livestock (export to Senegal) 0 9,063 7,288 7,092

0

10,000

20,000

30,000

40,000

50,000

60,000

70,000

80,000

90,000

ton

sTraffic of Agricultural Products Along the Dakar - Bamako Corridor,

by Volume


22

Figure 8 Traffic of Agricultural Products Along the Dakar - Bamako Corridor, by Month by Volume

0

2,000

4,000

6,000

8,000

10,000

12,000

14,000

16,000

18,000

20,000

Jan-09 Feb-09 Mar-09 Apr-09 May-09 Jun-09 Jul-09 Aug-09 Sep-09 Oct-09 Nov-09 Dec-09

ton

sTraffic of Agricultural Products Along the Dakar - Bamako Corridor,

by Month by Volume (2009)

Rice (inbound transit)

Sugar (inbound transit)

Wheat (inbound transit)

Cotton (outbound transit)

Rice (import fromSenegal)

Sugar (import fromSenegal)

Wheat bran (export toSenegal)

Peanuts (export toSenegal)

Beans (export to Senegal)

Livestock (export toSenegal)


23

Supply Chain Descriptions

In line with the objectives of the PCE project, three supply chains representing the movements of

agricultural products along the Dakar-Bamako transport corridor were chosen as a baseline to describe

the inbound and outbound movement of commodities and to provide a framework to collect cost data.

Since rice and cotton are the top agricultural commodities transported along the corridor, by volume,

they were selected for more detailed study. Not all possible permutations of imports, exports and

transits of rice and cotton were examined, however; the study only includes the most common supply

chains, using the Port of Dakar as the anchor point. The supply chain schematics presented below are

generic and notional. More detailed process descriptions in the following section highlight differences

based on mode of transport and handling mode.

Supply chain 1 represents a transit shipment of rice. The shipment arrives via ocean transport at the

Port of Dakar, and in transported in transit to Bamako. The shipment may be containerized or in bulk,

and the transport to Bamako may be via road or rail.

Supply chain 2 represents an import shipment of rice. The shipment arrives via ocean transport at the

Port of Dakar, and is distributed in Senegal via road.

Supply chain 3 represents an export shipment of cotton. The shipment departs from Bamako and is

transported in transit to the Port of Dakar, where it departs via ocean transport. The shipment may be

containerized or in bulk, and the transport from Bamako may be via road or rail.

Port of Dakar Road Transport Senegal – Mali Border

Bamako 1

Road

Seneg


24

Commodity Profiles

Rice is the main inbound agricultural commodity moving along the corridor, and is both Senegal’s and

Mali’s top agricultural import, both by value and by weight. Cotton is the main outbound agricultural

commodity moving along the corridor, and most of it is shipped via ocean to overseas destinations.

Rice

Annual Imports

- Senegal

� 2009 value – $326,905,00011 � 2008 value – $646,209,000 (78% increase over 2007) � Annual volume – 750,000 tons (est)12

Annual Imports

– Mali

� 2008 value - $66,170,000 (66% increase over 2007) � Annual volume – 86,156 tons (2009); 70,889 tons (2008)13

Origin

� Most imported from overseas, and transported via ocean to Dakar � Mali imports from Senegal – 3,530 tons/year (avg) ; less than 1% of total

– 2009: 2,205 tons – 2008: 435 tons – 2007: 5,823 tons – 2006: 5,657 tons

Mode of

Transport

� 20% rail (Mali transits) � 80% truck (Mali transits) � 100% truck (imports into Senegal & Senegal exports to Mali)

Handling Mode � Most rice arrives at the Port of Dakar in bulk or in bags � Imports of premium rice are containerized

Characteristics

of Rice Imports

� International trade in rice is mainly conducted through large international trading companies. In Senegal, all rice importers work through trading companies (e.g. Cargill, Nidera, Lois Dreyfus).

� Typically, rice importers order large quantities of rice from traders (not directly from producers), which arrives in bulk or in bags at the Port of Dakar as CIF14 cargo. The frequency of such shipments is approximately once every 3 months.

� Bulk or bagged rice is moved from the port to bonded warehouses, which are sometimes managed by a third party on behalf of trading companies (usually inspection companies such as SGS or Cotecna). Rice is stored in bonded warehouses under a special Customs regime until it is depleted.

� Because it is not uncommon to load a ship without knowing the destination of the rice, especially if directed to Africa, and also because shipments are typically of very large quantities, traders carry the financial charges until a buyer is found and rice delivered to the final destination. Thus, a bank acts as intermediary between importers and traders.

� A trader continues to give instructions, through a bank, to the company operating the bonded warehouse to release a certain amount of rice to the

11

All statistics by value are sourced from the International Trade Centre 12

Source: Interviews with rice importers 13

Source: EMASE. The volume data provided by EMASE is inconsistent with estimates provided by rice importers and freight forwarders specializing in rice, who place the average annual volume at 250,000 tons. 14

Cost, Insurance, Freight, an internationally-recognized INCOTERM


25

importer, until all the rice is depleted. � Wholesalers buy rice in smaller quantities at the warehouses, and generally

transport it using their own trucking fleets, usually for short distances. � Containerized shipments or smaller bulk shipments are typically released at the

port and do not have an intermediate bonded warehousing step as described above.

Cotton

Annual Exports

- Mali

� 2008 value – $205,667,000 � 2007 value - $200,251,000 (22% decrease over 2006) � 2009 volume – 24,238 tons � 2008 volume – 39,368 tons � 2007 volume – 60,208 tons

Annual Exports

– Senegal15

� 2009 value – $14,158,000 � 2008 value - $24,384,000 (21% decrease over 2007) � Volume information not available

Mode of

Transport

� 95% rail (bulk shipments) � 5% truck (containerized shipments)

Handling Mode

� Cotton is mainly transported to the Port of Dakar in bulk. � Some cotton is containerized in Mali (mainly shipments covered by a through

Bill of Lading). � All cotton loaded on vessels is containerized.

Characteristics

of Cotton

Exports

� Cotton is covered under a special convention, and the Bollore Group has exclusivity in its transportation.

� Approximately 95% of all cotton exports from Mali are bulk, FOB Dakar. � Because most bulk exports are not yet sold, they are stored at the EMASE

warehouse until a contract of sale is signed. � Upon the completion of a sale, the cotton is containerized at the EMASE

warehouse, and is transported to the Port of Dakar for vessel loading. � A small percentage of cotton is moved directly to the Port of Dakar under a

through Bill of Lading. Such shipments are typically containerized in Mali, and are transported by road.

Process Descriptions

Although the processes described in this section were approached from the perspective of importing

rice and exporting cotton, an attempt has been made to generalize the process descriptions so that

insight can be gained for all imports, transits, and exports, regardless of the type of commodity.

Import Process

# Process Step Comments

0 Vessel arrival

15

Data provided for informational purposes only. The study did not examine exports of cotton from Senegal.


26


1 Carrier submits cargo manifest to Senegal Customs. Customs official enter manifest data into Gainde 2000, the Customs electronic system.

Paper manifests (except Maersk, who can submit manifests electronically)

2 Merchandise is offloaded from the vessel and stored in a Customs warehouse. (For bulk shipments of rice) Rice is moved to a bagging station within the port for bagging.

SDV16 operates a CFS17 within the port that can be used for rice

2a Cargo can also be immediately moved to a bonded warehouse or a CFS outside the port (bonded warehouses operate under a special Customs regime for rice; there are no Customs agents at the warehouses but Customs conducts occasional visits to ensure compliance)

3 Customs verifies the merchandise quantities as reported on the manifest against actual quantities delivered by physically counting and verifying the cargo – for containerized cargo, the containers are counted – for bulk cargo, the cargo is weighed

This step can take up to 1 day at maximum

4 Orbus / Single Window process: a) Importer or forwarding agent enters the

Commercial Invoice (CI) in the Orbus system. b) The Orbus system determines all documents

required for the import, and calculates the duties and fees due

c) The Orbus system sends a request to each government agency for the relevant documents

d) The relevant government agencies access Orbus and create the required documents

e) Forwarding agent prints out the documents and attaches them to the commercial documents and the Customs declaration (step 5)

Data entry of the CI is manual

5 Importer’s forwarding agent gathers and scans the Commercial Invoice, the Bill of Lading, and the Packing List, and creates an import declaration (usually submitted any time after vessel arrival) in the Customs system (Gainde 2000).

Self-filing is not possible Advance import declaration is possible for goods transported by Maersk. Pre-arrival Customs release, however, is only available for certain low-risk products. Unless using the advance import declaration, forwarding agents wait for an Arrival Notice from carriers. Sometimes, there can be delays in the transmission of this document that can exceed the 10 days of free storage at

16

SDV is a transport and logistics subsidiary of the Bollore Group. 17

Container Freight Station


27


the port, and importers can incur demurrage charges as a result.

6 Forwarding agent prints the import declaration, collects all other documents pertaining to the import and required by Customs (step 4), and physically delivers the file to Customs.

Other documents include Commercial Invoice, Packing List, Bill of Lading, Cargo Tracking Note, and any other documents required by other government agencies as submitted through Orbus (see step 4)

7 Upon receipt of the import declaration, Customs agents ensure that all the documents conform to the declaration (i.e. document validation)

Manual step that can easily be eliminated through automation

8 Customs system (Gainde 2000) performs risk analysis/ applies selectivity controls, and assigns the shipment to one of four lanes.

Selectivity is based on relatively simplistic criteria including the nature of the goods, the country of origin, classification, etc.

9a Green lane – the shipment is released following satisfactory review of shipment documents

A true “Green Lane,” based on international best practices such as AEO18, would not require document review for each shipment

9b Yellow lane – the shipment is released following satisfactory review of shipment documents; Customs will conduct post-release audit of the shipment

9c Orange lane – shipment is released following satisfactory results from scanning the shipment. If the scan has positive results, then the shipment is sent for physical inspection (step 9d)

Cotecna operates the mobile scanning equipment, and coordinates the results of the scan with Customs. This step takes about 15 minutes because the container doesn’t need to be moved from its storage location

9d Red lane – forwarding agent asks Customs for an appointment for the inspection; forwarding agent coordinates with the terminal operator to move the shipment to a dedicated inspection area at the designated time; terminal operator moves shipment to the dedicated inspection. Customs agents physically inspect the contents of the shipment, which is released following satisfactory inspection results.

The inspection itself takes 30 min per 20 ft container and 60 min per 40 ft container. Moving a container from storage to the inspection area takes more time, due to port traffic

10 Shipment is released by Customs Electronic release is accessible

18

Authorized Economic Operator, part of the World Customs Organization’s SAFE Framework of Standards to Secure and Facilitate Global Trade


28


by forwarding agents in Gainde 2000

11 Forwarding agent takes the printed Customs release to the port and pays all the port taxes and fees due. (Payment of Customs duties and fees also takes place, through the Orbus system.)

Typically payment is made to the terminal operator, who charges for port taxes and fees on behalf of the port authority. Delays can occur at this step, because even though the port operations are 24/7, the opening hours for payment are not.

12 Forwarding agent (or transporter), presents the following documents to the shipping line:

– Customs release – Proof of payment of port taxes and fees – Original BOL

13 Shipping line issues a delivery order for the shipment, and delivers the cargo from the storage area and loads it on trucks. [Rice shipment] If rice arrives bagged, it is loaded directly on trailers. If rice arrives in bulk, it is bagged before loading on trailers. (This happens whether the merchandise clears Customs at the port or at a bonded warehouse outside the port)

PAD statistics indicate that the turnaround time for this step has been reduced to less than 20 minutes; however, interviews with forwarding agents suggested that this is not always the case and delays do occur due to some congestion at the port (while infrastructure upgrades are still ongoing)

14 The printed Customs release and the shipping line delivery order are presented at the port gate to complete exit formalities. For bulk shipments, truck passes through a weighbridge to verify the shipment weight comports to the weight declared on the documents

When the WAEMU axle-weight limit regulations become fully enforced, all trucks will pass through the weighbridge to verify compliance with the regulations

15 [If rice moving to a bonded warehouse] Merchandise is stored at a bonded warehouse, pending authorization for release by traders and a Customs release. There is a special Customs declaration allowing rice to be cleared as it is sold.

16 [If rice stored at a bonded warehouse] Rice is loaded on trucks

17 Rice is transported to its final destination

Transit Process (Inbound)


0 Vessel arrival


29


1 Carrier submits cargo manifest to Senegal Customs. Customs official enter manifest data into Gainde 2000, the Customs electronic system.

Paper manifests (except Maersk, who can submit manifests electronically)

2 Merchandise is offloaded from the vessel and stored in a Customs warehouse. (For bulk shipments of rice) Rice is moved to a bagging station within the port for bagging.

SDV19 operates a CFS20 within the port that can be used for rice

3 Customs verifies the merchandise quantities as reported on the manifest against actual quantities delivered by physically counting and verifying the cargo – for containerized cargo, the containers are counted – for bulk cargo, the cargo is weighed

This step can take up to 1 day at maximum

4 Importer’s forwarding agent gathers and scans the relevant commercial documents and creates a transit declaration (S110) in the Customs system (Gainde 2000).

Self-filing is not possible

6 Forwarding agent prints the transit declaration, collects all other required documents and physically delivers the file to Customs.

7 A verification officer from the Customs clearance department issues the Customs release for the transit shipment and requests an escort, based on risk analysis.

There is a lack of transparency as to which transit shipments require a physical escort. According to Senegal Customs, it is possible to release a transit without an escort for non-sensitive products; however, certain sensitive commodities require an escort. Interviews with the private sector, however, suggest that all transits must pay the transit escort fees, even if an actual physical escort does not always accompany the shipment.

8 Forwarding agent takes the Customs release for the transit shipment to the port and pays all the port taxes and fees due.

9 Forwarding agent (or transporter), presents the following documents to the shipping line:

– Customs release – Proof of payment of port taxes and fees – Original BOL

10 Shipping line issues a delivery order for the shipment, delivers the cargo from the storage area and loads it on

19

SDV is a transport and logistics subsidiary of the Bollore Group. 20

Container Freight Station


30


the truck.

11 The forwarding agent goes to the Inspection department, which provides the escort agent per the instructions from the verification officer. If there is no escort, a Custom seal is attached to the vehicle or container by the Inspection department at this time.

12 The printed Customs release and the shipping line delivery order are presented at the port gate to complete exit formalities. For bulk shipments, truck passes through a weighbridge to verify the shipment weight comports to the weight declared on the documents The Customs escort agent leaves with the shipment, carrying the shipment documents

When the WAEMU axle-weight limit regulations become fully enforced, all trucks will pass through the weighbridge to verify compliance with the regulations

13 The shipment moves from Dakar to the border crossing at Kidira. En route, the vehicle passes through approximately 30 checkpoints, verifying compliance with regulations and matters such as the security, safety, smuggling, etc.

Although there are plans to reduce the number of checkpoints to three, at the time of writing this project had not yet been effectively implemented

14 The shipment arrives at the Senegal – Mali border. Often, the Customs escort does not accompany the shipment and does not arrive with the documents required to cross the border until well after the shipment has arrived, creating delays

15 Upon arrival, the Customs escort signs the transit declaration (the declaration must be signed in order to be valid)

16 The documents (transit declaration, commercial documents, and Waybill) are given to Senegal Customs for processing

The Waybill (road only) is required by Mali but not by Senegal

17 Senegal Customs transfer the documents to Mali Customs for processing

18 The transporter pays Mali Customs any duties, taxes, and fees due, as well as the TRIE guarantee (0.25% of the goods’ value), for which Mali Customs issues an ECOWAS ISRT LogBook

This is in contravention of a 2002 bilateral agreement between Senegal and Mali regarding transits, which was modeled after the ECOWAS TRIE agreement. (See Appendix B for a detailed description of TRIE and the bilateral agreement on transits)

19 Mali Customs releases the shipment


31


20 The truck moves to await the twice-daily escort convoy into Bamako

21 The shipment moves from Diboli to Bamako. En route, the vehicle passes through approximately 7 checkpoints, verifying compliance with regulations and matters such as the security, safety, smuggling, etc.

Although Mali has 3 official checkpoints between Diboli and Bamako, in reality there are about 7 unofficial checkpoints

The process described above applies to transits transported by road, and is more complex than the

procedure for transits transported by rail. The advantages of rail transport include simplified customs

procedures, adapted from the International Convention to Facilitate the Crossing of Frontiers for Goods

Carried by Rail (TIF). In addition to no customs and police inspections en route, there are no Customs

escorts, Customs procedures have been simplified, and they are based on a single transit document, the

Transit International Ferroviaire (TIF) document. The TIF accompanies the goods from Dakar to Bamako

and replaces the Senegalese and Malian national customs documents and procedures, thereby

simplifying customs and administrative formalities and reducing the cost and delays.

Transit Process (Outbound)

The outbound transit process is a reverse of the inbound transit process. The outbound transit for the

purposes of this report is also an export from Mali, and since exports are encouraged and often enjoy

special privileges compared to imports, the outbound transit process is much simpler than the inbound

transit process. Additionally, particularly for the commodity selected – cotton – outbound exports are

almost exclusively transported by rail (95%). In addition to no customs and police inspections en route,

rail shipments encounter no Customs escorts, Customs procedures are simplified and are based on a

single transit document, the Transit International Ferroviaire (TIF) document. The TIF accompanies the

goods from Dakar to Bamako and replaces the Senegalese and Malian national customs documents and

procedures. Therefore, the outbound transit process is not described in as much detail as the other two

processes.


1 Merchandise is prepared for export. If already sold, merchandise is containerized; if not already sold, merchandise is loaded on rail cars in bulk.

2 Shipper (or shipper’s forwarding agent) prepares the shipment documents

Bill of Lading (if merchandise is sold and is traveling on a through BOL) Waybill (if road) Customs declaration (if road) TIF (if rail) TRIE carnet

3 Documents are filed with Customs

4 Mali Customs clears the shipment for export

6 Shipper pays all fees due to Mali Customs Customs declaration/TIF fees,


32


EMASE fees, Customs escort fees, TRIE guarantee

7 Shipment leaves for Senegal; if transported by road, it is accompanied by an escort

8 Shipment arrived at border crossing with Senegal

8a (If rail) Shipment crosses the border based on the TIF document

8b (If road) Shipment goes through Mali Customs and Senegal Customs formalities; a Senegal Customs transit declaration (S110) is filled out; and an escort is assigned

9 Shipment is cleared at the border and continues to Dakar

10a (If road/sold) Shipment arrives at Port of Dakar

10b (If rail/unsold) Shipment arrives at EMASE; when sold, shipment is containerized; loaded on trucks for delivery to the port, and related shipping documents are created

11 The container is delivered, with all relevant documents, to the carrier within the port

12 Container is stored until vessel loading (For exports from Senegal: Customs clearance is automatic (except for certain shipments that need specific documents such as a COO), and the declaration and documents can often be submitted after departure)

13 Senegal Customs physically inspects all containers from Mali prior to vessel loading (For exports from Senegal: Customs agents must be present at container stuffing locations, and shippers must pay 10,000 CFA for a certificate of stuffing)

The purpose of the inspection is to control for illegal drugs

14 Shipment is loaded on vessel

15 Vessel departs

Documents

Various documents are required for the international trade and transport of commodities, some of them

commercial, others governmental or required for compliance reasons. The following table is not meant

to provide an exhaustive list of the documents required for international trade; rather, it is meant to

highlight documents specifically applicable to transport to, from and through Mali and Senegal (and in

particular, for shipments of rice and cotton). Therefore, commercial documents such as Commercial

Invoice, Bill of Lading (BOL), and Packing List are excluded from this discussion.

Name Description Cost

Cargo Tracking Note (Bordereau de Suivi de Cargaisons (BSC))

Required for all imports by: � Senegal – COSEC & Senegal Customs � Mali – CMC21

(Senegal) €15/20 ft container, €30/40 ft

21

Conseil des Chargeurs Maliens, Mali’s shipper’s council and the equivalent of COSEC


33

Ostensibly required to enable Shippers’ Councils in West Africa to determine ocean freight rates, the Cargo Tracking Note adds another (mostly redundant) documentary requirement (and associated cost) for importers

container, €50/300 tons (bulk)

Cargo Offer (Offre de Cargaison)

Required for all exports from Senegal by COSEC & Senegal Customs

N/A

Waybill (Lettre de Voiture) Required by the Mali Ministry of Transport, this is a document that is not yet required in Senegal. CCIAD has proposed introducing a standard Waybill in Senegal, and is in discussion with the Ministry of Transport

2,500 FCFA ($5)

Prior Notice of Imports (Declaration Prealable d’Importation (DPI))

Required by Inspection Company (COTECNA) for all imports to Senegal

1000 FCFA ($2)

Certificat of Verification (L’Attestation de Verification (AV))

Required by Inspection Company (COTECNA) for exports from Senegal

N/A

Food product import notification (Declaration d’Importation de Produits Alimentaires (DIPA))

Required by the Control and Quality Division Ministry of Commerce

N/A

TRIE Carnet Required by Mali Customs for all transits Optional in Senegal

6,000 FCFA ($11)

Customs declaration Required for all imports, transits, or exports Senegal: 9,500 FCFA ($18)

Phytosanitary Inspection/Certificate

required for all agricultural imports by DPV (Direction de la Protection des Vegetaux)

N/A

Certificate of Import/Export (Attestation d’Importation/d’Exportation (AI)/(AE))

Required for all imports/exports to/from Senegal

1,000 FCFA ($2)

Exchange authorization/ Commitment (Autorisation/Engagement de Change (AC)/(EC))

Required for all imports/exports to/from Senegal

500 FCFA ($1)

Declaration d’Importation de Produits alimentires

Required by the Control and Quality Division for food products imported to Senegal

N/A

Table 4 Selected Documents Required for Import and Export


34

Recent Developments and Achievements

Investment programs in transport and logistics are creating new capacities to support Senegal’s

economic development priorities. The nexus of investments is Dakar, which is clearly gearing up to

become a regional transport hub. Recent developments and achievements are positive and impressive,

but long-term progress requires firm commitment.

Initiative Description Status

Port of Dakar

Modernization

� In 2007, DP World was awarded the concession to operate and further develop the existing container terminals at Dakar, with the aim of more than doubling the capacity of the existing terminal (to around 550,000 TEUs

� Infrastructure upgrades such as a container terminal extension and the installation of two post-panamax ship-to-shore cranes and 10 gantry cranes has improved port productivity during the 2008-2009 period – Ships’ handling productivity has more than

doubled – Waiting time at anchorage has decreased from

100 minutes to less than 10 minutes – Truck turnaround time has decreased from 120

minutes to less than 20 minutes � Planned investments

– Construction of “The Port of the Future” will provide deep sea berths and expand the capacity to 1.75 million TEUs

– Construction of a fruit terminal with a 45,000m3 capacity

– Construction of a grain terminal – Security enhancements such as C-TPAT

certification, ISO 28000 certification and physical security (CCTV, access control)

In Progress

Dry Port Facilities � Creation of a dry port in Bamako (ENSEMA), to facilitate the storage and customs clearance of goods

� Planned construction of dry ports at Kaolack and Tambacounda would provide additional capacity

Complete (Kaolack & Tambacounda – planned)

Dakar Logistics

Platform

� Completion of a Logistics Platform outside the Port of Dakar

� Total capacity - 21 hectares, warehousing capacity – 60,000 m2

� Dakar Port Distribution Platform with a capacity of 8,500 m2 for distribution facilities

Completed Opening expected by the end of 2010

Dakar Integrated

Special Economic

Zone (DISEZ)

� Construction of a 6,500,000m2 special economic zone by Jafza International to support industrial, commercial, logistics, and services activities

In Progress Planning stage


35


� Located near the new international airport in Diass � Expected to support intermodal links to the port of

Dakar and to Bamako, through the Dakar-Mali railway, the Dakar-Diamniadio tollroad, and the existing road network

New International

Airport Blaise

Diagne

� Construction of a new international airport at Diass, 40 km outside Dakar, to enable the prompt movement of goods to international destinations

� GoS projects 54,000 tons of air freight in 2020 � Will increase air freight capacity, and is expected to

be especially beneficial for the transport of high value goods and perishables (agricultural goods)

In progress Planning stage

Dakar-Diamniadio

Tollroad

� Connect Dakar to Diamniadio (34 km) and also the new airport (40 km)

� Provide easy access to DISEZ and enable the prompt movement of goods from the site to destination locations

In progress Construction stage

Road Construction GoS is in the process of expanding its road network

� The construction of a new road along the Kedougou –

Saraya – Mali border stretch will provide a new 180-

km shorter Southern access to Bamako

� Construction of a new road along the Saraya – Falémé stretch, as well as a bridge at Falémé

In progress Completion expected within a year

Railroad Upgrade GoS is planning the upgrade of the (highly outdated) rail infrastructure � Upgrade the Dakar-Tambacounda stretch to standard

gauge � Addition of a third track between Dakar – Thies,

including an intermodal link at the airport � New track between St. Louis and Thies � Consideration of new tracks to Faleme and Matam

In progress Planning stage

Enforcement of

WAEMU Axle-

weight Limits

� Both Senegal and Mali are expected to begin enforcing the WAEMU regulation in the near future (WAEMU members had agreed to fully enforce the regulation by June 2010, however, delays with the installation of weighbridges has resulted in both countries extending the deadline)

� Mali has installed 5 weighbridges at border crossings with Senegal (at Diboli), Cote d’Ivoire, Burkina Faso, Ghana, and Burkina Faso via Togo, which together handle 90% of the traffic coming into Mali

� Senegal is going through a tender process for the selection of an entity to install and operate its weighbridge facilities along the corridor (expected to be co-located at joint control post facilities)

In progress Expected to be operational in early 2011


36


� It is expected that CCIAD22 will operate its existing weighbridge at the Port of Dakar for WAEMU regulation enforcement purposes

� The GoS is also considering a requirement for factories or facilities that ship more than 200,000 tons/year to weigh trucks as they leave the factory, and is currently working on identifying those factories that meet the volume parameter.

Checkpoint

Reduction

� Following the shocking results of the WAEMU Improved Road Transport Governance Initiative (IRTG)23, Senegal has committed to reducing and harmonizing the number of checkpoints between Dakar and Kidira

– Gendarmerie24 controls will be reduced to 3 zones – one round Dakar, one at Kafrinne, and one at Kidira, with trucks displaying a zone-specific sticker

– The Gendarmerie is adopting various anti-corruption measures, such as a toll-free number to report illegal checkpoints and officers carrying ID badges and GPS devices to enable easy identification and reporting

– The initiative to harmonize the checkpoints includes reducing the number of checkpoints to three, and co-locating all control agencies at these checkpoints only (including weighbridges for the enforcement of WAEMU axle-weight regulations)

In Progress Completion expected by the end of 2010

Customs

modernization

� Senegal was considered among the top reformers in the World Bank’s Doing Business indicators for Trading Across Borders in 2009

� Senegal Customs is currently implementing its “Paperless” project, whose objectives are to implement fully electronic Customs processes and procedures

� Gainde 2010 is an upgrade of the automated Customs system that will provide electronic integration among all Customs border posts (this will enable Customs to have “one version of the truth” and collect comprehensive statistics)

In Progress In various stages of implementation

22

Dakar Chamber of Commerce 23

IRTG reports monitors road barriers along major West African transport corridors, and the delays and bribes transporters incur at these checkpoints. The 9

th IRTG report, covering the 3

rd quarter of 2009, featured results

along the Dakar-Bamako corridor for the first time. The report revealed that Senegal had the densest concentration of checkpoints (26 per trip) and the second highest level of extortion at checkpoints ($64 per trip). 24

According to the IRTG results, the Gendarmerie is the entity responsible for the largest number of checkpoints in Senegal.


37


� Gainde 2010 will also provide electronic data exchange capabilities through the implementation of EDI, allowing electronic integration between Customs and economic operators25 (Senegal Customs already accepts electronic manifests from once carrier, Maersk)

� Enabling legislature for electronic signature has been passed, so after Gainde 2010 goes live, there should not be a need for hard copy documents

Trade Facilitation � Both the Port of Dakar and Senegal Customs have implemented continuous, round-the-clock port operations

� Senegal Customs working towards developing an Authorized Economic Operator AEO26program, and is defining the criteria for certifying authorized traders

� Senegal Customs has plans to offer simplified procedures for authorized traders

� A Customs Private Sector Consultation Working Group is used to facilitate consultation with industry

� A Public-Private Dialog framework is being put in place to increase cooperation with industry

� Transport and delivery of containers from the Port of Dakar is being deregulated27, allowing all authorized companies to transport and deliver containers to and from the Port of Dakar

In progress No concrete estimate for completion

Single Window � Orbus is the electronic system developed as Senegal’s Single Window

� Although its functionality is limited at present, Orbus will be upgraded as part of the “Paperless” Customs project

� Current functionality allows traders to submit the information for and electronically access documents required by government agencies other than Customs for importing and exporting; however, the documents must still be printed out before submittal to Customs

� When upgraded, Orbus is expected to be integrated with Gainde 2010 and enabled to electronically collect all relevant commercial documents, thus eliminating the paper step and becoming a true

Completed Upgrade in progress

25

Gainde 2010 is being implemented in a phased approach, and the Customs offices at Dakar-Petrole and Dakar-Yoff have been using it since January 12, 2009, and March 31, 2010, respectively. The system is currently being tested at the Customs offices at the Port of Dakar. 26

Authorised Economic Operator is a Customs-Business partnership program defined in the World Customs Organization’s SAFE Framework of Standards 27

As per Inter-ministerial order 6365, from December 31, 2009


38


electronic Single Window � Corbus, the electronic system developed by Gainde

2000 in parallel with Orbus, allows electronic payment of duties and taxes to Senegal Customs28

Joint Customs

border controls

� The governments of Senegal and Mali are looking at integrating Customs operations and procedures and creating one-stop shop joint border posts at border crossings

– Kidira-Diboli – Border crossing along new Southern road

� Mali is on schedule to complete a one-stop-shop joint border post with Guinea in 2012 (including a weighbridge for axle-weight limit enforcement and joints administrative procedures such as Customs and TRIE processing)

Planned No concrete estimate for completion

Electronic tracking

of transit shipments

� Customs has awarded a contract to the inspection company Cotecna for the implementation of a project to provide electronic tracking via GPS devices for merchandise in transit

� The GPS devices are supposed to replace the physical Customs escort required for transit shipments by road

� The devices track the position and movement of trucks along the corridor, and can identify when vehicles steer off the approved transit route, or when vehicles make suspicious stops. The devices cannot, however, prevent or identify any tampering with the vehicle or the merchandise.

In Progress In Pilot stage

Truck fleet renewal � Recognizing the lamentable state of the Senegalese trucking fleet, the GoS has begun a dialog with economic operators to consider financing options

� GoS is considering providing financial incentives to economic operators, such as repealing the Value Added Tax (VAT) or creating a program for financing the purchase of vehicles

Under consideration

Improvements in Doing Business Indicators and Logistics Performance Index

Senegal has recently made significant improvements in trade and logistics indicators, although

opportunities for improvement remain. The Investment Presidential Council, through its working

groups, has placed significant emphasis on making sustained progress in improving performance against

the World Bank’s Doing Business Indicators, and specifically in the Trading Across Borders category, and

thus improving Senegal’s trade facilitation capacity.

28

The system is operational since April 2010, however, banks are still being integrated


39

The Doing Business report provides objective measures of business regulations and their enforcement

across 183 economies, in 10 indicator sets. The pertinent data set for the purposes of this report is the

“Trading Across Borders” indicator set, which measures exporting and importing by ocean transport,

focusing on the documents, time, and cost to import and export. Table 5 presents Senegal’s

performance for each of these subindicators.

Trading Across Borders in Senegal 2008 2009 2010

Rank 64 57

Cost to export (US$ per container) 29 828 1,078 1,098

Cost to import (US$ per container) 1,720 1,920 1,940

Documents to export (number)30 11 6 6

Documents to import (number) 11 5 5

Time to export (days)31 20 14 11

Time to import (days)32 26 18 14 Table 5 Doing Business Indicators, Trading Across Borders

Senegal has been making impressive progress in recent years. In the 2009 edition of Doing Business,

Senegal was considered among the top reformers in the Trading Across Borders indicator. Through

aggressive reforms in Customs and port modernization, Senegal’s 2010 rank has improved by seven

points, with the country now ranking 57th in the world. Of the ten Doing Business indicators, this is by far

the area where Senegal ranks the highest, as its overall Doing Business rank is 157. (Note: the Doing

Business/Trading Across Borders indicators measure only the procedural requirements for exporting and

importing by ocean transport; inland transport and inland border procedures are not taken into

account; therefore these indicators do not accurately reflect the state of transport along the entire

corridor).

Customs and port modernization initiatives have almost halved the number of documents required to

export and import since 2008. However, while aggressive and highly successful port reform has

contributed to reducing the time to export and import by almost half, it is also the most likely

contributor to a slight increase in the cost to import and export. Since Dubai Ports World (DPW) has

taken over management and improvement of the container terminal in the North zone of the Port of

Dakar, industry has noted an increase in the port and handling costs. As DPW makes infrastructure

improvements and investments, port capacity is increasing, however, costs are rising as well. While

industry hails the increased efficiency at the port, they note that the port fees are too high.

29

All fees associated with completing the procedures to export or import are included, such as costs for documents, administrative fees for customs clearance and technical control, terminal handling charges, inland transport, cost for issuing or securing a letter of credit (costs based on 20-ft container) 30

Documents recorded include port filing documents, customs declaration and clearance documents, and official documents exchanged between the parties to the transaction 31

The procedures measured range from the packing of the goods at the factory to their departure from the port of exit 32

The procedures measured range from the vessel’s arrival at the port of entry to the shipment’s delivery at the importer’s warehouse


40

When viewed from a regional context as well, Senegal’s Trading Across Borders reforms are impressive.

Compared to its regional partners, as well as with three other peers, Tunisia, Vietnam, and Romania

(developing countries with similar markets or GDPs), Senegal’s rank improvement fares very well. With

the exception of Mali, Senegal has the highest improvement in its Trading Across Borders rank, and is

ranked lower than only Tunisia and Romania (see Table 6). Senegal outperforms its Sub-Saharan Africa

partners in every single subindicator.

Country 2009 2010 Change

Senegal 64 57 -7

Cote d'Ivoire 158 160 2

Ghana 80 83 3

Guinea 126 130 4

Togo 90 87 -3

Mali 166 156 -10

Tunisia 42 40 -2

Vietnam 73 74 1

Romania 43 46 3 Table 6 Trading Across Borders Rank Changes

Senegal’s improvements are also measured in a related report, the World Bank’s Logistics Performance

Index (LPI). The LPI takes a slightly different perspective on a similar issue, and is a perceptual measure

of a country’s logistics performance33. While related to the Trading Across Borders indicator, the LPI

measures a different, and broader, set of activities—from transport, warehousing, cargo consolidation,

and border clearance to in-country distribution and payment systems.34

Figure 9 Overall Logistics Performance Index

33

as measured on a 1 to 5 scale (lowest to highest performance) 34

The LPI relies on a structured online survey of logistics professionals from the companies responsible for moving goods around the world: multinational freight forwarders and the main express carriers. Nearly 1,000 logistics professionals from international logistics companies in 130 countries participated in the 2010 LPI edition.


41

Senegal was among the top 10 logistics performers in 2010 for low-income countries (behind only

Vietnam), outperforming its regional partners. Its 2010 rank, at 58, is much lower than in 2007, when

Senegal ranked 101st, and is significantly better than its regional partners, the next lowest being Togo at

96. Its overall LPI is at 2.86, compared with 2.37 in 2007, and it represents the biggest increase relative

to its regional partners. As with the Trading Across Borders indicator, Senegal’s LPI performance is due

to the significant port and Customs reforms undertaken by Senegal in recent years. Figure 9 depicts

Senegal’s LPI performance relative to its regional partners, three other similar countries (Tunisia,

Vietnam and Romania), and, for benchmarking purposes, 2007’s top performer and 2010’s second

highest performer, Singapore.

Figure 10 presents Senegal’s performance against the six LPI dimensions, and compares it against its

regional partners35:

� Customs –perception of the efficiency of the Customs clearance process

� Infrastructure –perception of the quality of trade and transport related infrastructure

� International Shipments – perception of the ease of arranging competitively priced shipments

� Logistics Quality and Competence – perception of the competence and quality of logistics

services

� Tracking & Tracing – perception of the ability to track and trace consignments

� Timeliness – perception of the frequency with which shipments reach the consignee within the

scheduled or expected delivery time

Figure 10 Logistics Performance Index (International Portion)

35

Data provided by logistics professionals working outside of the country. Since there is limited or inconsistent input by logistics professionals working inside the countries,the domestic view is not fully represented here.

0

1

2

3

4Customs

Infrastructure

Int'l Shipments

Logistics Quality& Competence

Tracking &Tracing

Timeliness

Senegal

Cote d'Ivoire

Ghana

Guinea

Togo

Mali


42

Costs of Transport

To calculate the cost of transportation along the corridor, the three supply chains previously introduced

were used, namely, imports of rice into Senegal, imports of rice into Mali transiting through Senegal,

and exports of cotton from Mali to overseas destinations, transiting through Senegal to the Port of

Dakar. Costs were determined in interviews with public and private sector entities, and were obtained

for containerized shipments (20 foot container), and for bulk shipments.

Rice is traditionally transported in bulk or in bags, arriving by ocean every 2-3 months in large quantities

(e.g. 3,000 tons), with Dakar used as a storage point. Dakar has many warehouses for rice (they are

mainly bonded warehouses, as rice is covered by a specific Customs procedure), where importers take

delivery of smaller shipments until depletion (the shipments typically clear Customs at the time the

importers take delivery). However, since the rice crisis in 2008, containerized shipment of rice has been

on the rise. Containerized shipments, however, are only of premium rice, because transport of rice is

very price-sensitive, and only premium rice shipments have the margins to allow the higher cost of

transport by container. Most rice still arrives in bulk, is bagged at the port, moved to a warehouse, and

picked up from there by rice distributors’ own fleets (however, one freight forwarder in particular has a

38% market share of the rice transported to Mali). 80% of the rice transported to Mali and all the rice

imported into Senegal is by truck. Because of truck overloading by smaller domestic (mostly Malian)

transporters, and to make imported rice competitive with domestic rice, the transportation of bulk or

bagged rice is considered to be quite cheap relative to the transport of other goods, at about 30 – 40

CFA per ton per km, making containerized transport, and transport by the larger multinational

companies not as cost-effective.

The transport of cotton, on the other hand, is almost exclusively by rail. Cotton is rarely sold prior to

arrival in bulk for warehousing in Dakar. Therefore, because the transport is not as time-sensitive,

transportation by rail is relatively cheaper, and Customs transit formalities are simpler, rail is the

preferred method of transport for bulk cotton from Bamako. Cotton is containerized in Dakar for the

onward ocean journey. A small proportion of cotton exports are sold prior to departure from Bamako,

and they are containerized there, and transported by truck on a through Bill of Lading. However,

containerized transits of cotton represent only about 5% of all cotton exports from Mali.

Assumptions

� Costs do not include ocean freight, insurance, Customs duties and taxes, or domestic

transportation at the overseas country of origin or destination (for imports and exports,

respectively)

� One Bill of Lading covers one 20 ft container and one 30-ton bulk shipment, respectively

� The costs for bulk are calculated based on a 30 tons average weight (the weight varies based on

truck capacity). In reality, truck overloading is a very common practice (at least until the WAEMU

axle-weight limit regulations come into effect), causing pricing for haulage to be very low and

pricing certain hauliers out of the market

� One 20 ft container of rice weighs 25 metric tons, on average


43

� One 20 ft container of cotton weighs 10 metric tons, on average

� Transport charges within Senegal based on a 180 km shipment to Kaolack

� Large transport operators base transport tariffs within Senegal on a 3-zone tariff schedule that is

harmonized among them. Smaller operators negotiate transport prices based on kilometric ton,

usually about 30 - 42 FCFA/km/ton

� Euro exchange rate used: 1 EUR = 1.27073 USD (used for calculating Cargo Tracking Note fees)

� Dollar exchange rate used: 1USD = 516.127 XOF (FCFA)

� Warehousing/storage charges are not included in calculation but are examined separately


44

Rice Import Costs

Figure 11 Transportation Costs - Rice Import into Senegal


45

Explanatory Notes:

1. For imports to Senegal, the port tax is calculated per metric ton, based on the nature of the

merchandise. For containerized shipments, this is 1,180 FCFA/ton, and for bulk shipments, it is

425 FCFA/ton

2. The handling fee for containerized cargo and for bulk is assessed based on metric ton and nature

of merchandise, at a rate of 5,001 FCFA/ton.

3. Lifting charges include lift on and lift off charges

4. Currently, weighbridge fees are only assessed on bulk shipments.

5. The fee for unstuffing a container.

6. Bagging fees only apply to rice that arrives in bulk

7. This only applies to bulk shipments of rice. Most containerized shipments are directly

transported from the port to the final destination.

8. This is applicable to bulk shipments of rice that are moved to a bonded warehouse. Bonded

warehouses do not have Customs agents on site, but must have representatives from an

inspection company (e.g. SGS, Cotecna)

9. Price per 20 ft container based on transport to Zone 2 (up to 250 km from Dakar). Price for a

bulk shipment is based on a rate of 30 FCFA/km/ton, based on a journey of 180 km

10. Source: 11th IRTG Report, 25 April 2010. Unofficial cost assessed per trip with 5 checkpoints on

average (2.68 checkpoints per 100 km, and $7.54 average bribe paid per 100 km, with approx.

200 km from Dakar to Kaolack)

11. Orbus fees are assessed on a per-document basis, however, only the first three documents are charged, typically amounting to 2,500 FCFA per import.

12. 0.2% of the CIF value of all imports by ocean (except for a few strategic goods such as medicine).

13. The Freight forwarding fee used for the containerized shipment is based on a through Bill of

Lading for a transit shipment of rice. In Senegal, most freight forwarders assess their fees based

on a percent of the goods' value (some basing it on commercial invoice value, others on CIF

value), depending upon the nature of the goods, which is typically less than 1%. Because freight

forwarding fees are considered confidential due to competitive reasons, only two forwarding

agents provided costs – one for a containerized shipment, and one for a bulk shipment.

Therefore, the costs provided for the freight forwarding cost category may not be

representative of market prices for this service.


46

Rice Transit Costs

Figure 12 Transportation Costs - Rice Transits to Mali


47

Explanatory Notes:

1. For containerized cargo, the handling fee for containerized cargo is 71,106 FCFA per 20 ft

container of up to 10 tons; thereafter the handling fee is assessed based on metric ton, at a rate

of 5,001 FCFA/ton.


3. Currently, weighbridge fees are only assessed on bulk shipments

4. Customs physical escort and "Travail Supplementaire" fees are assessed for road transits to

Mali. There is a lack of transparency regarding the shipments selected for a physical escort.

Senegal Customs maintains that the need for an escort is determined based on the sensitivity of

the merchandise; private sector operators maintain that all shipments must pay these fees,

even if the escort does not always accompany the shipment. The need for a physical escort is

understood to be caused by the lack of an effective way to install Customs seals to enable

verification that the shipment has remained intact during transit. Senegal Customs is currently in

the process of piloting GPS electronic tracking devices that are intended to replace physical

escorts.

5. TRIE fee is 0.25% of the value of the shipment (by road), payable to the Senegal Chamber of

Commerce for the Senegalese portion of the transit; and 0.25% of the value of the shipment,

payable to the Malian Chamber of Commerce for the Malian portion of the transit. Since an

average value of a shipment of rice was unavailable, this charge cannot be calculated; however,

it's important to note that the charge is considered high by many of the economic operators

interviewed, especially for high-value shipments, making the use of rail preferable. There is a

lack of transparency as to whether the 2002 bilateral agreement between Senegal and Mali

regarding transits, which was modeled after the ECOWAS TRIE agreement, is actually

implemented in Senegal. (See Appendix B for a detailed description of TRIE and the bilateral

agreement on transits)

6. Source: 11th IRTG Report, 25 April 2010

7. There are three official payment points that charge official fees for maintenance of the roads;

the fees are 5,000 FCFA for small trucks or 1,000 FCFA/axle for large trucks. The charge was

calculated based on 3-axle trucks

8. Unofficial costs include 5,000 FCFA to expedite processing at the border, and 20,000 FCFA to

process the shipment without the official signature of the physical escort from Senegal Customs,

who often does not accompany a shipment but is required to sign the documents in order to

validate the transit declaration.

9. Only if shipment is not covered by a through BOL. Payable to Conseil Malien de Transport

Routier

10. Based on 500 FCFA/ton

11. It is assumed that the Mali Shippers' Council (Conseil Malien des Chargeurs or CMC) charges

comparable fees for the Malian Cargo Tracking Note and for all imports as the Senegal Shippers'

Council (Conseil Senegalais des Chargeurs or COSEC), since they are based on a standard issued

by the Union of African Shippers' Councils. Since the exact fees assessed in Mali were not

available, the same fees as Senegal were used


48

12. The Freight forwarding fee used for the containerized shipment is based on a through Bill of

Lading for a transit shipment of rice. In Senegal, most freight forwarders assess their fees based

on a percent of the goods' value, depending upon the nature of the goods, which is typically less

than 1%


49

Cotton Export Cost

Due to lack of response from forwarding agents based in Mali, the costs for cotton exports from Mali are

not comprehensive, and are based on a number of assumptions. The costs are a best estimate based on

information gathered from forwarding agents and other private sector operators based in Senegal.

Figure 13 Transportati on Costs - Cotton Exports from Mali


50

Explanatory Notes:

1. Source: 11th IRTG Report, 25 April 2010.

2. There are three official payment points that charge official fees for maintenance of the roads;

the fees are 5,000 FCFA for small trucks or 1,000 FCFA/axle for large trucks. The charge was

calculated based on 3-axle trucks

3. Road transport fees are based on the assumption that the same freight rates are applicable for

outbound transport as for inbound transport. 35 FCFA per metric ton per milometer are

assumed to be a reasonable estimate.

4. The author was unable to obtain the fees for transporting cotton by rail from Bamako to Dakar.

5. The author was unable to determine the Customs declaration processing fee charged by Mali

Customs. The fee charged by Senegal Customs is considered a reasonable assumption.

6. TRIE fee is 0.25% of the value of the shipment (by road), payable to the Senegal Chamber of

Commerce for the Senegalese portion of the transit; and 0.25% of the value of the shipment,

payable to the Malian Chamber of Commerce for the Malian portion of the transit. Since an

average value of a shipment of cotton was unavailable, this charge cannot be calculated;

however, it's important to note that the charge is considered high by many of the economic

operators interviewed, especially for high-value shipments, making the use of rail preferable.

There is a lack of transparency as to whether the 2002 bilateral agreement between Senegal and

Mali regarding transits, which was modeled after the ECOWAS TRIE agreement, is actually

implemented in Senegal. (See Appendix B for a detailed description of TRIE and the bilateral

agreement on transits)

7. Customs physical escort and "Travail Supplementaire" fees are assessed for road transits. The

need for a physical escort is understood to be caused by the lack of an effective way to install

Customs seals to enable verification that the shipment has remained intact during transit.

Senegal Customs is currently in the process of piloting GPS electronic racking devices that are

intended to replace physical escorts.


9. The Customs stamping fee is optional, for declarants wishing to receive proof of export

10. Freight forwarding fees are calculated as a percent of the goods' value, depending upon the

nature of the goods, and is typically less than 1%. Since an average value of a shipment of cotton

was unavailable, this charge cannot be calculated

11. Based on 500 FCFA/ton

12. The following fees, charged by Senegal Customs, are not included in the calculation

a. Certificate of stuffing – 10,000 CFA

b. Certificate of vessel loading–5,000 CFA

Warehousing and Storage Costs

Although the soon-to-be-operational Logistics Platform outside the Port of Dakar may alleviate some of

the problem, in general economic operators complain that there is insufficient warehousing capacity in

Dakar (and the situation is even more acute in rural areas, discussed later in this document). Insufficient

capacity increases the cost of storage, forcing some traders to use containers for storage, therefore


51

immobilizing them for longer periods of time, decreasing their utilization, and increasing costs36.

Storage, however, is often necessitated by the lack of transport capacity – mostly by rail, but also by

truck, where there can often be an insufficient capacity of trucks in good condition.

In general, warehousing is provided at the Port of Dakar, at EMASE, and at other privately-owned and

operated warehouses and Container Freight Stations (CFSs).

� Port of Dakar – Customs bonded warehouses at the port are operated by Customs-approved

companies

o Free storage: 10 days for imports to Senegal; 21 days for transits to Mali; 14 days for

exports of cotton from Mali; up to 5 days prior to vessel departure for all other exports

o After the free period, storage is charged based on commodity type. For rice, the charges

are:

� For up to 15 additional days – 176 CFA/ton/day;

� For up to 15 additional days - 511 CFA/ton/day;

� For up to 15 additional days - 611 CFA/ton/day;

� and so forth, with the daily charge getting progressively more expensive

o Warehousing capacity at the port is increasing, with the expected opening of a Logistics

Platform with a capacity of 40,000 m2 (60,000 m2 total, including open storage), and a

fruit terminal with a capacity of 5,400 m2 or 45,000 m3

� EMASE – warehouses and open storage inside and just outside the Port of Dakar, operated by

the Government of Mali (specifically, the Ministry of Transport)

o Mali Customs bonded warehouse (located within the port) - 2,250 m2 capacity, 17,000

m2 open storage

o Warehouse dedicated for cotton exports in bulk - 30,000 m2 capacity, 7,000 m2 open

storage

o Free storage: 21 days for Malian imports; 30 days for cotton exports from Mali

o After the free period, storage fees are:

� 60 CFA/ton/day for imports of cereals;

� 80 CFA/ton/day for imports of other goods;

� 20 CFA/ton/day for imports of charity goods;

� 40 CFA/ton/day for exports of cotton

� Other warehouses

o Bonded warehouses for rice operated by Customs-approved companies

� average dwell time - 30-45 days

� average charge - 750 CFA/ton for 30 days of storage

o ENSEMA – the dry port in Bamako has 14 hangars (of which 2 are refrigerated), with a

storage capacity of 70,000 tons

36

A new regulation by the GoS, however, will allow transport and logistics companies to charge for excessive container usage, and is expected to be the impetus for traders and other economic operators to improve their logistics operations.


52

Summary of Observations

Perception of transport and logistics costs among the trade community was generally favorable, with a

few notable exceptions:

� Port fees are universally considered excessive, especially for containerized shipments, and even

more so for Senegalese imports - 29% of total transport and logistics costs for imports to

Senegal vs. 9% for imports to Mali

� Storage fees are considered high, and are generally attributed to insufficient capacity

� Delays for transport by road, due to harassment along the corridor (at checkpoints) and at the

border, with informal costs amounting to up to 5% of the total transport and logistics costs

� Rail is too unreliable and perceived to be biggest lost opportunity

� Certain costs associated with road transport – Customs escorts and guarantee costs for transit

shipments – are high

Cost Component Observations

� Since DPW, port operations greatly improved but port fees perceived as high

� Small payments to facilitate faster delivery � Although not significant, delays sometimes occur

– Terminal congestion =>3-4 days at port – 50% inspection rate – Customs clearance within 24 hrs (2-48 hr range) – Agents’ inefficiency & paper-based process causes delivery

delays

� Rail is too unreliable; perceived to be biggest lost opportunity/issue � Perception about road transport: cheap for food products; expensive

for others � Transit escorts � New truck capacity � Unofficial costs for road are high(30-40K/truck) � 40 checkpoints, road delays can be significant � Perceived as most challenging segment

� Second biggest concern for industry � Road formalities more complex than rail � TRIE not well implemented � Delays can be significant

– 2-3 days on average – Often caused due to shipment arriving before the documents – Different business hours for SN-ML posts – Insufficient resources (agents, scanning equipment) – Lack of parking causes wait lines


53

Cost Component Observations

� Transit escorts � Malian trucks have ≈100% market share � Senegalese trucks come back empty � When Senegalese fleet becomes competitive, would have to enforce

the bilateral freight sharing agreement � Checkpoints cause delays and bribes � Escorts by convoy cause delays

� Storage fees perceived as high � Preferential rates with Mali (storage and port fees higher for Senegal

imports) +EMASE � Insufficient warehousing capacity, esp. outside Dakar � Unofficial costs were not identified � Warehousing necessary when there are delays due to transport

capacity – especially acute for rail shipments


54

Challenges

Senegal’s challenges with regard to trade and transportation in general, and along the Dakar-Bamako

corridor in particular, can be organized in six main categories: policy, infrastructure, logistics industry

services, border management, enforcement and integrity, and commitment and implementation

capacity.

Policy

Senegal’s progress to date is substantial, and the country has demonstrated a commitment at the

highest levels of government to make changes in its trade and transport environment. Recent activities

such as the port modernization, Customs modernization, and investments in road, airport, and

warehousing infrastructure, especially around Dakar, demonstrate that the GoS recognizes the

importance of trade and transport to Senegal’s economic development, and Senegal’s unique

opportunity to leverage its strategic location as a transport hub for West Africa.

However, the GoS lacks an overarching sector-wide transport and logistics strategy, relying instead on a

point-solution approach to transportation capacity planning. The proliferation of ongoing programs,

projects and initiatives underscores the fact that the country’s leaders recognize that transportation is a

priority, however it also suggests that transportation capacity planning is more tactical than strategic.

One reason for this state of affairs is the structural makeup of the Senegalese government institutions. A

transportation modal separation exists within the government, and different agencies have jurisdiction

and responsibility over different modes of transport. There is no government component that views and

plans for transportation as an overall sector, and this segregation leads to a lack of coordination and the

absence of a sector-wide strategic approach. The consequences of insufficient coordination have led to

inadequate intermodal infrastructure, delays in projects due to interdependencies with other projects,

and, moving forward, potential for inaccurate total capacity planning.

Another policy area where Senegal is experiencing difficulties is in managing its strategic relationship

with Mali with respect to trade and transport. Mali is a landlocked country, but it also seems to have a

fair amount of clout, and choice within the region as to seaport facilities. Mali has used its clout to

negotiate favorable agreements and other concessions that, while benefitting the landlocked country,

may have an impact on the competitiveness of the transport sectors of both countries. A specific

example of such an agreement is the Memorandum of Agreement on Road Transport between Senegal

and Mali, which reserves 2/3 of all Mali-bound freight passing through the Port of Dakar for Malian

transport providers.

Infrastructure

Senegal has a functioning transportation network, especially when it comes to serving the main

transport artery, the Dakar-Bamako corridor. The main nodes include the recently renovated seaport, a

main road (Dakar-Kaolack-Tambacounda-Kidira-Kayes-Bamako), a second road to be completed within a

year (Dakar-Kaolack-Tambacounda-Kedougou-Saraya-Kenieba-Bamako), a railroad, and other facilities in

various stages of completion (e.g., Logistics Platform, Special Economic Zone). However, despite a recent

surge in road construction and rehabilitation, challenges remain.


55

Rail

Despite being the only country with a rail link from its seaport to Bamako, Senegal has severely

neglected its great transportation asset. Whereas in the past 80% of the Mali-bound freight was

transported by rail and 20% by road, in the last five years the proportion has been reversed to 20/80.

The deteriorating freight rail network has reduced freight rail capacity and placed a significant strain on

road transport. The rail network has been facing various managerial and technical problems for a long

time, and insufficient investment has led to inadequate infrastructure to meet existing demand.

Examples include:

� Outdated infrastructure (e.g., rail tracks) that often breaks down, causing delays in freight

movement, or even accidents. The frequency of such occurrences severely decreases reliability,

which in many cases is more important to traders than strictly cost

� Equipment shortages (e.g., rail cars) causes delays, causing cargo to be stored immobilized, thus

forcing traders to bear higher inventory carrying costs (and sometimes direct storage costs)

This is a lost opportunity for Senegal, particularly because transportation by rail is cheaper than

transport by road, not necessarily because of lower direct transport costs, but mostly due to costs

related to border crossing and transit procedures. Specifically, benefits of transport by rail over

transport by road include:

� No Customs escort fees

� No TRIE guarantee (a total of 0.5% of the value of the goods) – this is a particular selling point

for high value goods

� No checkpoints en route

� Easier Customs procedures

� Much shorter clearance times at the border

Road

Although the direct Dakar-Bamako corridor is well served by road, there is a lack of or insufficient rural

and feeder roads linking production sites to the main transport arteries. Although not as relevant from

the perspective of the landlocked country, this challenge is of particular import for the PCE project. As

Senegal ramps up local agricultural production, it needs to have a corresponding increase in feeder road

capacity. The lack of rural roads or, alternatively, the poor condition of rural roads prevents many

farmers from transporting their cargo from the field of production. As a specific example, mangoes from

the Casamance region are at particular risk of spoilage due to excessive wait times for a means of

transport, caused by the lack of good roads to the production sites. Often, up to 50% of the harvest can

be lost at the field of production.

Another potential issue is the prevalence among Malian transport operators of very large capacity trucks

that are significantly overloaded, therefore degrading the roads at an accelerated rate, and increasing

the need for road maintenance. Senegal and Mali have agreed to implement the WAEMU axle-weight

limit regulations, Mali has already installed five weighbridges at its border crossings, and Senegal is


56

going through a competitive bid to outsource the installation of weighbridges. However, given that the

Malian trucking industry has recently upgraded its truck fleet, it remains to be seen how successful the

countries would be in enforcing this regulation, thereby protecting their road infrastructure

investments.

The state of the trucking fleet has an impact on the cost of transporting goods in transit to and from

Mali in a way that may not be immediately obvious. The poor condition of all but the trucks operated by

large multinational logistics companies prevents Customs seals from being effectively attached to them.

The ability to secure trucks carrying goods in transit is a requirement for the implementation of the TRIE

(both the bilateral agreement between Senegal and Mali and the WAEMU-level convention on which it

is based). The poor condition of the fleet therefore stalls the complete implementation of TRIE and

causes both Customs agencies to resort to a costly alternative to secure transit goods – namely, physical

Customs escorts. For a transit shipment, this amounts to $358 – not an insignificant amount. (This

amount does not apply to rail shipments)

Support Facilities

In a similar fashion, investments in warehousing and storage have been made, both in Dakar and in

Bamako. The ENSEMA dry port provides storage and warehousing facilities in Bamako, and Dakar has a

number of warehouses and container freight stations, with the Logistics Platform coming online soon,

and the Port of Dakar building fruit and grain terminals. From a direct Dakar-Bamako perspective, the

corridor is relatively well served with respect to storage and warehousing.

However, outside the main artery, Senegal has few dedicated facilities for support services, specifically

for agricultural and perishable goods, such as packaging facilities, cooling/refrigerated storage,

refrigerated trucks, and cooling stations along secondary roads or at production sites. As in the above-

mentioned example of mangoes produced in the Casamance region, the combination of pick-up delays

and lack of warehousing facilities (and particularly refrigerated facilities) causes spoilage rates of as high

as 50%.

Insufficient storage facilities also cause economic operators to store cargo in containers or rail cars, thus

immobilizing critical transport equipment, causing capacity issues and raising costs.

Services

Senegal is in the early stages of developing a transport and logistics “culture” of understanding how its

domestic transport and logistics markets operate in a global supply chain context. The transport and

logistics services industry is defined as the network of public- and private-sector intermediaries that

support freight logistics channels. Examples of services provided include warehousing, distribution

centers, cross-docking, goods insurance, consolidation and deconsolidation, customs brokerage and

information system value-added networks. Except for a few multi-national companies that operate out

of Dakar, the domestic transport and logistics services industry still needs to mature.

A key challenge for Senegal is improving its trucking industry to better support robust global trade

markets. The local industry is comprised of individual operators who often own just a few trucks, have


57

few IT capabilities, and offer few value-added services. Add to these challenges the fact that the

domestic industry, on the whole, operates an obsolete fleet and has poor fleet utilization (specifically

with respect to outbound shipments from Mali), and the result is a sector that is not competitive and

lacks professionalism.

Another challenge that Senegal has only now begun to address is creating capacity to provide value-

added services such as consolidation, intermodal exchanges, and information systems.

Border Management

Senegal has achieved impressive success with the reform of its Customs administration. The time to

import has been reduced from 20 days in 2008 to 11 days in 2010 and the time to export has been

reduced from 26 in 2008 to 14 in 201037. Typical Customs clearance times have been reduced to less

than 24 hours, and can be as low at two hours. Yet, upcoming reforms are likely to yield even greater

results, as Customs migrates its Gainde 2000 system to Gainde 2010 as part of its “Paperless” project.

(Note: the Doing Business/Trading Across Borders indicators measure only the procedural requirements

for exporting and importing by ocean transport; inland transport and inland border procedures are not

taken into account; therefore these indicators do not accurately reflect the state of transport along the

entire corridor).

However, until Gainde 2010 is successfully implemented, Customs and industry still have to navigate

border management processes that are paper-based and manual. This greatly extends the time and

effort required by industry to complete the steps required for formalities. Implementation of Gainde

2000 is also not uniform, i.e. not all border posts use the same system, nor are they connected to each

other, which means that Customs has no central data repository and therefore cannot keep

comprehensive trade data statistics.

The full implementation of Gainde 2010, which is scheduled to utilize EDIFACT, will enable the electronic

exchange of data with industry, and can be expected to eliminate, or at least reduce, delays associated

with the printing and presentation of hard copy documents, and data entry or transmission errors. Fully

automated Customs procedures should reduce Customs clearance times even further, and there are

plans to implement a reduction in the number of inspections from 50% of all imports to 15% (although

this is still high when compared to best practices of less than 5%). The challenge that Customs faces with

its multiple ongoing modernization projects (including, in addition to the “Paperpless” project and

Gainde 2010, projects on simplified procedures, Authorized Economic Operator, and integration with its

Single Window front end) is one of commitment and change management. Many automation projects

fail because of a lack of change management, and expected productivity and efficiency gains are not

realized because the system is not utilized as envisioned. Unless the multiple Customs modernization

projects are coordinated and accompanied by a change management initiative, advances in border

management might fall short of expectations.

Senegal also experiences excessive delays at the border with Mali, which can be attributed to five main

root causes:

37

Doing Business 2010, Senegal


58

� Inadequate staffing

� Insufficient equipment (especially scanning equipment)

� Lack of joint border processes, compounded by different opening times in Mali and Senegal

(although there are plans to implement joint border processes at the new Southern border

crossing and later at Kidira/Diboli, implementation timeframes are unclear)

� Congestion on the road caused by lack of parking facilities

� Poorly implemented transit guarantee agreement (see appendix B)

Enforcement and Integrity

As the results of the 11th Improved Road Transport Initiative report demonstrated, Senegal and Mali are

still struggling to combat integrity along the corridor. The corridor was one of the worst performers

among the six regional transport corridors monitored,38 with an average of 39.63 checkpoints per trip,

$111.23 in bribes, and 196 minutes of delay. Senegal led the list of countries by density of checkpoints

per 100 km, with 3.71 checkpoints per 100 km. Of the agencies responsible for the checkpoints, the

Gendarmerie led with 2.46 checkpoints per 100km, followed by the police (1.09), Immigration (0.12) and

Customs (0.04). Senegal alone was responsible for $71.22 in bribes paid per trip, on average. Yet,

Senegal is making progress. Both the number of checkpoints and bribes fell by 10% over the previous

quarter, as the results of the report had a sobering effect in Senegal and caught the attention of the

President and the Prime Minister, who have begun reforms in the area, and are scheduled to be

implemented by the end of 2010.

� Limiting the number of checkpoints along the Senegalese segment of the corridor to three

(around Dakar, Kafrinne, and Kidira)

� Harmonizing controls along the corridor and co-locating all agencies with the right to conduct

controls at the three previously defined checkpoints

� Instituting three zones around the checkpoints, with trucks receiving a sticker from the

Gendarmerie at each checkpoint that is valid for the entire zone

� Providing all Gendarmerie agents with a visible ID and equipping them with GPS devices

� Providing a toll-free number for transport providers to call in case of illegal controls

In July 2010, all WAEMU countries were scheduled to start enforcing axle-weight limits for trucks.

Although Senegal and Mali did not meet the deadline, they are well on the way to full enforcement, and

are expected to have it fully implemented by the end of 2010. Mali, in particular, has installed five

weighbridges at its main border crossings (together, handling over 90% of all traffic), and Senegal is

conducting a competitive bid proposal to select an operator for weighbridges along its segment of the

corridor. Both Senegal and Mali intend to co-locate the weighbridges at a limited number of control

posts along the corridor (at the time of writing, these are understood to be limited to three in Senegal,

one of which is at the Port of Dakar). However, given the preponderance for overloading of trucks to

reduce overall costs, and the recent renewal of the Malian fleet with trucks that are greatly over the

WAEMU limits (sometimes up to twice the limit), both Senegal and Mali are going to face an uphill battle

with the enforcement of this regulation. Additionally, if the Improved Road Transport Governance

38

Tema–Ouagadougou, Ouagadougou–Bamako, Lomé–Ouagadougou, Abidjan-Ouagadougou, and Abidjan-Bamako


59

reports are to be used as a guideline, it is likely that integrity would be an issue, with both truck

operators and weighbridge operators susceptible to corruption.

Finally, Senegal and Mali face a challenge in implementing the WAEMU TRIE agreement on the transit of

goods by road (see Appendix B). Not only have Senegal and Mali not implemented TRIE, but they have

signed their own bilateral agreement on the transit of goods by road, based on TRIE principles. Yet even

so, the agreement is not fully implemented, and industry faces a fragmented process, having to pay the

guarantee twice. Senegal and Mali are reportedly working on an electronic version of the transit

declaration (a single e-TRIE carnet, or State Road Transit Declaration) but that’s only one of the

requirements for the agreement to fully function. Senegal must first renew its truck fleet to enable the

attachment of Customs seals and the approval of vehicles according to TRIE criteria, and Senegal and

Mali must work out an arrangement for the collection and distribution of the TRIE guarantee funds. This

challenge is an important one, from the point of view of reducing the cost of transport along the

corridor, because the lack of a functioning TRIE agreement has caused Customs agencies in both Senegal

and Mali to resort to a costly alternative to secure goods in transit (by road) – physical Customs escorts,

which are very steep at $358 per shipment. The new Customs pilot to install GPS electronic tracking

devices on transit shipments is expected to alleviate the issue, however, it is important to remember

that those devices are meant only for tracking purposes, and cannot ensure that shipments are not

tampered with. Senegal’s challenge will be to ensure that these reforms are properly implemented and

coordinated without undue financial burden to the private sector.

Commitment and Implementation Capacity

While Senegal should be commended for making improvements, the country does not have a very good

record for long-term commitment and follow-through. Senegal has a veritable patchwork of regulations,

protocols, decrees, and decisions, and countless initiatives, committees, and working groups, yet despite

all the planning and good intentions, implementation often proves to be a challenge. Many projects are

never completed, or results are not achieved despite project completion. Senegal appears to have a

problem of long-term commitment as priorities shift.

The issue of long-term commitment is compounded by suboptimal coordination between interrelated

projects at the implementation level. The Senegalese government is in the midst of wide-reaching trade

and transport reform with many moving parts, which would not in and of itself be a cause for concern,

however, many of these projects do not appear to be well coordinated, and there are indications that

certain projects may be jeopardized as a result of other projects falling behind schedule. As an example,

the Dakar Integrated Special Economic Zone has missed a milestone because of a dependency upon the

Dakar-Diamniadio tollroad, which is behind schedule. Another issue is the fact that implementations are

often delayed or end dates become moving targets, resulting in confusion. During the course of

interviews conducted for this study, there was much conflicting information about projects and

initiatives, a challenge compounded by the lack of or difficult to locate official information about project

implementations and progress. To be sure, certain initiatives are well documented, such as for example

those spearheaded by the Investment Presidential Council, however, implementation challenges persist.

One reason for implementations petering out seems to be that accountability is poorly defined.


60

Recommendations

Senegal’s recent successes in trade and transport reform and investment should be a model for

continued growth to address remaining challenges. Senegal is already implementing or is planning

programs that will be highly beneficial in improving the cost-competitiveness of its transport and

logistics sector.

Figure 12 shows a framework that Senegal can use as a guide for its improvement and investment

opportunities in the transport and logistics industry. Recommendations in the Policy and Commitment

and Implementation Capacity are overarching and foundational in nature – any actual, lasting

improvements in the other categories are highly dependent upon sound policy, commitment at the

highest levels of government, and the capacity to follow through on project implementation until

successful completion and achievement of results.

Figure 14 Improvement Opportunities Framework

Policy

The Government of Senegal needs to develop a comprehensive transport and logistics sector strategy

and a related strategic plan that are holistic and integrated. Such a strategy must be country-wide, take

all modes of transport into consideration (including air, marine, road, rail, river, and intermodal), and

integrate with other sector strategies (e.g. trade, Customs, agriculture). A strategic approach should be

broad and forward-looking, encompassing all relevant stakeholders and subsectors (e.g., transport

providers, logistics/service providers, infrastructure owners), recognizing future trends, forecasting

demand and supply, and planning capacity accordingly. A sector strategy should recognize that benefits

from improvements in an area may not be possible or realized without improvements in other areas.

This suggests the need to adopt a prioritization approach as part of the sector strategy formulation. The

GoS should look into ways to centralize strategic planning for the entire transport and logistics sector,

while also providing a venue for industry to participate in the planning process. A strategic planning

lifecycle could be implemented, designed to update and revise the plan on a consistent basis, or as

needed based on changing priorities. A two- or three-year lifecycle may be considered a reasonable

frequency for such a mid- to long-term strategy; however, sections of the strategy may need to be


61

updated on a more frequent basis, such as annually. One option would be for the Government of

Senegal to require that the responsible Ministry revise the strategy every three years, and allow for its

update on an annual basis. To ensure progress against the strategy, it is recommended that the

responsible Ministry report on performance against strategic goals on an annual basis. The exercise of

measuring and reporting on progress will provide the added benefit of determining areas that may need

to be revised.

Going through a rigorous and disciplined strategic planning process would help the GoS balance its

priorities in a well-informed manner. However, for the strategic planning process to yield the most

benefits, firm commitment at the highest levels of government is required, as is the ability to shape

related policies, laws and regulations – i.e. this strategy requires stewardship and ownership at the

presidential or prime-ministerial levels, given the current government structure. The owner and

champion of the strategy needs to be able to exert influence over all government agencies involved and

be able to assign (and enforce) responsibility and accountability for results.

Donors and other NGOs could assist the GoS with the development of a transport and logistics sector-

wide strategy and with strategic planning in general through the provision of technical assistance and

capacity building support.

Commitment and Implementation Capacity

The above-mentioned transport and logistics sector-wide strategy would not be successful or have any

impact if it is not complemented by strong commitment to results, a solid capacity for implementation,

and a robust governance structure. To provide these capabilities, the GoS should develop a Program

Management Office (PMO) mechanism to oversee the implementation of the transport and logistics

sector strategy. (Note: Not to be confused with Project Management) A well-established PMO

mechanism would provide the governance and planning necessary to manage the GoS’s portfolio of

projects related to implementing the transport and logistics sector strategy A PMO would serve many

important functions in ensuring that the strategy is implemented in a holistic and integrated manner,

rather than haphazardly:

� Provide oversight and accountability and therefore drive the achievement of results

� Implement monitoring and control of projects

� Provide coordination and integration among dependent projects

o Act as a sort of Secretariat for strategy review

o Act as the main implementing body collecting the information required to periodically

assess program-level progress against the overall strategy

� Ensure effective executive cross-project communication

� Identify gaps in realization of strategic objectives and thus identify the need for new projects

In addition to providing the GoS the flexibility to change course with changing priorities in a controlled

manner, a PMO would provide change management capabilities, a necessity in Senegal’s current

environment of modernization and reform. In short, a PMO would be essential in ensuring that all of

Senegal’s impressive reform initiatives achieve the desired results in a coordinated manner. It is


62

important to note, however, that a PMO is not positioned to manage day-to-day activities; those are left

for project management. Since a PMO sits atop a portfolio of projects, existing project management

structures would not be disrupted. Therefore, a PMO could be created to integrate and coordinate

projects, and ensure that the portfolio of projects collectively implements the transport and logistics

strategy and strategic plan.

Donors and other NGOs could assist the GoS with technical assistance in standing up a PMO. Such

assistance could include the development of a PMO framework, help defining the program management

structure, creating implementation plans, definition and capacity-building in PMO-related disciplines,

and setting up governance. Donors/NGOs could also provide independent oversight and/or performance

management and evaluation, stakeholder facilitation and liaison expertise, and technical, managerial,

and/or financial assistance at the project level, at least on a temporary basis, until the PMO has built

sufficient capacity to operate independently.

Infrastructure

Rail. The GoS needs to improve its freight rail network, specifically in terms of capacity and reliability.

Doing so has the potential to create a viable low-cost option for traders. Senegal has already conducted

a feasibility study on converting rail infrastructure to the standard gauge. However, it is only the first of

many infrastructure upgrades that needs to take place in order to improve the rail network. In addition

to upgrading the rail tracks along the entire length of the corridor, the rail capacity in terms of rail cars

also needs to be improved. Intermodal links should be considered – currently the rail offers only direct

service from Dakar to Bamako. With intermodal links along the corridor, domestic or regional freight can

also take advantage of rail service. Recognizing the grim state of affairs of the rail network since its

privatization, this would be a challenging project, however, if Dakar is to grow as a regional hub, a

functioning rail alternative is critical.

As a first step, donors and other NGOs could assist the GoS with organizing and conducting a substantial

economic study to determine the feasibility, costs, and benefits of modernizing the Senegalese freight

rail network. Depending upon the results of said study, donors and NGOs could further provide the GoS

with technical or financial assistance to improve the rail network and services. Such assistance could

include advising the GoS in reviewing the terms of the Public Private Partnership arrangement with the

rail operator, Transrail, identifying areas that require improvement, considering options (including

renationalization), and assisting with the development and oversight of an action plan for improvement.

Roads. The GoS should invest in building rural and feeder road links from production sites to freight

networks. This is especially important from the viewpoint of the PCE project, because of the heavy

reliance of perishable goods on quick and reliable transport linkages.

Donors and other NGOs could provide the GoS with technical or financial assistance with the

development of a robust rural road network, specifically, in the areas of network analysis, needs

prioritization, implementation planning and program/project management. It is important that

investment planning be considered in a network context to fully understand interdependencies and be

able to prioritize the allocation of resources.


63

Logistics Support Structures. Another infrastructure investment that is of high importance to the PCE

project is the building of logistics support structures such as warehouses, consolidation facilities, or

other specialized storage facilities (e.g. refrigerated or cooling storage facilities), especially those serving

production sites.

Donors and other NGOs could provide the GoS with technical or financial assistance for the

development of a network of logistics supporting structures, specifically in the areas of network analysis,

needs prioritization, implementation planning and program management. Assistance could be provided

with identifying alternatives, such as, for example, establishing public-private partnership (PPP) or

financing frameworks.

Border Infrastructure. The Kidira-Diboli border crossing is heavily congested, and one of the main

culprits identified was a lack of parking facilities. With an unofficial statistic of 300 trucks crossing the

border daily, the pile-up of trucks along the road only exacerbates delays. The building of a parking lot to

move trucks off the road would be a “quick win” that should easily alleviate some delays at the border

at relatively little cost. The lessons learned at Kidira-Diboli should be used to inform the planning and

implementation of the second Senegal-Mali border crossing.

Additionally, to fully reap the benefits of Customs reform projects such as the Paperless project and

Gainde 2010 (see section below on Border Management), Senegal Customs must ensure uniform

implementation of these automation programs at all border locations. Senegal Customs must ensure the

availability of “soft” infrastructure at these border locations, including computer workstations, internet

connectivity, and all other computer support infrastructure and personnel necessary for the reliable

operation of required Customs systems.

Donors and other NGOs could provide the GoS with assistance in identifying a site for the parking

facilities, with project management of the construction, and assistance with procuring adequate system

infrastructure in support of Customs automation efforts.

Services

An important, although likely easily overlooked, component of the GoS’s strategy should be to increase

the competitiveness of its transport and logistics sector and in particular its road transportation

industry. Areas that require attention include the renewal of the country’s trucking fleet, investments in

intermodal exchanges, and the professionalization of the industry as a whole.

Donors and other NGOs are well positioned to assist the GoS with the professionalization and

competitiveness of the transport and logistics sector through technical assistance in the following areas:

� Improving business formation and operations, through the creation and facilitation of a small

business center that is specifically focused on the transport and logistics sector

– Education and best practices dissemination

– Industry outreach and liaison


64

� Evaluate options to encourage trucking industry operators to renew trucking fleets

– Financial incentives such as tax breaks, lower interest rates, rebates , leases (i.e. lease-

to-buy), or assistance with upfront capital expenses, such as providing seed funding

(Note: donors can assist the GoS in evaluating the options and recommending an

alternative, however the GoS will have to establish policy and mechanisms to enable

this reform)

– Provide services at the small business center to assist smaller operators with business

planning and procurement planning (e.g. Cost-Benefit Analyses, pricing, loan

applications, etc.)

� Promoting the continued use of information and communication technologies (ICT), and

specifically electronic data exchange

Border Management

Since Customs modernization is already underway in Senegal, most recommendations in this area are

related to efforts to ensure that the initiatives achieve desired results and conform to international best

practices. Therefore, as independent “honest brokers,” donors and other NGOs can play an important

role in advising Customs and other border agencies regarding their modernization efforts. Specific areas

of technical assistance include:

� An independent review (“health check”) of Customs modernization efforts, to identify potential

derailment areas, such as, for example, to:

– Ensure that Gainde 2010 and Customs Paperless projects meet industry requirements,

leverage industry best practices, and integrate with other systems as intended (this

includes areas such as electronic data exchange, risk assessment and inspections,

process integration, data/document requirements)

– Evaluate the implementation of the GPS electronic tracking project currently being

tested by COTECNA. Electronic tracking is touted as a secure alternative to Customs

escorts, however, those devices are meant only for tracking purposes, and cannot

ensure that shipments are not tampered with (which is a requirement of the TRIE

agreement). An independent evaluation of the project, assessing its benefits, and costs,

and the actual performance of the test against objectives is required; however, an

independent evaluation should also ensure that the project is requirements-driven and

not technology-driven, and meets the true needs of Senegal Customs and industry.

� Facilitation of private sector consultation and policy/regulatory impact analysis – in particular,

involve industry in providing input during the creation of new programs (e.g. AEO program,

Orbus upgrades, etc.) to ensure it is not faced with requirements that are overly burdensome,

and to solicit ideas for improvement


65

� Advise on and ensure conformance with international standards on automation, trade

facilitation, and security, e.g.:

– World Customs Administration (WCO) Single Window recommendation (Orbus)

– WCO SAFE Framework of Standards

– WCO Authorized Economic Operator guidelines

– WCO Data Model – the WCO Data Model establishes a standard, international,

harmonized data set that meets governments’ requirements for international cross-

border trade and is geared exclusively to the requirements of an automated

environment. By implementing the Data Model, Senegal Customs will harmonize its data

requirements, reduce redundant data requirements (such as, for example, the Cargo

Tracking Note), and transition from a document-centric Customs filing approach to a

data-set focus

� Assist with the implementation of the Customs modernization program at all border posts,

including the implementation of joint border controls and processes

� Fully implement the TRIE agreement, ensuring conformance with ECOWAS. Donor assistance

could include the development of a strategic plan, the development of an implementation plan,

liaison with industry and government agencies, program management, and monitoring and

evaluation of the program.

Finally, the GoS should consider taking a leadership position in the region by promoting a policy of

regional cooperation to create a single ECOWAS market. The elimination of borders within the region

will remove many of the barriers to efficient transport, not only along the Dakar-Bamako corridor but

also along other regional transport arteries.


The GoS should take steps to strengthen its enforcement and corruption fighting capacity, recognizing

that its commitment to enduring transparency, integrity, and effective enforcement require steady

leadership, an ability to monitor and evaluate progress, and the capacity to enact corrective action. This

recommendation rests on three pillars: prevention (“informed compliance”), enforcement, and

monitoring, oversight, and accountability. Informed compliance recognizes that many industry operators

are in contravention of regulations through a lack of understanding of the regulations. The enforcement

pillar takes into consideration all the components necessary to ensure that both public and private

sector entities are compliant with regulations, and in particular ensuring that the proper fines and

penalties are in place and are applied to discourage future non-compliance. Transparent monitoring,

oversight and accountability practices must be put in place to ensure proper enforcement and deter

lapses in integrity.

Donors and NGOs could assist the GoS in building “informed compliance” by providing education and

outreach to industry participants on new and existing laws, regulations and procedures. Assistance can


66

also be rendered to improve the enforcement of laws and regulations, specifically regarding checkpoints

and axle-weight limits and minimize integrity issues. This can be accomplished through, for instance,

setting up governance structures to enable and implement monitoring, oversight and accountability

capabilities among relevant government agencies, or by recommending options, such as the use of

automation, simplification or audit-based controls, to improve integrity. Finally, in the long-term, the

GoS should consider doing away with checkpoint-based controls altogether. Alternative means of

enforcing compliance with laws and regulations should be evaluated.

Concrete Cost Reduction Opportunities

Many of the recommendations in this section are longer-term policy and large-scale investment and

modernization initiatives that are important as Senegal builds capacity in its transport and logistics

sector. However, there are several short-term opportunities to reduce costs and delays along the Dakar-

Bamako corridor, actions that may be relatively easy to implement (also known as “quick wins”).

Category Action Benefit


Eliminate Customs escorts for transit shipments

� Cost savings of $358 per transit shipment

� Reductions in delays at the border due to document delays

� However, the GoS should consider the relative value of GPS cargo tracking devices intended to replace Customs escorts relative to their cost

Enforce the reduced number of checkpoints along the corridor

Cost savings of up to $120 per shipment

Infrastructure Build parking facilities at the border

Reduce congestion and delays at the border

Border Management

Fully implement Customs paperless processing and electronic filing (including transitioning from a document-centric approach to a data-set approach, thereby harmonizing data requirements)

� Potential costs savings of up to $40 (based on fees assessed per document)

� Reduce cargo dwell time at the Port of Dakar

� Potentially reduce freight forwarding fees

� Reduce border delays

Align the working hours at the border (to be followed by implementing joint border processes, mid- to long-term)

Reduce delays at the border due to handoffs between Senegal Customs and Mali Customs

Aim to reduce inspections at the Port of Dakar to less than 10%

Reduce the workload of Customs agents at the Port of Dakar and therefore decrease Customs clearance times (reducing the upper clearance time range limit


67

Category Action Benefit

from 48 hours) Table 7 Improvement Opportunities Quick Wins


68

Appendix A: Acronyms

AEO Authorized Economic Operator BOL Bill of Lading BSC Bordereau de Suivi de Cargaisons, Cargo Tracking Note CCIAD Chambre de Commerce, d’Industrie et d’Agriculture de Dakar, Dakar Chamber of

Commerce CCTV Closed Circuit Television CFS Container Freight Station COSEC Conseil Senegalais des Chargeurs, Senegalese Shippers’ Council C-TPAT Customs-Trade Partnership Against Terrorism DPW Dubai Ports World ECOWAS Economic Community of West African States EDI Electronic Data Exchange FCFA Frank CFA FOB Free on Board EMASE Entrepots Maliens au Senegal ENSEMA Entrepôts du Sénégal au Mali GoS Government of Senegal GOANA Grande Offensive Pour la Nourriture et l’Abondance, Great Agricultural Offensive for

Food and Abundance GoM Government of Mali GPS Global Positioning System ICT Information and Communications Technology LPI Logistics Performance Index PAD Port Autonome de Dakar PCE Project Croissance Economique, Economic Growth Project PMO Program Management Office TEU Twenty-Foot Equivalent Unit TIF Transit International Ferroviaire, International Convention to Facilitate the Crossing of

Frontiers for Goods Carried by Rail TRIE Transit Routier Inter-Etats des marchandises WAEMU West African Economic and Monetary Union WCO World Customs Organization


69

Appendix B: Policy, Legal and Regulatory Framework

Regional Organizations

The two principal institutions that influence transport policy in the region and therefore have direct

relevance to this study include the Economic Community Of West African States (ECOWAS) and the

West African Economic and Monetary Union (WAEMU). Senegal and Mali are members of both

organizations.

ECOWAS

The Economic Community of West African States (ECOWAS)39 is a regional group of fifteen countries40,

founded in 1975. Its mission is to promote economic integration in "all fields of economic activity,

particularly industry, transport, telecommunications, energy, agriculture, natural resources, commerce,

monetary and financial questions, social and cultural matters ....." Several regional policy and legal

instruments governing interstate transport and transit facilitation have been created under the auspices

of ECOWAS, discussed below.

WAEMU

Created by a Treaty signed in Dakar, Senegal, in 1994, the West African Economic and Monetary Union

(WAEMU) 41 an organization of eight states42 of West Africa established to promote economic

integration among countries that share a common currency, the CFA franc. WAEMU is a customs and

monetary union between some of the members of ECOWAS, which aims to create a common market

and customs union, and coordinate macroeconomic, sector, and fiscal policies in order to achieve

greater economic competitiveness.

Trade and Transport Agreements

Two main conventions characterize the road transport and transit policies of Senegal and Mali, within the framework of ECOWAS and WAEMU. These in turn have been supplemented over the years by scores of protocols and recommendations, mainly due to the slow progress made implementing these conventions among ECOWAS and WAEMU member states. In addition, a framework of bilateral agreements exists between Senegal and Mali. Inter-State Road Transport Convention (TIE)

43

The Convention A/P.2/5/82 regulating Inter-State Road Transport (TIE) was adopted by ECOWAS and

WAEMU, with the objective of establishing the conditions for inter-State road transport within ECOWAS.

Specifically, the convention aims to:

39

Communauté économique des États de l'Afrique de l'Ouest (CEDEAO) 40

Benin, Burkina Faso, Cape Verde, Core d’Ivoire, Gambia, Ghana, Guinea, Guinea-Bissau, Liberia, Mali, Nigeria, Senegal, Sierra Leone, Togo 41

Union économique et monétaire ouest-africaine (UEMOA) 42

Benin, Burkina Faso, Côte d’Ivoire, Guinea-Bissau, Mali, Niger, Senegal, and Togo 43

Transport Routier Inter-États (TIE)


70

• eliminate excessive road checks;

• ensure equitable access to the freight generated by the external trade of the contracting parties and harmonize the regulations concerning the highway code and transport;

• establish sufficient autonomy to ensure supplies to landlocked countries, in keeping with the transportation means of the transit countries.

To this end, the TIE Convention provides for the setting of annual quotas, by countries, of vehicles authorized to undertake inter-State transport; the setting of rules on the distribution of freight between transit states and landlocked countries, in respect of goods in transit and those placed on local markets in the transit countries; the setting of itineraries open to inter-State traffic; and the setting of axle loads.

WAEMU Axle Load Limit Regulation

Signed under the auspices of WAEMU in 2005, and in line with the provisions of the ECOWAS IST convention, the Regulation No. 14/2005/CM/UEMOA regarding Axle Load Limits sets up Axle Load Limit Policies and outline permissible load limits for different types of trucks. Enforcing axle load limits has posed a particular challenge in the region, with ECOWAS states only recently beginning to implement the requirements embodied in the convention and complying with the WAEMU regulation. Overloading trucks has been a wide-spread practice throughout the region, and many trucks have been heavily reinforced in order to carry excessive loads – a practice that significantly increases the tare weight of the trucks and therefore severely limits the weight of cargo that can be legally carried for the operators to meet the gross axle-weight limits. As of June 2010, all WAEMU countries had agreed to and were expected to begin enforcing axle-weight limits; however, at the time of writing, neither Senegal nor Mali had yet done so. Senegal has experienced delays with the installation of weighbridges, and Mali is faced with enforcing the rules on a newly-upgraded fleet that is much heavier than the regulations’ allowance. Nevertheless, Mali has installed 5 weighbridges, at border crossings with Senegal (at Diboli), Cote d’Ivoire, Burkina Faso, Ghana, and Burkina Faso via Togo, which together handle 90% of the traffic coming into Mali. Senegal, on the other hand, is going through a tender process for the selection of an entity to install and operate its weighbridge facilities along the corridor (expected to be co-located at joint control post facilities). It is expected that CCIAD will operate its existing weighbridge at the Port of Dakar for WAEMU regulation enforcement purposes. Both countries are expected to begin enforcement by the end of 2010.

Inter-State transit of goods by road Convention (TRIE)44

This agreement, the Convention A/P4/5/82 concerning inter-State transit of goods by road (TRIE) comprises economic or suspensive arrangements which allow goods to be transported by road, with all duties, taxes and restrictions suspended by the customs service of a given member state, to the customs agency of another member state, under cover of a single document (the State Road Transit Declaration, or Le Carnet TRIE), without any unloading. The TRIE declaration serves to:

• approve the technical characteristics of means of transport;

• identify the goods, the vehicle and the purpose of the transit;

44

Convention relative au Transit Routier Inter-Etats des marchandises (TRIE); not to be confused with TIE – Transport Routier Inter-Etats


71

• trace the itinerary and offices visited, including frontiers and destination;

• specify journey deadlines and other requirements with which the driver must comply;

• determine the scope of application of the transit arrangements and declaration (national territory, several frontiers);

• determine the liability of the principal obligee (carrier/forwarding agent);

• set the procedures applicable to cases of force majeure;

• provide statistical support and information for use in dealing with offences, settling disputes and effecting cooperation between customs services

However, ratification and actual implementation proved problematic, and an additional convention A/SP.1/5/90 was adopted, which defined a chain of national bodies responsible for the guarantee, with each national body designated by each member state. The supplementary convention also specifies that the guarantee should cover at least the sum of duties and taxes payable on the goods and any penalties that might be incurred. In ECOWAS Member Countries, members’ respective Chambers of Commerce45 assume the role of the national body. In practice, the ECOWAS-wide TRIE initiative’s success has been limited, due in part to the absence of a common regional guarantee system. About 70 percent of the transit procedures in the ECOWAS region still stem from bilateral accords and national regulations and practices46, which is still the case between Senegal and Mali. In 2002 the countries signed a bilateral agreement regarding the transit of goods by road, following the ECOWAS TRIE principles. The agreement stipulates that:

1) throughout the TRIE transport, duties and taxes due on the goods are suspended and secured by guarantee, which is to be paid at departure, and is to be in the amount of 0.5% of the CIF47 value of the goods (of which 0.25% is due to each Senegal and Mali, with the GoS collecting the entire amount, and reimbursing the GoM);

2) goods movement in approved vehicles or containers under customs seal, therefore eliminating the need for Customs escorts;

3) the State Road Transit Declaration or TRIE carnet is the single customs declaration for transport of goods, is taken into use in the country of departure, and enables Customs control in the country of departure, transit and destination

4) except at the Customs office of departure and the Customs office of destination, there would be no controls during transit

In reality, none of these items are functioning as intended and the agreement is effectively not implemented, particularly in Senegal, where the TRIE is optional. The sharing of the TRIE guarantee did not work as intended, and Mali now collects its 0.25% guarantee at the border. Information about whether Senegal collects the TRIE guarantee amounts was contradictory and unreliable, and no hard proof was available either way. Moreover, compulsory and expensive Customs escorts are still applied for nearly all transit shipments, the cost of which is covered by the economic operators. Ostensibly, the reasons for the continued usage of Customs escorts are identified as a lack of an approval process for vehicles, and the inability to secure the obsolete Senegalese trucks satisfactorily, but it is likely that the Customs administrations in both countries are unwilling to give up a lucrative source of revenue.

45

In Senegal – Chambre de Commerce d’Industrie et d’Agriculture de Dakar (CCIAD); in Mali – Chambre de Commerce et d’Industrie du Mali (CCIM) 46

Source: Global Facilitation Partnership for Transportation and Trade, www.gfptt.org 47

Cost, Insurance, and Freight is an internationally accepted INCOTERM


72

Senegal is currently piloting an electronic tracking program intended to replace physical escorts with GPS tracking devices, but it is still unclear what the cost implications of the new procedure would be for the trading community. Also, the electronic tracking project only covers the national territory of Senegal, with the devices removed at the border with Mali, therefore, its benefits would only extend to the Senegalese portion of the journey. Furthermore, the TRIE carnet does not function as intended, and is created and used at the border, making it unnecessary (Senegal uses a transit declaration S110 and does not issue TRIE carnets). Senegal and Mali are reportedly working on developing an e-carnet for TRIE but so far the carnet is only used in the territory of Mali. Finally, controls during transit are still a common occurrence, adding not only informal costs but also imposing delays on transit shipments.

ECOWAS Brown Card48

The Protocol A/P.1/5/82 establishing the ECOWAS Brown Card on transport insurance establishes the ECOWAS Carte Brune for the purposes of third-party civil liability motoring insurance. The carrier must take out third-party insurance to cover accidents caused by vehicles in member states. The Carte Brune functions on the basis of a joint guarantee provided by the authorized insurance companies. Both Senegal and Mali adhere to the Carte Brune agreement.

ECOWAS/WAEMU Regional Trade Facilitation Programme

The Regional Facilitation Programme was formally adopted by the Councils of Ministers of ECOWAS and

UEMOA in 2003. A Transport Facilitation Unit, hosted by the ECOWAS Commission, is tasked with the

implementation of the Regional Facilitation Programme. The programme was established to:

• Remove physical and non-physical barriers to ensure better flow of traffic and facilitation of

trade;

• Improve the maintenance of priority regional infrastructure

• Harmonize technical standards and safety regulations;

• Create regional physical facilitation infrastructures

Border crossings contribute to transit delays because of duplication of procedures, paperwork, and the

different operating hours. In recognition of the opportunity to improve efficiencies at the border, and

also building on the recommendations of WCO SAFE Framework, ECOWAS and WAEMU are taking the

lead for the establishment of joint border posts. Resolution 08/2001/CM provides funding for the

construction of 11 joint border posts, including a Kidira/Diboli joint border post. Implementation has

been slow, however, and for the moment a joint Kidira/Diboli border post remains in the early planning

stages. Similarly, ECOWAS and WAEMU are also pursuing the integration of customs automated systems

within member countries with the use of a single, uniform customs clearance document.

Improved Road Transport Governance (IRTG)

Another joint initiative undertaken by ECOWAS and WAEMU, in cooperation with the West Africa Trade

Hub, is the Improved Road Transport Governance (IRTG) program. The IRTG aims to reduce the delays

48

Carte Brune


73

and corruption at checkpoints that occur along transport corridors in West Africa and which negatively

affect West Africa’s competitiveness in world markets. With the help of volunteer truck drivers and

other transport stakeholders, the program monitors road barriers along major West African transport

corridors, and the delays and bribers transporters incur at these checkpoints.

Reduction of control points49

With a view to limit road checks for transit trucks, UEMOA adopted Directive 08/2005/CM/UEMOA on December 16th 2005. Containers, reefer trucks, tanker trucks, and all compliant trucks (according to the Inter-State Road Transit Convention) are to be controlled only at departure, arrival, and at border crossings; other controls are forbidden. In practice, this directive has not been implemented, and checkpoints proliferate along West Africa’s main transport arteries. As measured and reported in quarterly IRTG reports, in some instances checkpoints along the corridors are increasing. Most alarming for the purposes of this report is the poor performance of the Dakar-Bamako transport corridor. Data obtained from the 11th IRTG report for the first quarter of 2010 reveal that the Dakar-Bamako corridor had the largest number of checkpoints, which at an average of 39.63 are far more numerous than the next poor performer, Ouagadougou-Bamako, at 30,42 checkpoints per trip on average, and double the number of checkpoints of the Lome-Ouagadougou, at 19.4 checkpoints per trip. Of the countries surveyed, Senegal had by far the highest number of checkpoints per trip (25.28 on average), a 10.6% reduction over the previous quarter. Recognizing the growing problem caused by the rampant proliferation of checkpoints along the corridor, the GoS has issued a decree in 2009 outlining the reduction of checkpoints along inter-State road corridors. The decree intends to limit the number of checkpoints along its transport corridors to three, and calls for the co-location of the six controlling authorities at checkpoints, which are limited to the Police, Customs, Gendarmerie, Water and Forests, and sanitary, phytosanitary and zoosanitary authorities. Moreover, it is expected that the checkpoints will also house the weigh stations that Senegal has agreed to put in place in order to meet its enforcement obligations under Regulation No. 14/2005/CM/UEMOA. However, the decree is not yet in force, and there is a lack of clarity as to an implementation timeline.

Memorandum of Agreement on Road Transport between Senegal and Mali50

This bilateral agreement between the Governments of Senegal and Mali intends to harmonize the

countries’ respective policies in the area of road transport. It sets rules governing the road transport of

passengers and cargo between the territories of Senegal and Mali, including:

• Total vehicle weight and dimension limits

• Inter-state insurance (Brown Card) requirements

• Road controls

• Definition of the inter-State corridor

49

Arrete Primatorial Portant reduction des points de controle sur les axes routiers inter-Etats reliant le Senegal et les Etats voisins membres de l’Union Economique Monetaire Ouest Africaine (UEMOA) 50

Protocole d'Accord Relatif Aux Transports Routiers Entre Senegal et Mali


74

• Freight sharing arrangement51

• Authorization to transport

• Technical visit requirements

• Documentation requirements

International Rail Transport (TIF)

The TIF agreement defines the operational procedures for the rail network linking Senegal and Mali, and

the transit rules and procedures in their respective territories. The advantages of rail transport include

simplified customs procedures, which have been adapted from the International Convention to

Facilitate the Crossing of Frontiers for Goods Carried by Rail (TIF). There are no customs and police

inspections en route; Customs procedures have been simplified, and they are based on a single transit

document, the Transit International Ferroviaire (TIF) document, which accompanies goods from Dakar

to Bamako, thereby simplifying customs and administrative formalities and reducing related costs and

delays.

51

The arrangement sets the distribution of total freight tonnage passing through the Port of Dakar and destined to Mali such that 2/3 of the total freight tonnage is to be reserved for Malian vehicles and 1/3 is to be reserved for Senegalese vehicles


75

Appendix C: International Trade Statistics for Senegal and Mali

Unless otherwise indicated, all international trade statistics included in this appendix are sourced from

the International Trade Centre, a joint agency of the World Trade Organization and the United Nations,

and are, in contrast to the corridor statistics presented in the main body of this report, presented in US

Dollars, or value.

Imports

Cereals, and rice in particular, are the top agricultural imports in both Senegal and Mali.

Over the last five years, the value of

imports into Mali has been increasing

(Figure 13). The biggest increase is due to

increases in the import of mineral fuels

and oils, and nuclear reactors and

machinery. However, there has also been

an increase in the import of cereal

products, most notably rice, despite a dip

in 2007-2008. Imports of cereal products

are heavily dominated by imports of rice,

which accounts for 70 to 80% of all cereal

imports (10 to 15% of cereal imports are

wheat). Refer to Figure 14, which depicts

the value of the top ten products

imported into Mali over the period of 2004 – 2008.

0

500000

1000000

1500000

2000000

2500000

3000000

3500000

4000000

Importedvalue in

2004

Importedvalue in

2005

Importedvalue in

2006

Importedvalue in

2007

Importedvalue in

2008


76

Figure 15 Top Ten Products Imported by Mali

Imports into Senegal, meanwhile, declined in 2009 relative to 2008 (Figure 15). Much of this decline is

due to sharp decreases in the import of mineral fuels and oils, and cereals. Imports of cereal products, in

particular, experienced a 45% drop in 2009, much of it attributable to a 50% drop in the value of rice

imports. Whether this decline is due to the global financial crisis or the beginning of a trend remains to

be seen, particularly because imports of rice in 2008 were double 2007 levels.

Figure 16 depicts the value of

the top ten products imported

into Senegal over the period of

2005 – 2009. Imports of cereal

products are heavily dominated

by imports of rice, which

accounts for 70 to 80% of all

cereal imports (10 to 15% of

cereal imports are wheat).

0

100000

200000

300000

400000

500000

600000

700000

800000

Importedvalue in 2004





US

Do

lla

rs (

tho

usa

nd

s)Mineral fuels, oils, distillation products, etc

Nuclear reactors, boilers, machinery, etc

Vehicles other than railway, tramway

Electrical, electronic equipment

Salt, sulphur, earth, stone, plaster, limeand cement

Fertilizers

Pharmaceutical products

Articles of iron or steel

Iron and steel

Cereals

0

1000000

2000000

3000000

4000000

5000000

6000000

7000000






US

Do

llars

(th

ou

san

ds)


77

Figure 16 Top Ten Products Imported by Senegal

N.B. The statistics available for Mali and Senegal do not cover the same reporting periods, with the

latest statistics available for Mali covering the period through 2008. Therefore, it is not possible to

determine whether imports by Mali have suffered the same decline in 2009 as have imports by Senegal.

Exports

It is of some interest to note that

Malian exports are going up by value

(in general) yet down by

volume/weight (through Senegal).

The main reason explaining this

discrepancy is that exports in cotton,

the primary commodity exported

through Senegal, are going down,

and cotton is Mali’s second largest

export, both by value and by

volume. Moreover, there has been a

significant increase in the export of

precious stones, commodities that

are low in volume but high in value.

Figure 18 shows the increase in exports of precious stones and decrease in exports of cotton in the

period 2004 to 2008.

0

200000

400000

600000

800000

1000000

1200000

1400000

1600000

1800000

2000000

Imported valuein 2005





US

Do

lla

rs (

tho

usa

nd

s)Mineral fuels, oils, distillationproducts

Nuclear reactors, boilers,machinery

Cereals

Vehicles other than railway,tramway


Dairy products, eggs, honey, edibleanimal product nes

Animal,vegetable fats and oils,cleavage products

Iron and steel

Pharmaceutical products

Plastics and articles thereof

0

500000

1000000

1500000

2000000

2500000

Exportedvalue in

2004

Exportedvalue in

2005

Exportedvalue in

2006

Exportedvalue in

2007

Exportedvalue in

2008

US

Do

llars

, th

ou

san

ds


78

Figure 17 Top Ten Products Exported by Mali (by value)

Figure 19 shows that Senegalese

exports, while enjoying an increase

over 2007, have fallen in 2009.

Figure 20 suggests that this dip is

due in large part to a decrease in

exports of mineral fuels and oils.

0

200000

400000

600000

800000

1000000

1200000

1400000

Exportedvalue in 2004





US

Do

llars

, Th

ou

san

ds

Pearls, precious stones, metals,coins, etc

Cotton

Live animals

Nuclear reactors, boilers,machinery, etc

Mineral fuels, oils, distillationproducts, etc

Vehicles other than railway,tramway

Fertilizers


Oil seed, oleagic fruits, grain, seed,fruit, etc, nes


0

500000

1000000

1500000

2000000

2500000

Exportedvalue in

2005

Exportedvalue in

2006

Exportedvalue in

2007

Exportedvalue in

2008

Exportedvalue in

2009

US

Do

llars

, Th

ou

san

ds


79

Figure 18 Top Ten Products Exported by Senegal (by value)

Mali – Senegal Trade

Trade between Senegal and Mali is dominated by exports from Senegal into Mali, outweighing imports

on the order of 200% (as measured by value). In particular, salt, mineral fuels, and cereals, comprise the

top exports from Senegal to Mali. Following a sharp decrease in 2008, Senegal’s exports of rice to Mali

have increased four times, although it is too early to tell whether this increase represents the beginning

of a trend or is just a short-term anomaly.

0

100000

200000

300000

400000

500000

600000

700000

800000

Exported valuein 2005





Mineral fuels, oils, distillationproducts, etc

Fish, crustaceans, molluscs,aquatic invertebrates nes

Salt, sulphur, earth, stone,plaster, lime and cement

Pearls, precious stones, metals,coins, etc

Inorganic chemicals, preciousmetal compound, isotopes

Tobacco and manufacturedtobacco substitutes

Iron and steel

Aircraft, spacecraft, and partsthereof


Cereals


80

Figure 19 Exports of Cereals from Senegal to Mali

Senegal’s overall exports to Mali fell by 18% in 2009, again due to a decrease in exports of mineral fuels,

oils and distillation products. However, exports of salt and cereals, notably rice, have increased, as can

be seen in Figure 21.

0

5000

10000

15000

20000

25000

30000

35000

40000

Value in 2007 Value in 2008 Value in 2009

US

Do

lla

rs,

tho

ug

san

ds

Rice

Wheat andmeslin


81

Appendix D: Interviews

Government Agency

� Ministry of International Cooperation, Planning, Air Transport and Infrastructure52

� Department of Surface Transportation � Department of Internal Commerce � Ministry of Agriculture, Department of Analysis, Forecasting and

Statistics53 � Senegal Customs � Mali Customs � EMASE54

Industry Association

� Senegalese Union of Road Transport Workers55 � Senegalese Union of Road Transporters56 � Senegalese Council of Shippers (COSEC) 57

Traders & Transport

Providers

� Saga/SDV � Maersk/DAMCO � SNTT � SAFCOM � Moustapha Tall � Delmas � Transsene � MSC

Other

� Dubai Ports World � Senegal Chamber of Commerce (CCIAD) � Dakar Port Authority58 � COTECNA � Gainde 2000 � West Africa Trade Hub

52

Ministère de la Coopération Internationale, de l'Aménagement du Territoire, des Transports Aériens et des Infrastructures 53

Direction de l'Analyse, de la Prévision et des Statistiques (DAPS) 54

Entrepots Maliens au Senegal 55

Syndicat des Travailleurs des Transports Routiers du Senegal 56

Union Senegalaise des Transporteurs Routieres (USTR) 57

Conseil Sénégalais des Chargeurs 58

Port Autonome de Dakar


82

Appendix E: Other Sources

Investment Presidential Council, 9th Session, June 14, 2010

Senegal Investment Promotion Agency (APIX), http://www.investinsenegal.com/

Global Facilitation Partnership for Transportation and Trade, www.gfptt.org

United Nations Conference on Trade and Development (UNCTAD)

(http://www.unctad.org/en/docs/poldcd94.en.pdf)

“The Little Engine That Couldn’t”, by Myriam Cloutier, Wednesday May 20, 2009, accessed at

http://www.alternatives.ca/eng/our-organisation/our-publications/alternatives-international-

journal/2009-559/vol-02-no-1-may-2009/article/the-little-engine-that-couldn-t?lang=fr

World Port Source, http://www.worldportsource.com/ports/SEN_Port_of_Dakar_2295.php

OT Africa Line, http://www.otal.com/index.asp

International Trade Centre

11th Improved Road Transport Governance (IRTG Report)

World Bank Doing Business Indicators

World Bank Logistics Performance Index

Government of Senegal, www.gouv.sn

Agence Autonome des Travaux Routiers (AATR), www.aatr.sn