WASHINGTON, June 13, 2022—Burundi, the Democratic Republic of Congo (DRC), and neighboring countries within the Great Lakes Region of Eastern Africa are set to benefit from the new Great Lakes Trade Facilitation and Integration Project approved on June 9, 2022, by the World Bank’s Board of Executive Directors.
The $250 million International Development Association (IDA*) financing aims to facilitate cross-border trade and enhance the commercialization of selected value chains, primarily targeting small-scale and women traders in the borderlands of the Great Lakes region.
“Local cross-border trade, if properly facilitated, can be an important way to address poverty, food insecurity, conflict, and other socioeconomic vulnerabilities that populations in the border areas face,” said Dr. Chris Onyango, Director of Customs and Trade of the Common Market for Eastern and Southern Africa (COMESA). “We seek to reduce the cost and time to trade and improve the volume and quality of goods that are traded to boost incomes, prosperity, and stability in Burundi, the DRC, and the wider region.”
The project incorporates interventions combining policy and procedure reforms to address a mix of constraints related to poor infrastructure, insecurity, cumbersome trade requirements, poor handling of products post-production, and limited trust between traders and border agencies, among other factors. In addition to traders (particularly women and youth), beneficiaries include producers, trade service providers such as transporters and boat operators, market vendors in the border areas, port authorities and border officials, medium and small-scale enterprises, and trade officials in COMESA states.
COMESA will support regional coordination to maximize the positive spillovers of the project. While it focuses only on two countries, the project interventions are a practical implementation of the measures necessary to achieve the ideals and objectives of trade integration across Africa, both at the continental and regional levels.
“The African Continental Free Trade Agreement (AfCFTA) provides a solid policy platform for African countries to accelerate economic transformation, but it is at the regional level that many concrete actions are needed to address major constraints to trade integration,” said Boutheina Guermazi, World Bank Director for Regional Integration for Sub-Saharan Africa, the Middle East and Northern Africa. “This project brings specificity to local and regional constraints and provides solutions.”
The new project scales up many of the elements of previous and ongoing World Bank projects in the Great Lakes region. In addition to financing infrastructure at additional border posts, as well as ports and roads access, it addresses border communities’ lack of resources to improve trade facilitation by including specific support for value chain development and commercialization. The COVID-19 pandemic encouraged small-scale traders to work in associations, thereby improving their organization and enabling them to reduce their trade costs and potentially increase the quantity and quality of goods that can be traded. The new project will also build on these social structures.
An additional financing for the Great Lakes Trade Facilitation Project provides a grant of $23 million to the DRC to finance a resettlement action plan and modernize border infrastructure at Petite Barrière in Goma, North Kivu Province. On the border between DRC and Rwanda, Petite Barrière is the busiest pedestrian crossing point in the Great Lakes Region, handling more than 50,000 pedestrian crossings per day. More than three quarters of traders are women and there is also a significant community of people with disabilities who provide important services such as the transport of goods. However, trade has been constrained by poor and limited infrastructure. The additional financing will directly benefit these groups as well as hundreds of thousands of people residing in eastern DRC, Rwanda, and the wider region of East Africa.
* The World Bank’s International Development Association (IDA), established in 1960, helps the world’s poorest countries by providing grants and low to zero-interest loans for projects and programs that boost economic growth, reduce poverty, and improve poor people’s lives. IDA is one of the largest sources of assistance for the world’s 74 poorest countries, 39 of which are in Africa. Resources from IDA bring positive change to the 1.3 billion people who live in IDA countries. Since 1960, IDA has provided $458 billion to 114 countries. Annual commitments have averaged about $29 billion over the last three years (FY19-FY21), with about 70 percent going to Africa. Learn more online: IDA.worldbank.org. #IDAworks