Cameroon Increases Customs Revenues by Implementing Performance Contracts

November 11, 2010

  • Cameroon piloted individual performance contracts to improve customs efficiency in the two largest customs offices.
  • The changes led to a decrease of clearance time and a US$15 million increase in revenues over six months.
  • Bad practices and corruption decreased.

YAOUNDE, November 11, 2010 – Cameroon’s customs improved efficiency and reduced bad practices at the two largest offices after adopting individual performance contracts.

In February 2010, 17 customs inspectors, along with the Director General of Customs Libom Li Likeng, volunteered to sign performance contracts. Indicators focused on two areas: trade facilitation, especially in terms of the speed of processing declarations, and combating fraud and bad practices.

Customs frontline officers signed a contract with the Head of customs in Cameroon, committing themselves to reaching thresholds and targets for eight indicators (four related to trade facilitation and four related to bad practices and fraud). Indicators have been monitored closely and results discussed during the process. At the end of each month, individual results were discussed between customs offices management and frontline officers.

Indicators that measured the improvement in trade facilitation include the percentage of declarations processed on the day of their registration, declarations processed five or more days after their registration, and those not processed within one month of their registration. 

Together, the two pilot offices represent more than 75 percent of the total revenues collected by Cameroon customs. Douala Port I is responsible for processing containerized imports intended for consumption and Port V is responsible for importing motor vehicles.

At the end of the six-month pilot at Douala Ports I and V, results exceeded expectations. Performance improved in all areas including trade facilitation, revenue collection, and combating fraud and bad practices. For example, at Douala Port I, 83 percent of declarations are currently processed on the day of their registration compared to 66 percent before the pilot.

Despite a decline in economic activity, the increase in the volume of declarations processed generated more than US$15 million in revenue increases in six months, all other things being equal. This argues that there is not a trade-off between trade facilitation and an increase in customs revenues, a point often disputed by customs officers who are not used to a performance-based culture.

The current management aims to develop a culture based on performance within customs as part of a broader push in Cameroon to modernize its public services. 

“We measure our performance based on the timeframes for processing declarations, trade facilitation, and dialogue between users and us. These elements, taken together, provide us with a road map,” said Samson Bilangna, the Head of the Information Technology Division. “Based on the budget law, we should generate revenue of CFAF 499 billion in 2010; that is, 24 to 25 percent of the national budget. Furthermore, our clients are our top priority; our most treasured asset.”

Customs have benefited in the last years from support  by the World Bank, through the regional Transit and Transport Facilitation Project in the Central African Economic and Monetary Community (CEMAC) Zone, the European Union, through the Program to Support the Customs Modernization Plan in Cameroon (PAMOD), the World Customs Organization with its capacity building initiative, and the United Nations Conference on Trade and Development (UNCTAD), which is responsible for the computerization of customs services.

This system of measurement helps improve customs overall performance.

“We have decided to implement performance contracts to correct the weaknesses we have experienced in the monthly monitoring exercise,” said Libom Li Likeng, director general of customs. “The prescriptive approach of performance contracts requires that the inspectors who enter into these contracts take the necessary steps to achieve the quantitative and qualitative objectives that we have jointly defined, namely, trade facilitation, combating fraud, and improving governance in our administration.

“We are happy to note that not only are our revenues increasing each month, in terms of quality and quantity, but our units have enhanced their efficiency and accountability, given the clear decrease in the volume of disputes,” said one customs office director. “Compared to the past, this contract has provided us with tremendous value added and led to a clear improvement in our working conditions.  Our partners are increasingly motivated and committed to achieving the objectives established in this partnership, including our users.”

The operators on the ground are also pleased with the performance contracts.

Furthermore, in the interest of transparency, the evaluation results for Ports I and V were made public.

Encouraged by this progress and confident about these strategic choices, the Customs Directorate has decided to extend performance contracts to two other offices in Douala. Several delegations from foreign customs administrations have already visited to review the progress and other office directors want to join the team under the new management contract.