In this episode of the World Bank Group's Trade Tips podcast, we explore how technology can transform global trade. We learn how digitization can make trade faster, easier, more transparent and predictable.
We hear from traders in Ghana and Vanuatu about their challenges, and from the World Bank Group's Alina Antoci about possible solutions.
Listen now! on your favorite platform.
Featured Voices
- Miishe Addy, CEO, , Ghana: ¡°Without efficient supply chains, the businesses in Africa who want to export will not be able to compete globally without technology.¡±
- Jonathan Naupa, owner, Tropical Rainforest Aromatics, Vanuatu: ¡°We have this Vanuatu electronic single window system for trade ¨C the first in the Pacific. It is working brilliantly.¡±
- Alina Antoci, Senior Trade Facilitation Specialist, World Bank Group: ¡°Technology makes trade faster, cheaper, and easier, but also more transparent and predictable." Alina Antoci, Senior Trade Facilitation Specialist @WorldBank. Listen now! #TradeTipsPodcast
Transcript
[00:05] Sarah Treanor: Hello and welcome to Trade Tips from the World Bank Group. I'm Sarah Treanor. This is the podcast where we tackle some of the big questions in trade and explore the solutions. In this episode, how technology can transform global trade?
Miishe Addy: Without efficient supply chains. The businesses in Africa who want to export will not be able to compete globally. They can't even compete within their own region.
Jonathan Naupa: We have this called this electronic single window system. We're the first in the Pacific. It's working brilliantly.
Alina Antoci: It makes trade faster, cheaper, easier, but also more transparent and predictable.
Sarah Treanor: We'll be exploring digitization across the world from Vanuatu to Ghana and getting the expert view from the World Bank in Washington, DC. All that and more coming up on the podcast.
Montage: Trade tips, trade tips, trade tips.
[01:05] Jonathan Naupa: I've got all these really nice fruit trees here now. And they've all started. My Tahitian limes are fruiting. My guavas are fruiting, wild raspberries.
Sarah Treanor: We're joining Jonathan Naupa, who's having a morning coffee in his lush green garden next to his plantation in the hills near the Pacific Island nation of Vanuatu's capital, Port Vila.
Jonathan Naupa: Mum and dad were the first interracial marriage.
Sarah Treanor: He's explaining how his parents, an English woman and a Vanuatu man, met.
Jonathan Naupa: Dad was the co-chair of our constitutional drafting committee. So he's recognized as one of the founding fathers of this nation. Mum was an educator and she's a bit of a national treasure. She's 83. Still driving around. Mad old English woman.
Sarah Treanor: Jonathan grows sandalwood, turmeric and exports Kava.
Jonathan Naupa: Kava is a traditional crop. So in Vanuatu we cultivated very heavy, heavy kavas because there was lots of fighting, lots of tribal warfare, and the only way to sort it out was to slow yourself down with kava and talk quietly over a problem. It's been used to commemorate births, to remember the dead, to deal arrangements. So people started commercializing it and they would just peel it, crush it, squeeze all the juice out. You add a little bit of water to dilute it because otherwise you'd be on your back, and then you sieve it to clean it.
Sarah Treanor: And it's drunk from bowls, which in Vanuatu are called shells.
Jonathan Naupa: We start at four o'clock in the morning. I'll shoot three till 3.30 4 when I've done my 12 hours. I'll have a hot shower. I'll sit down and I have a big shell and it'll be just like, wow. And I'm completely relaxed.
Sarah Treanor: John says that there's been an explosion of popularity.
Jonathan Naupa: The market's growing like crazy. I mean, in America where I export to, and to Australia, now that they've got a trial export period going, I'm working on microbial certification. You know, want to know there's no microbial issues. You want to know the size of the powder, you know, want to know the moisture content. Because I can tell you I'm giving you champagne, but I'll give you beer and no one will know the better. For Vanuatu to grow this product, we've got to brand it properly and we've got to accept that we have responsibility to deliver a genuine product. I plant in GPS located plots. We have a software program for what we're planning. I'm number two in Australia at the moment. The government's picked up on it and they're doing it slowly now. And I've got a good minister of agriculture. He's an agronomist, so he understands, and it's a matter to use a government lab for nobility testing. And that's it. So what I do is I send my product overseas, get it re-tested in an independent laboratory overseas.
[03:53] Sarah Treanor: One way life as an exporter has got easier is access to a system called an electronic single window. John explains.
Jonathan Naupa: We have this thing called the Vanuatu Electronic Single Window System. We're the first in the Pacific. It's working brilliantly. It's basically locking everything in and coordinating relationships between various departments: the customs department, the biosecurity department, and the VNBS - the Vanuatu National Bureau of Standards. And so we will apply on this electronic single window.
Sarah Treanor: John and I got cut off there, but he's back.
Jonathan Naupa: Sorry mate. What will happen is these people will give you a number. You then have to pay for the phytosanitary certificate. They will then test your kava and you have to have your kava ready. And then once they approve it, once the VNBS approve it, then biosecurity can approve it, then customs can approve it, then it goes green lane. Then you're freed up to export it.
[04:51] Sarah Treanor: There isn't the paperwork. You don't have to go from office to office to get your export certified.
Jonathan Naupa: Yeah, it's great. And you can grow it and add things to it. I'm adding product specifications to it, and it helps the government to understand what's being exported. Is the resource being utilized properly? But it's good.
Sarah Treanor: For John and others like him, it's a tough business, but digitized systems have improved his exporting experience. And he's committed to both kava and to Vanuatu.
Jonathan Naupa: But kava's going to save us, don't you worry. Funny place. This magical place this.
[05:38] Sarah Treanor: Let's now go to Ghana and hear how one entrepreneur is taking on inefficiencies in trade and developing technology solutions. This is the sound of Tema, a bustling port near Ghana's capital Accra. It's here that Miishe Addy has her HQ. Miishe's a busy person.
Miishe Addy: <laugh> unusually busy, but it's good. It's good to be busy.
Sarah Treanor: I managed to catch up with her while she was in Lagos, Nigeria.
Miishe Addy: I'm CEO of Jetstream Africa.
Sarah Treanor: I asked Miishe to explain a little bit about why she set up her business.
Miishe Addy: Jetstream was founded in the port city of Tema about 40 minutes away from the capitol of Accra in Ghana, one of the largest container ports in all of West Africa. Despite the presence of technologies that could have been applied to the logistics industry, there was almost no technology applied to the logistics industry in Ghana when we started. So everything was being done in cash and on paper. So the flow of money was mostly manual and the flow of information and of customs compliance was also mostly manual.
[06:57] Sarah Treanor: And what role did Covid play here? Tell me about that.
Miishe Addy: Covid definitely accelerated the future of digitization in logistics in Africa. There were lockdowns during the Covid period, which made it difficult for people to move around, including at the port. There was a quote on how many people could be inside a room with a customs officer at the same time. And that made the old-fashioned manual methods of clearing and moving cargo really inefficient. So for Jetstream, we took that opportunity to accelerate our own digitization plans, and we took some big risks in terms of building technology that we believed old-fashioned logistics services providers like freight forwarders and customs brokers. We believed they would use this technology, but we had no proof because they hadn't done it before. And that someone had to take the risk of building technology for these markets even though it hadn't worked successfully before.
[07:58] Sarah Treanor: You talk about various issues at ports which inspired you to set up Jetstream. Explain a little bit more about the issues with trade across borders, particularly in Africa.
Miishe Addy: Yes. So the cross-border trade process, I think it's important first to distinguish it from a domestic trade process. So if you are ordering a delivery on amazon.com or the equivalent here in Africa, jumia.com, that domestic trade is going to involve three or four vendors, three or four parties including you, your seller, the courier, and the platform where you buy your goods on. In the cross border process, there are a minimum of 11 parties, including the importer and the exporter. We've done some analysis to calculate the number of hours of financing, insuring, completing paperwork, transporting, waiting involved in a cross-border trade. And the total number of hours spent by those 11 parties is about 800 hours for a single cross border trade. And the problem with African supply chains is that even though incomes are lower here, even though that profit margins in many cases are lower here, our supply chains are the most expensive in the world and they tie up working capital for longer. They're the slowest supply chains in the world. So every day, African families, consumers are effectively paying a tax on the goods that they consume. And that tax is driven by the inefficiency of our supply chains.
[09:41] Sarah Treanor: And just how does Jetstream tackle this?
Miishe Addy: So we basically take over the entire supply chain on behalf of our customers. So we are basically an all in service provider or one-stop shop for our customers cross-border supply chains. So the 800 hours of cross-border trade activities, all of those workflows involve passing documents from one vendor to another vendor, et cetera. It's an extremely inefficient and mostly manual process. And the technology platform that we've developed, in addition to speeding up transactions involving money, it speeds up transactions involving information. So we have a standardized form that is the same for any shipment. It requires the same fields for every shipment. It reduces the manual errors involved in creating customs documentation and just speeds up the process of recreating shipments trade after trade.
Sarah Treanor: Jetstream is scaling up the business and expanding in West Africa. What's next?
Miishe Addy: We expect to be in almost all of the major ports on the continent by 2024.
[10:55] Sarah Treanor: Give me a sense of how important more efficient trade is for the continent.
Miishe Addy: Many of the governments in Africa are looking to the export industry. But without efficient supply chains, the businesses in Africa who want to export that are trying to industrialize will not be able to compete globally. They can't even compete within their own region.
[11:19] Sarah Treanor: So we've heard from a small exporter on a tiny Pacific island who has seen improvements to the way he does business thanks to technology, and from a business with big plans for modernizing African trade with its digital platform. But how much of an impact does digitization have?
Alina Antoci: My name is Alina Antoci. I've been with the Bank for over 18 years and worked on trade facilitation, border management and customs modernization projects in over 70 countries for now.
[11:51] Sarah Treanor: Alina, what's the benefit here? Why is it that digital platforms, like the one we heard about in Vanuatu, are adopted for trade?
Alina Antoci: When you increase the availability of trade-related information and also enable the submission of various documents electronically through various platforms, such as we have a trade information portal, we also have electronic single windows. This can facilitate and reduce the contact between traders and government officials. There is also some important research that actually looks from the World Economic Forum, World Bank and also Bain & Company, which looks at the adoption of electronic documentation. For instance, in the air cargo industry, which saves about 12 billion annual savings through reduced paperwork and some paperwork-related delays. When you think about it, implementing a single window can have enormous benefits for everyone involved: governments, customs, administrations traders, but also for the economy as a whole because it makes the trade faster, cheaper, easier, but also more transparent and predictable. For traders, for instance, you gave the example it delivers faster clearance times, lower operational costs. It also provides more transparent and predictable processes, and also less bureaucracy. For governments, for instance, it increases the compliance with the various trade rules, and also it provides better statistics. It reduces human to human interaction and therefore it reduces corruption.
[13:23] Sarah Treanor: And in terms of economies, what improvements can we see there?
Alina Antoci: Economies with full-time automated processing systems for customs agencies as well as any other electronic data exchange platforms that are in place, they take significantly less time to move exported goods compared to the ones where full automation is not implemented. And also in ports and customs automation makes the exporting process more efficient, like in an example from the kava exporter. So customs automation at ports and borders, again allows exporters to save time when dealing with trade logistics. And around the clock, automated processing systems, again, are a key factor to making that border compliance more efficient from the government perspective. For instance in Hong Kong, also their system estimated to bring improvements to the industry about of US$167 million. So what's important here for us, it's really that you can't just go out on the market and buy a national window. It's not really seen as a plug and play activity as an app that you can just get and install. So we also see, by the way, in many countries where implementation that hasn't been very successful has actually slowed down the clearance process.
[14:43] Sarah Treanor: So it's an investment, it takes time, it needs to be done properly. And when it isn't, the benefits aren't really there. But when it is, it's very much worth it. Is that right?
Alina Antoci: That's right. And exactly as you said, this is one of the measures under the WTO Trade Facilitation Agreement that tends to take the longest to implement, but it's also the most resource intensive. Yet it has increased benefits and many countries are committed together with the World Bank who provides that support to implement national single windows and digitize their trade processes and procedures.
[15:23] Sarah Treanor: John, Miishe, Alina, many thanks. It's been a fascinating look at how technology is improving trade. We hope you've enjoyed this episode of Trade Tips from the World Bank Group. I'm Sarah Treanor. We'll see you soon.
Presenter and Producer: Sarah Treanor
Executive Producer: Marisa Zawacki
Cover Art: Creatures Africa
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This podcast was created by the World Bank Group with funding from the Trade Facilitation Support Program (TFSP). The TFSP is funded by nine donor partners: Australia, Canada, the European Commission, the Netherlands, Norway, Sweden, Switzerland, the United States, and the United Kingdom. This initiative provides assistance to countries seeking to align their trade practices with the (WTO TFA).
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ABOUT THE TRADE TIPS PODCAST
This Trade Tips podcast tackles the big issues in the world of trade and explores solutions. In this new podcast from the World Bank Group, we take you on a journey around the globe ¨C from Vanuatu to Ghana, Jamaica to Nepal, London to Washington, DC. Through conversations with traders who are being affected by key issues like climate change, digitization, gender ¨C and experts offering cutting-edge solutions ¨C we highlight why trade matters and how it can be made more efficient. Don't miss an episode! on your favorite platform. Tell us what you think of our podcast here.
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