The World Bank Supports Afghanistan’s Customs Reform Efforts

June 11, 2015

Kabul, June 11, 2015 - The World Bank today approved an additional grant of $21.50 million to improve the effectiveness of customs clearance at border crossings and inland clearance depots (ICDs) in Afghanistan.

The additional grant from the International Development Association (IDA), the World Bank Group’s fund for the poorest countries, will build upon and expand the progress being made under the Second Customs Reform and Trade Facilitation Project (SCRTF), being implemented by the Afghanistan Customs Department (ACD) since May 2010.

Customs collections are an important source of revenue for Afghanistan. Since 2002, these have grown dramatically, rising from some $50 million in 2002-03 to more than $1 billion in 2012, and contributing more than 35 percent of revenues in 2014-15. Since 2012, however, the unprecedented political, security, and economic transition have affected Afghanistan’s economic growth. Domestic revenues, which had risen from 3 percent of Gross Domestic Product (GDP) in 2002 to 11.6 percent in 2011, fell to 8.5 percent in 2014; customs collections too stagnated over the last few years.

The project has helped computerize 14 customs offices so far, with the Khost office becoming operational recently. The automation of customs processes is through the adoption of Automated System for Customs Data (ASYCUDA). The project has also helped improve the physical environment for trade by building warehouses, parking areas, administration buildings, at various ICDs and border crossing points.

“The new Government has indicated its commitment to improving revenue collection,” said Bob Saum, World Bank Country Director for Afghanistan. “The Realizing Self Reliance: Commitments to Reforms and Renewed Partnership” paper presented at the London Conference on Afghanistan in December 2014 recognizes that continued reform efforts in ACD are critical to tackling the fiscal, integrity and governance challenges facing the country.  We hope the additional grant will result in improving overall customs performance, particularly in automation and collaborative border management, to ensure that legitimate goods are processed and released in a fair and efficient manner.”

The additional grant approved today will help finance costs associated with the continuation of existing project activities, supporting reform progress, and strengthening the prospects for long-term sustainability. Specific activities will include:

  • Rollout of automation to the remaining border crossings and ICDs as well as technological solutions to enhance surveillance capabilities;
  • Business process reengineering (BPR) to improve and simplify practices and procedures and strengthen efficiency and sustainability;
  • Continued refurbishment, rehabilitation or new construction of selected customs infrastructure;
  • Improving mechanisms for cooperation with neighboring customs administrations, including real time data exchange;
  • Further improvement and enhancement of systems for monitoring customs performance through the use of an automated executive dashboard and alerts mechanism; and
  • Provision of technical assistance and capacity building in key areas that introduce modern approaches to customs administration, including the design  of a National Trade Information Portal (TIP) and a National Single Window (NSW) system, support to the Customs Training Academy, and strengthening of Risk Management, valuation, enforcement and post clearance verification functions.

Note to editors:

The ASYCUDA World (Automated System for Customs Data) is a computerized customs processing system that automates declaration processing and related customs activities. The system handles manifests and customs declarations, accounting procedures, transit, and duty suspense procedures. ASYCUDA also generates data that can be used for national statistical purposes.  The ASYCUDA software is developed by UNCTAD and it takes into account the international codes and standards developed by ISO (International Organization for Standardization), WCO (World Customs Organization) and the United Nations, and WTO (World Trade Organization).

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Yann Doignon