Building a Single Customs Territory: a toolkit

The East African integration process has achieved considerable success in the past decades, and the East African Community is considered one of the most integrated regional economic communities in Africa. The EAC aims for Partner States’ markets to be increasingly connected, with the creation of a customs union, followed by a common market (with the final goal to set up a monetary union).

To operationalise the EAC Customs Union, in 2012 the Partner States decided to set up a Single Customs Territory (SCT). An SCT reduces internal border controls on the circulation of goods, and can lead to faster and better trade operations, reduced trade costs and times, improved revenue management, reduced smuggling and improved data collection.

Setting up the systems to implement the SCT required complex and extensive work, which was carried out by the East African governments but also by development partners, including TradeMark Africa (TMA). Understanding how the SCT came about in the EAC can provide lessons for others who wish to undertake similar steps elsewhere.

This toolkit aims to provide key considerations that should be taken into account when setting up an SCT. Describing the experience of TMA in the East African region, it unpacks the complexities to navigate when supporting such interventions.

Key recommendations

Countries establishing an SCT require a legal framework to deal with supranational issues. This is easier for REC members as they have an existing forum for legal discussions.
To establish an SCT, countries must consider revenue collection and sharing. Viable options include the SACU model, the EU collective use of revenue, or the EAC's 'destination model'.
For free circulation of goods, countries should consider establishing a new regional bond system or utilising an existing one. For the latter solution, options include the COMESA system or the TIR (Transports Internationaux Routiers), used in Europe and Asia.
The EAC has implemented measures to facilitate smoother transit and border crossings, such as the Electronic Cargo Tracking System and an Authorised Economic Operator (AEO) programme. However, there are alternative approaches, like the EU's risk-based customs management, which combines risk analysis and AEOs. The choice depends on technical capacity and willingness to delegate customs authorities.
Customs require efficient IT systems for effective information sharing among authorities. When establishing an SCT, countries should consider connectivity with other systems, data location, security, and the potential of open-source solutions to reduce costs.
Capacity development programmes are crucial, especially in regions with varying skill sets. In the EAC, TMA supported capacity-building initiatives to ensure all government officers could effectively implement the SCT.
Engaging enthusiastic stakeholders first streamlines organisation and encourages others to join. Understanding stakeholder goals informs key decisions in SCT setup.
In the EAC, local stakeholders are managed through political support for the SCT and the use of working groups for discussions on bilateral and multilateral matters.
When making key decisions on systems and processes, sustainability should be a priority. Development partners and funders should assess if the technologies and systems can be transferred to governments without long-term external intervention or financial support.