How cooperation to remove trade barriers can boost prosperity for developing nations

A new cross border trade initiative between African countries shows the way forward says Linda Aaslien, Director of International Development, AECOM, a speaker at ACE''s forthcoming international conference


According to the Ordnance Survey, no point in the UK lies more than 70 miles from the sea. Living on an island it is hard to imagine travelling across another country to reach the ports that are the lynchpins of international trade.

That is the reality for 40% of Africa’s population, however, who live in landlocked countries like Botswana, Malawi, Zambia and Zimbabwe. In all, 15 African nations have no direct access to the world’s shipping lanes. Studies have shown they face 50% higher trade costs and as much as 60% lower trade volumes as a result.

Cost is not the only issue – time and complexity are barriers too, given the bureaucracy and delays that arise when moving goods across borders in some of the less developed parts of the world.

This is the type of complex challenge we face within the International Development team at AECOM. Working for agencies like the UK’s Department for International Development (DFID), Australia’s Department of Foreign Affairs and Trade (DFAT) and the United States Agency for International Development (USAID), we bring together government, industry and countless other stakeholders to overcome the obstacles to economic development in some of the world’s poorest nations.

We are currently working in over 150 countries on projects ranging from infrastructure development and public financial management to conflict mitigation and disaster relief. We also strive to improve the participation of women in social and political life, such as through assisting female entrepreneurs in countries where women’s opportunities can be limited.

The private sector has a vital role to play in international development. Bringing a global perspective and diverse networks of contacts, large companies can be a positive enabler in influencing and assisting national governments to set the agenda for economic development. And with a sharp focus on trade, corporations can pinpoint barriers to growth that, when removed, can significantly improve opportunities and prosperity.

Malawi, Zambia and Mozambique provide a case in point. Though the closest of neighbours – each shares a border with the other two – they behave like distant strangers from an economic perspective. The combined value of trade among the three nations in 2015 represented just 1% of their trade with the rest of the world. More than just a missed opportunity, this unnecessarily restricts GDP growth in all three countries.

Easing the exchange of goods across the three borders would clearly be of benefit, and not just to large exporters. Even small businesses can be severely hampered by lack of access to neighbouring markets, with a knock-on impact on economic prosperity.

The One-Stop Border Post (OSPB) established between Zambia and Zimbabwe illustrates the way forward. Facilitated by AECOM and the first OSPB in Africa, it has cut clearance time for commercial cargo from three days to just one. Similar successes include Mozambique’s Single Window system, an automated online process for declaring goods, which has dramatically simplified customs declarations and other red tape for small traders.

Development of the infrastructure that enables trade is another area where a global perspective can be vital. If one nation invests in road transport to the border while its neighbour prioritises rail, for example, they will not achieve the same scale of benefits of a more integrated plan.

A pragmatic, collaborative approach can facilitate cooperation. While industry is often perceived as having only a negative influence on the world’s poorest nations, in reality the private sector has an enormously positive role to play. Trade is the basis of economic prosperity and by unlocking access to new markets for local entrepreneurs, the private sector can be a powerful force for good.



You can find more about the ACE International Conference here