TradeMark Southern Africa
2011 Annual Review
Aide Memoire
October / November 2011
TMSA Annual Review, 2011
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1
INTRODUCTION
1.
Trademark Southern Africa (TMSA) is a DFID-funded programme aimed at
contributing to ‘Sustained rapid, inclusive growth and poverty reduction in the
Tripartite region’. The Purpose of the programme is ‘To improve the Tripartite’s
trade performance and competitiveness for the benefit of poor women and men’.
TMSA works across 3 RECs, i.e. the COMESA-EAC-SADC Tripartite (27 or half of
African Union (AU) countries, 58% of AU population and 60% of its GDP).
2.
TMSA follows the highly successful Regional Trade Facilitation Programme
(RTFP) which started out as a SADC programme, evolved into a SADC and
COMESA programme and which laid the groundwork for the COMESA-EACSADC Tripartite cooperation.
3.
TMSA is a £100m, 5-year Regional Aid-for-Trade Programme, comprising of
4.
5.
i.
£67m CDEL (capital delegation) funding for two financial years (2009-2011)
to support transport infrastructure investments. CDEL funds are being spent
through a multi-donor trust account established at the Development Bank of
Southern Africa (DBSA) and invested to finance priority NSC infrastructure
projects specified by the Tripartite. The purpose of this funding model is also
to improve aid effectiveness and allow for PPPs by crowding-in additional
donor and private sector funding for priority corridor projects; and
ii.
£33m technical assistance (till end October 2014) to reduce trade barriers in
the Tripartite Region and increase market access. This is done through
support of activities aimed at improving trade policy capacity, better trade
infrastructure and trade facilitation, trade regulatory reforms; and trade and
standards.
This Annual Review of the Trademark SA Programme (TMSA):
i.
assesses the Programme approach and management (section 2);
ii.
examines the extent to which the Programme's output indicators have been
achieved, and whether the outputs have resulted in progress towards the
programme's purpose. Where justified, it also assesses progress towards
DFID’s Wealth Creation pillar. This assessment also includes the efficiency,
effectiveness, relevance and impact (so far) of the programme (section 3);
iii.
Assesses whether the Programme had been successful in managing the risks
that were identified, and the impact of these risks on the achievement of
outputs. It also examines whether new risks have emerged since programme
design and how they have been managed or mitigated (section 4); and
iv.
presents general and specific recommendations to enhance the Programme’s
performance (section 5).
The Review focuses on Programme activities since the launch of the TMSA
Programme in November 2009. The programme logframe sets milestones for
March of each calendar year. The achievement of milestones under this report
therefore refers to March 2011, with progress reported for the April-October 2011
period towards achievement of the March 2012 milestones.
TMSA Annual Review, 2011
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6.
The Review team consisted of Mrs Elke Kreuzwieser, consultant (trade policy and
regional integration), Mr. Johan Kruger, consultant (regional Infrastructure
development and financing), and Mr. Alberto Portugal (World Bank, trade
facilitation). Mrs Lolette Kritzinger-Van Niekerk (TMSA Programme Manager for
Knowledge Management) provided technical support to the team. The review took
place from 3 to 26 October 2011 in Pretoria and included visits to SADC
(Gaborone) and COMESA (Lusaka). It was based on interviews (in person or by
phone) with the TMSA programme director, programme managers and staff
members; the DFID Southern Africa Head, senior advisor and programme
manager for TMSA; representatives and technical staff of SADC, COMESA and
EAC; DBSA; TMEA, beneficiaries and other stakeholders; as well as a desk
review of programme documents (see annex 6). A summary of the draft report
was presented to TMSA and DFID before the team finalised the review
documentation in November 2011.
7.
Programme results with the corresponding purpose and output indicators and
scoring are detailed in the attached ARIES report, together with Knowledge and
Sustainability assessments, Recommendations and Actions Points. The Aidememoire summarises the main findings and recommendations.
TMSA Annual Review, 2011
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2
ASSESSMENT OF THE PROGRAMME APPROACH
AND MANAGEMENT
Programme approach
8.
The design of this programme presents several interesting features worth
highlighting. They are related to its inter-REC (Tripartite) and integrated approach
regarding work areas as well as to its operational model. Where applicable, the
report assesses whether the original approach is still valid two years after
programme launch, and which new risks might have emerged from pursuing the
approach.
9.
The programme supports regional integration in Eastern and Southern
Africa through the COMESA-SADC-EAC Tripartite process. The TMSA
programme is probably the only support programme among those of development
partners in Sub-Saharan Africa that is uniquely designed for supporting inter-REC
cooperation & harmonisation. The Tripartite integration process has been taking
place without own core institutions up till now. Instead, it has been anchored in
the decision-making and coordination structures of the participating RECs.
TMSA’s support has provided a strong impetus for the Tripartite regional
integration process, while it has managed to avoid the risk of eroding political
ownership by the Tripartite Task force, RECs and countries. Through its support
for the Tripartite, TMSA is supporting the renewed focus within the Africa Union on
its continental trade integration ambition. TMSA has also a strategic fit with the
UK Government’s broader Africa Free Trade Initiative and White Paper on Trade
& Investment for Growth, despite the fact that it was designed prior to the launch
of these initiatives.
10.
The programme is flexible in its technical, financial and administrative
support, can respond fast on demand and can work with a wide range of
stakeholders, including with the private sector. While TMSA’s “influencing
from behind” approach has been critical in advancing the regional integration
agenda (eminently political in nature), it is also offering much needed technical
and administrative support in a timely manner to the Tripartite work programme. .
These dual technical and administrative roles require walking a political economy
tightrope, which TMSA has done successfully in the assessment of the team. Still,
some concerns have been raised about a confusion of roles, particularly about the
nature and influence of TMSA’s administrative (‘secretariat’) support – related to
preparing the agenda and minutes of meetings – to the Tripartite Task Force.
These concerns will be dealt with in the “Emerging Risks” section. TMSA is fully
aware of the sensitivity of this issue and the approval process followed for
administrative support shows that this role has been played with great
circumspection.
11.
TMSA follows a holistic / integrated approach to regional integration. This
approach emphasises the interrelationship of infrastructure / trade facilitation
(border posts, customs procedures etc.), trade policy (FTA agenda) and traderelated issues (standards, NTBs etc.). Transport infrastructure is designed and
implemented under the corridor concept. This integrated approach has allowed
TMSA to play a catalytic role among partners who have focused traditionally more
narrowly on one or some of the above areas.
TMSA Annual Review, 2011
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12.
The TMSA PMU assumes all the responsibilities of an administrative
management unit and is at the same time technically competent to provide
strategic planning and implementation capacity. Crucial technical support is
provided in-house through TMSA’s own staff, through TMSA-funded advisors in
SADC, COMESA and soon also some SADC / COMESA countries (TradeMark
East Africa funds advisors in EAC) and through outsourcing research and
analytical work.
13.
Some of these very positive – even unique – design features carry inherent risks
which, in some instances, have emerged during programme implementation.
These will be dealt with in more detail in the “Emerging Risks” Section.
Financial and Programme Management
14.
After a difficult establishment phase and hosting changes for the TMSA
Programme Management Unit (PMU) during the first six months, the programme
started to operate in line with its Programme Management Manual and with a
substantial number of the envisaged staff complement in August 2010.
Nevertheless, the establishment phase difficulties had a differential impact on
processes and staff recruitments. Although most staff was in place by end March
2011, some critical positions were yet to be filled, the PPIU remained to be
established, the Management Information System was not in place and some
workstreams and processes did not receive sufficient attention. The team’s
assessment is that the programme has recovered much of the lost ground by the
end of September 2011. The programme is well-poised to have all envisaged
positions filled, and the PPIU and other outstanding mechanisms and processes in
place by March 2012. The Tripartite Trust Account – TTA - (delivery mechanism
for TMSA’s £67m CDEL funding) has had a slow start as well, but it is fully
functional now, while also filling some gaps in project preparation processes.
Assessment of financial management
15.
The first PMU financial audit (1 April 2010 to 31 March 2011 by the COMESA
external auditors) was clean and identified limited material weaknesses,
deficiencies and control exceptions. The following observations were made:
i.
TMSA funds are used in accordance with DFID conditions;
ii. goods and services are procured in accordance with the PMM; strong
expenditure controls and procurement rules ensure contract and expenditure
cost-effectiveness;
16.
The PMU’s level of expenditure (commitment and disbursement) is set to increase,
but the pattern of the spending profile remains difficult to predict.
i.
Given the PMU’s difficult start-up period, the programme has exhibited a
relatively low overall burn rate up till now. At this stage, there is no indication
that the planned reallocation of £5m to the Project Preparation
Implementation Unit (PPIU) under output 1 would materially affect outputs 25. This situation may change, though, if the programme pace picks up with a
fuller staff complement on board to develop all programme components and
at the initial envisaged pace. Given the flexible and demand-driven nature of
the programme, it remains difficult for the review team to predict the spending
profile over the next 3 years. Currently, programmes / activities could be
added or dropped any time and in line with changes to the Tripartite work plan
or socio-political and economic changes for the in the region.
TMSA Annual Review, 2011
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There is also a built-in tension between programme flexibility and the level of budgeting,
where the incentive may be to commit limited funding, particularly for those activities with
a long-term horizon, but set financial forecasts as high as possible so that money for
unforeseen activities would be available in real time. The tension between programme
flexibility and accuracy of financial forecasting, could partly explain the large variance of
more than 50% between budgeted and actual expenditure over the past financial year.
There is no easy solution to this situation if the present advantage of flexibility is to be
maintained. Nevertheless, the team is of the view that the programme should investigate
how its expenditure activities could be smoothed through better planning and programme
management. Amongst others it requires strong PMU management and integration of a
3-months expenditure forecast in the MIS at decentralised project manager level.
Assessment of programme management:
PMU:
17.
TMSA’s work plan is derived from the Tripartite’s regional integration agenda.
Through its particular working arrangements with the Tripartite Task Force, any
strategic changes on Tripartite level are converted into work plan changes, also for
TMSA. With regard to the operational level governance structure, the TMSA
Executive Committee, which has been chaired by the COMESA Deputy
Executive Secretary, has been meeting regularly. Records point to the fact that it
is functioning well and plays its role.
18.
A comprehensive and interlinked Management Information System (MIS) has
been designed (monitoring of results chain, linked with financial and time
reporting) with information to be provided at three levels: work area, intervention,
and project. The MIS will go live in the coming weeks (November / December
2011) and will contribute to better information for decision making and reporting
(DFID would be able to access the information system on TMSA’s intranet).
19.
Staffing is being brought to levels consistent with programme requirements,
although the recruitment process for various critical positions has been somewhat
slow: knowledge management (just completed); country programme managers (2
positions to be filled, at interview stage), PPIU (3 positions to be filled);
infrastructure (policy profile needed). In the past, the staffing constraints seem to
have resulted in the concentration of much of the technical burden on the
Programme Director; leading to slow and often inadequate responses to DFID
information requirements and weak linkages with country programmes. DFID
expectations regarding the PMU’s strategic agenda setting and implementation of
core deliveries of the work program have been difficult to meet under these
circumstances.
20.
The outlook for programme management has now improved due to the prospect
of increased staffing and the upcoming implementation of the new MIS. The
combined impact should allow for timely and quality reporting; and increased
emphasis on strategic, analytical and M&E work by the PMU.
TTA
21.
The Tripartite Trust Account is one of the key mechanisms for delivering on the
infrastructure component of TMSA. The TTA (its fund management function and
investment committee), is fully functional, after it had a relatively slow start. During
the period under review, the TTA Fund Manager and Investment Committee spent
much time on putting good procedures and processes in place. The functioning of
the TTA has been boosted also by the DBSA’s resolve to allocate more resources
TMSA Annual Review, 2011
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to the Fund Management task. Nevertheless, the team is of the opinion that the
IC functionality could be improved further through the appointment of independent
experts to advice decisions on complex projects and improvement of IC templates
for decision-making
22.
Since establishment, the investment committee met six times either directly or on
a round robin basis and approved three projects totalling US$32.5 million,
representing approximately 32% of the DFID CDEL funds. The review team
regards the number of projects approved and level of funding commitments made
up till now to be at an acceptable pace, given the normal lead times for
infrastructure project preparation and appraisal. This is despite the teething
problems experienced during the initial phases of the TTA and the slow start up of
the other Tripartite institution, the PPIU, which has to build the project pipeline.
Prospects are good that the remaining funds will be committed long before the end
of the programme period, given that the TTA is functioning much smoother now &
the PPIU is to strengthen the project pipeline from early 2012. Leveraging of other
project funds would depend on the nature and locality of projects submitted to the
TTA for funding, while the overall sustainability of the TTA would depend on
mobilisation of more donor funding or funding from other regional sources.
TMSA Annual Review, 2011
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3
ASSESSMENT OF PURPOSE AND OUTPUTS
23.
The Review examines the extent to which the outputs have been achieved, and
whether the outputs of the programme have resulted in progress towards the
programme's purpose. It takes as its point of reference the programme logical
framework. The Output section of the ARIES report also includes the milestones
and targets of the DFID Wealth Creation Pillar.
Output Performance
24.
The TMSA logical framework specifies five outputs:
i.
Infrastructure / NSC: Project implementation and financing structures for
NSC programme established and programme fully functioning by 2014
resulting in 60% of NSC priority project portfolio implemented and 50% of
$1.2billion committed at NSC Conference (including CDEL funds) disbursed.
ii. Strengthened Trade Policy Implementation Capacity
iii. Enhanced Performance of the Regional Economy through improved
Regional Regulatory Regimes
iv. Increased market access for agricultural products through improved
standards compliance
v. Enhanced effectiveness of TradeMark SA’s activities and results through
better communication and influencing
Overall assessment of Programme outputs
25.
Some activities under outputs 1 and 2 have been hugely successful. Most
milestones were achieved, some surpassed. The following can be considered best
practice :
i.
Set precedent for Integrated Border Management (Chirundu OSBP);
ii. Tripartite FTA: preparatory technical work, process management and stakeholder consultations culminated in launch of the Tripartite FTA negotiation
and adoption of the TFTA roadmap in June 2011;
iii. NTB reporting and resolution system (both web-based and offline) is very
successful and will assume greater significance with increasing tariff
liberalisation
26.
The review found that activities under outputs 3 and 4 are not coherently
organised. The logical framework should clearly distinguish between regional
trade-related / regulatory harmonisation activities (to be included under output 3)
and market access/standards compliance pilot projects, mostly at country-level,
which should remain under output 4.
27.
The regulatory harmonisation agenda (standards, procurement, services, com
petition) is behind schedule, but is expected to receive more attention by the
Tripartite and thus TMSA. The pilot projects under Output 4 could provide valuable
lessons for mainstreaming them into other programmes.
TMSA Annual Review, 2011
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28.
Under output 5, the Programme has made excellent progress, putting in place the
building blocks for better communication with a range of stakeholders. The same
approach could be adopted for developing a communications strategy for
Tripartite.
29.
A great number of output indicators require revision of milestones and targets. See
the related general recommendation. Comparing the targets and milestones in the
TMSA Programme’s logical framework to those in DFID’s Wealth Creation Pillar, it
becomes apparent that some are not aligned. However, simply aligning the
logframe with the Wealth Creation Pillar, where relevant, is not the solution, as
some of the targets and milestones of the Wealth Creation Pillar are unrealistic or
measurement of the indicators, as formulated, is problematic. Aligning TMSA
logframe and Wealth Creation Pillar targets and milestones will need a joint DFID
Southern Africa and TMSA effort to achieve internal coherence.
Assessment by individual outputs 1-5
30.
The detailed assessment of the milestones achieved under each output can be
found in the ARIES report, listed by indicator. The following paragraphs provide a
summary assessment of the performance under each output and help answering
the question whether the combined outputs are on track to achieving the programs
purpose.
31.
Output 1: Improved efficiency and effectiveness of regional trade corridors
(especially of the NSC). The programme has substantially achieved all 2011
indicators, some were exceeded (NTB reporting and resolving). When the PPIU
becomes operational in January 2012, it will greatly contribute to achieving the
target of increased financing for NSC infrastructure. While the unilateral
concessioning of border posts in some countries, particularly Zambia, poses a
problem, reduction in transit time is likely to be achieved through Integrated Border
Management (IBM). Output 1 is therefore likely to be largely achieved in 2014
which justifies Score 2. - The risk for this output has been raised from low to
medium because of the sustainability issue (lack of financing for maintenance of
existing roads which could fall into disrepair during the implementation period of
the programme, hence an adverse impact on the corridor’s functionality which is
the target of output 1).-
32.
Output 2: Trade Policy. The Programme has been successful in advancing
the Trade liberalization and trade facilitation agenda. Significant progress has
been achieved on the Tripartite FTA agenda. A Roadmap for negotiations
including a timetable was adopted in June 2011, as a starting point of the prenegotiations phase. Formal negotiations are scheduled to begin in 2012.
Conclusion of the Tripartite FTA agreement (target of output 2) is still possible by
the end of programme in 2014 or at least in 2015, but the present targets and
milestones need to be revised. Two TMSA funded technical advisors in SADC
and COMESA support the RECs capacity to align with the regional integration
agenda. Support to the WTO LDC group under this output has successfully served
as a conduit for including themes relevant for regional integration into the LDC
agenda, but should be re-assessed in the light of the decreasing relevance of the
DDA agenda for Africa in general and the Tripartite region in particular. In trade
facilitation, the preparation of regional customs laws, procedures and
documentation have made good progress, although no single customs document
has been adopted. On other trade-related issues, the innovative NTB monitoring
and reporting system has played an important role in curtailing the use of NTBs to
TMSA Annual Review, 2011
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“compensate” for tariff liberalization. This system – quite unique in its design –
could be a candidate for learning from best practice and dissemination to other
RECs. The positive achievements under this output justify Score 2:
33.
Output 3: Regulatory harmonisation in trade related areas. The milestones
under the three programme indicators regarding (1) Standards (2) Competition
policy (3) Cooperation on and implementation of trade-related issues (services,
investment, public procurement, IPRs) at COMESA and SADC level are behind
schedule and need to be revised in the light of the Tripartite agenda in these
areas. Work needs to be re-energized at REC and Tripartite level (see specific
recommendations in Section 4 and in the ARIES report).Under these conditions,
and provided the programme affects increased attention and resources to regional
regulatory harmonisation, redefined milestones and 2014 targets can still be
achieved. In the meantime, this output receives Score 3.
34.
Output 4: Market access through improved standards compliance: Some
milestones under this output have been partially achieved. However, the
assessment of the milestones and targets of individual indicators under this output
raises an issue of coherence. Output 4 pertains to compliance of private operators
with international or national SPS rules or voluntary commercial standards,
whereas two of its indicators target regional regulatory issues, including SPS
setting and harmonization. These indicators would need to be folded into the
broader tripartite or REC-level approach under output 3. Lessons should be learnt
from successful pilot projects under Output 4 so that these could be replicated by
other DFID / donor or country programmes. Considering that the existing projects
in the areas of certification and supply chain partnerships were successfully
managed, but not to the level of ambition of the logframe (little innovation) and that
the regional regulatory SPS issues have not been dealt with, this output has been
scored 3.
35.
Output 5: Communication and influencing. The programme has put in place a
wide range of communication tools to reach different audiences: websites
(including dedicated sub-websites like NTB, LDC, Tripartite etc.), Youtube,
newsletter, newsfeeds. The new MIS will further enhance TMSA’s communication
and influencing capability. However, not all components of this output has
received due attention. The output indicator should be split into different
components for which milestones and targets would have to be developed, e.g.
(1) management information system and internal communication (incl. compliance
reporting to DFID); (2) knowledge generation and sharing for influencing /
advocacy / development / lesson learning; (3) communication for "branding" TMSA
and Tripartite identities. The satisfactory performance justifies Score 2.
Outputs to Purpose
36.
The Achievement of the Programme’s purpose “To improve Southern
Africa’s trade performance and competitiveness for the benefit of poor
women and men through regional integration” will be measured through three
indicators according to the Logical Framework: (1) Intra-regional trade flows’ share
of total trade, and (2) Southern Africa share of world trade, and (3) Incomes from
trade-related economic activity of 1 million low income households (up to 500,000
of these households will be women headed). The output-purpose link and
measurement of the three purpose indicators require strengthening and
additional data collection.
TMSA Annual Review, 2011
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37.
Indicator 1: intraregional trade / total regional trade: The 2011 and subsequent
years’ milestones are qualitative and assess progress of a process (improved
implementation of regional trade agreements), whereas the 2014 target is
quantitative (3-4 % increase above 2006-2008 baseline). A clarification of the
baseline for “intraregional trade” is needed well in advance of the target year. At
present the baseline consists of separate “intra-regional’ trade shares for each of
the RECs (COMESA, SADC and EAC). It is not clear whether the targets are to be
measured separately for each of the three RECs. In this case, it would be nearly
impossible to interpret progress as an outcome of the implementation of the
Tripartite preferential or free trade agreements. Moreover, the existing baselines
refer to all intra-REC trade, not only preferential trade (the latter would be possible
to measure in future. A new statistical extraction model capable of distinguishing
between preferential and other trade has been put in place in COMESA in 2010
and it is in the process of being extended to SADC). This implies that any increase
in the target / baseline rate would mostly reflect improvements in road
infrastructure and trade facilitation, rather than the influence of improved
implementation of trade agreements.
38.
Indicator 2: Regional trade / world trade: The output-purpose link is tenuous. The
share of the three RECs in world trade is so small that even a very significant
increase in sub-regional trade (measured at the level of individual RECs, not trade
among all Tripartite countries) would impact this ratio only marginally. Moreover,
fluctuations of commodity prices are likely to influence the ratio more than
developments in regional trade and could even lead to a situation where
expanding regional trade would represent a lower percentage of world trade.
39.
Indicator 3: Income increase for 1 million people. The output purpose link needs to
be clarified and a methodology for measuring this indicator elaborated and agreed
upon. The question here is whether an indirect macro-type indicator would be
acceptable (e.g. linking increase in trade to GDP and income) or whether more
direct indicators are needed, possibly based on surveys extrapolated to the overall
population of people affected by trade. This issue needs to be clarified and
agreed, and in case a direct indicator is retained, collection of baseline data
should start as soon as possible.
TMSA Annual Review, 2011
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4
ASSUMPTIONS /RISKS
Main Assumptions / Risks
The assumption / risk assessment as at the time of appraisal in 2009 is still valid. It is
summarized below.
40.
Political assumptions / risks: (i) Political commitment to the regional
integration process: Progress of the NSC and the Tripartite FTA agenda hinge
heavily on the political commitment of the countries involved. This political
commitment is very strong and there are no signs that it could falter in the near
future. (ii) Political risks due to country circumstances (political instability and
conflict) are by definition outside the influence of the Programme. Both risks are
mitigated through by raising awareness of the stakes, benefits for business
community and population.
41.
Macroeconomic assumptions / risks: Unsupportive international trade
environment. Prospects for the global economy are still uncertain and demand
remains constrained. But market access is improving for African countries. .
42.
Financing risks: The risk of failure to leverage necessary funds for the North
South Corridor and coordination of all programme components has been elevated
from low to medium and its impact from medium to high. The elevated risk
pertains to the inability to mobilize/allocate sufficient resources to ensure
continued maintenance of roads rehabilitated through TTA financing or through
other donor programs. Mitigation of this risk requires TMSA actions (bringing up
the issue at the Tripartite, developing a financing framework for maintenance).
Table 1 presents the original risks/ assumptions as outlined in the project memorandum
and the status at the time of the Annual Review 2011.
TMSA Annual Review, 2011
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Table 1: Original programme assumptions/risks and present status
Original Risk Description (program
memorandum)
Probability/
Impact/
Status at Annual Review
Low probability/ Political commitment remains very strong at
High impact highest level (Heads of state). Commitment
reaffirmed at the June 2011 Summit
Weak political commitment to
launching the Tripartite FTA pre-negotiation
regional integration processes in
phase,
SADC, COMESA and the COMESARisk mitigated through by raising
SADC-EAC summit process
awareness of the stakes, benefits for
business community and population
Remains Low probability/ High impact
Medium
No political instability and conflict at present.
Progress towards trade integration
probability /
jeopardised by political instability and
Medium impact Remains: Medium probability/ Medium
conflict
impact
Medium
International economic environment still
probability/
uncertain, demand constrained, but market
Unsupportive international trade
Medium impact access improving despite DDA failure
policy environment restricts export
through bilateral agreements (EU GSP,
opportunities
AGOA extended , BRICs)
Remains Medium probability/ Medium
impact
Failure to leverage necessary funds Low probability/ Inability to mobilize/allocate sufficient
for North South Corridor and
Medium impact resources to ensure continued
coordination of all programme
maintenance of rehabilitated roads
components
Medium probability / High impact
Failure of TMSA to remain
Low probably / TMSA temains strategically relevant and
strategically relevant and
High impact operationally efficient.
operationally efficient
Remains Low probably / High impact
TMSA Annual Review, 2011
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New Risks / Challenges for the programme
In addition to the original risks, the review team identified some new risks / challenges or
at least tensions that have emerged.
43.
44.
The downside risk of flexibility takes on several dimensions:
i.
Tension between strong focus on TMSA core activities and response to
new demands if the broadening of the Tripartite agenda (e.g. industrial
policy, adopted as third pillar” of the regional integration agenda during the
June 2011 Summit) is taken on fully by TMSA. Even with increased resources
(see below), maintaining a clear focus on core components of the programme
will be important (see also the first general recommendation of this report).
ii.
Associated risk of spreading programme resources (human and
financial) too thinly. This risk is not sufficiently mitigated, on the staffing
side, by additional recruitments completed or under way. Even with the new
recruitments, the Programme Director will carry a disproportionate
programme management burden, with a high opportunity cost in terms of
strategic planning capacity and oversight of programme output deliveries.
Taking on a broader agenda, could exacerbate this situation, should it be
difficult to delegate tasks and responsibilities or in the absence of additional
recruitments. On the financial side, the low burn rate in 2011 alleviates any
potential strain on financial resources, at least in 2012.
iii.
Tendency to keep financial resources “in reserve” for unforeseen activities;
this partially explains the low burn rate.
Political economy issues are becoming more prominent, e.g. :
i.
The need for managing “winners and losers” of the Regional Integration
process. One country indicated a ‘loss of interest’ in the NSC because of its
perception of insufficient benefits accruing to the country, whereas it has to
invest in and maintain vast segments of the NSC for the benefit of its
neighbours
ii. The need for managing perceptions:
45.
•
by RECs expressing concerns about their own regional integration
agenda now being “subsumed” by the Tripartite agenda. There is a need
to keep the RECs on board as they will stay closely involved in
implementation;
•
by RECs regarding the perceived role of TMSA as “Secretariat” of the
Tripartite, a concern to be balanced by the need to move the agenda
ahead in the absence of a formal Tripartite Secretariat and the lack of
capacity of the RECs;
•
by other development partners regarding the perceived role of TMSA and
DFID as “gatekeepers” to the Tripartite process, which has an adverse
impact on coordination and the capacity to attract additional financial
resources for the TTA.
Sustainability:
i.
Sustainability of roads financed by the TTA and other donors: the issue here
is lack of adequate funding for maintenance, leading to rapid deterioration
and requiring new investments in road rehabilitation. This is clearly a threat
TMSA Annual Review, 2011
Page 14
to sustainability despite the existence of national roads authorities and
ongoing support by donors on national level for road maintenance;
ii. Sustainability of other TMSA project achievements, e.g. websites etc. This
risk could be mitigated by making transition arrangements well before the end
of the programme (transfer the responsibility to RECs or the private sector,
unfortunately no Tripartite institutions so far) to ensure continuation.
iii. Sustainability of the regional integration process, which require policy,
legislative, regulatory changes and institutionalisation on national level.
TMSA is recruiting country programme managers to strengthen regionalcountry linkages and is ramping up working with DFID country offices.
46.
Over-reliance on in-house technical capacity
TMSA has undoubtedly very qualified technical staff well positioned to carry out
analysis themselves in many areas. The drawback lies in a tendency to complete
some tasks in-house which might be better outsourced, in order to free staff for
strategizing, planning, donor coordination and other crucial activities indispensable
for achieving the outputs.
TMSA Annual Review, 2011
Page 15
5
RECOMMENDATIONS AND WAY FORWARD
General Recommendations
47.
Since the launch of the program in November 2009, TMSA has made significant
progress towards achieving the programme outputs. No major refocusing is
required at this point. Nevertheless, based on the findings of the review, the team
puts forward several recommendations to enhance the Programme’s overall
performance.
48.
Maintain and reinforce the focus of the Programme on the core areas of
Infrastructure, Trade policy and Trade facilitation, and on delivery of results.
This would entail two adjustments:
i.
Stepping up work on outputs 1 (infrastructure / trade facilitation) and 3
(regional regulatory harmonisation). Although activities under output 1 are
already well on their way to achieving targets, challenges have emerged
(unilateral border post concessioning, lack of funding for maintenance) and
improvements are needed (donor coordination, establishment of the corridor
management committee, move to infrastructure investments other than roads)
which will require increased attention. Most notably, TMSA PMU would have
to upgrade skills to deal with the full range of infrastructure sub-sectors rather
than largely roads. Work on the regional regulatory agenda (output 3) is
behind schedule and needs to be re-energised. This adjustment in the focus
of the programme would have staffing implications for TMSA and also require
a formal change of the respective impact weights of outputs 1 and 3 in the
programme’s logframe.
ii. Reducing the amount of resources (financial and more importantly staff
time) spent on non-core activities.
•
Consider phasing out and mainstreaming some smaller country pilot
projects under output 4 (compliance levels with private standards
certification schemes and long-term supply chain partnerships). After
learning lessons from impact analysis and evaluation of these projects,
they can be mainstreamed / transferred for replication by other DFID
programmes or other development partners’ programmes.
•
Re-evaluate the rationale and the impact of TMSA’s continued
involvement in the LDC WTO work during the upcoming year and make
an assessment at next year’s annual review. The LDC work has had an
important impact in the past: it has provided analytical input, built
longstanding and high profile relationships, influenced the traditionally
defensive WTO LDC agenda in a more positive direction (especially on
trade facilitation and related issues), and generated important spill-over
for the regional integration agenda. On the other hand, the DDA agenda
has clearly lost momentum and is much less important for African
countries today vs. regional integration issues, DFQF access, EPAs,
AGOA, etc.). While the WTO LDC work does not absorb an important
share of the PMU’s budget (5.4% of the 2011 budget plan), the burden
falls disproportionately on the programme director and has therefore a
high opportunity cost, as mentioned in the “Emerging Risks” section of this
report. The team’s recommendation is therefore to stay involved, while
TMSA Annual Review, 2011
Page 16
focusing substantive support on issues more directly related to the African
trade agenda (cf. AFTI Africa Free Trade Initiative) and regional
integration, and re-assess the value of the support to the WTO LDC
Group after one year.
49.
Take a more strategic and integrated approach to regional infrastructure
development and trade/transport facilitation. After reallocation of £5m to the
project preparation fund, infrastructure development and trade facilitation is
expected to absorb around 75% of the total £100m programme resources. This in
itself suggests a re-newed focus on the institutional and financial framework
for infrastructure development in the Tripartite region.
i.
Institutional framework: There is a need to accelerate the establishment of
the PPIU for project preparation and the implementation of Corridor
Management Committee for NSC as well as to strengthen some aspects –
use of independent experts and improving appraisal formats - of the TTA IC’s
functioning (see detailed recommendations in annex 1).
ii. A regional financial framework is required and should include proposals
for financing
•
regional infrastructure projects (investment and maintenance );
•
cross-border trade facilitation projects and activities
(concessioning border posts, regional bond guarantees etc ).
The implications of this more strategic approach will be the need for
strengthening donor coordination (see below), an increased focus on transport
infrastructure other than road, and the skill-up of the TMSA PMU (see staffing
issues mentioned earlier).
50.
Scale up partnerships :
i.
Donors and IFIs: TMSA’s working relationship with other development
partnerships are critically (though not exclusively) dependent on better
functioning of the Friends of Tripartite (FoT). Recommendations are therefore
(1) for DFID and TTF to initiate a more structured and strategic framework of
engagement for partners coordination under FoT; including taking it to a
higher level (directors’ level? - at present, representatives of donors do not
have authority to commit principals), and for DFID to reopen the dialogue on
the need for a detailed strategic framework for the Tripartite agenda to guide
donor activities and commitments; (2) for TMSA to consistently implement
relevant decisions arising from FoT meetings to maintain the momentum and
create trust.
ii. Other DFID programmes: e.g. the upcoming agricultural programme
(mainstreaming the standards pilot projects; Finmark Trust for financial
aspects of possible intervention in industrial policy, Trade Advocacy Fund,
TMEA, country programmes. Responsibility: DFID and TMSA.
iii. Private sector: Take stock of present interaction with private sector with a
view of developing a more structured approach and scaling up cooperation.
51.
Strengthen knowledge management and lesson learning :
i.
Strengthen analysis – at several levels
•
at entry, to support decision making / selection process for projects
(quality at entry)
TMSA Annual Review, 2011
Page 17
•
in support to clients (Tripartite, RECs, countries) - more quantitative
analysis, cost- benefit type. An example would be analysis not only how to
implement border posts, but on what the impact may be.
•
in lesson learning through evaluation and impact assessments
ii. Stimulate the debate on regional integration issues in the Tripartite area
iii. Work with centres of excellence (including to help build regional trade
expertise), establish advisory groups, and introduce quality assurance
process for knowledge generation and publication.
52.
Give more attention to sustainability issues. The various dimensions of
sustainability have been set out above in the “New risks” section (4.2). They refer
to physical assets (maintenance of roads), intellectual assets (websites) and
institutions crucial to ensure the sustainability of project achievements (NSC
management committee etc.) and strengthening of regional-national linkages.
53.
Continue or increase support to RECs for regional integration activities that
are more realistic to be achieved at REC level (competition, procurement,
investment etc.) or that will form the basis for the Tripartite agenda over the longer
term (services).
54.
Proceed urgently with the necessary revision of a number of milestones and
targets (see annex 1 for summary and ARIES report for details). Revised
milestones and targets need to be in place as soon as possible to inform and
adjust programme activities so that the revised milestones and targets can be
achieved.
Main Specific Recommendations by Output
Output 1: Improved efficiency and effectiveness of regional trade corridors in the
COMESA and SADC regions (NSC)
(1) Scale up TTA:
i.
Attract additional contributions (change TTA agreement for easier entry and
exit)
ii. Move away from investment in roads to other types of projects to increase the
potential for leveraging from other donors or commercial investors;
iii. Address outstanding issues to enhance the performance of the investment
Committee (e.g. appoint & use special advisors, improve project appraisal
submissions)
Responsibility: DFID, TTF, DBSA supported by TMSA
(2) Design a regional financial framework that could:
i.
create incentives for countries responsible for providing & maintaining their
segment of regional projects where benefits are captured largely by
neighbours;
ii.
serve as conduit for cross-border projects (e.g. Kazungula bridge and
OSBPs)
(3) Accelerate the establishment of corridor management committees to improve and
measure corridor performance. Responsibility : TTF
TMSA Annual Review, 2011
Page 18
(4) Operationalise the PPIU and activate use of the GBP 5 m allocation for project
preparation. Responsibility: TTF and DFID
(5) Strengthen TMSA’s technical support for the Tripartite infrastructure harmoni
coordination and piloting agenda in all infrastructure subsectors, particularly
rail. This involves additional skills within the PMU. Responsibility: TTF and DFID
(6) Improve donor coordination on project preparation funds and maintenance.
Responsibility: TTF & DFID
Output 2: Strengthened Trade Policy implementation Capacity.
(1) In supporting FTA negotiation forum, anticipate issues where solutions can be
facilitated by analysis and provide such analysis.
(2) Refocus support to WTO LDC groups on issues relevant for regional integration
and re-evaluate support after one year.
(3) Broaden capturing of complaints reported to and resolved through the NTB
monitoring system in order to capture full extent of NTBs, not only complaints
officially entered on website.
Output 3: Improved regional regulatory regime. and
Output 4: Market access through SPS standards compliance and value chain
partnerships
(1) Separate regional trade-related / regulatory harmonisation activities (at present
some indicators under output 4, to be transferred to output 3) and market access
/ standards compliance pilot projects (output 4), to avoid the present overlap. Reenergise the standards regulatory harmonisation agenda at the Tripartite level.
While pursuing this process, build a data base of existing standards at national
and REC level (stock-taking) which will greatly facilitate the subsequent
harmonisation process.
(2) On trade-related regulatory issues, work on both REC and Tripartite level (e.g.
REC level for competition policy, some Trade in Services work), Tripartite level
for transport market liberalisation, closely linked to the trade facilitation agenda).
TMSA should consult with RECs on present status of trade-related technical work
at their level and agree on most relevant areas to be supported. (The review team
is of the opinion that ongoing work in these trade-related technical areas should
not necessarily be subject to the pace of the overall Tripartite regional integration
agenda. Indeed, some of the abovementioned trade-related areas (may come on
stream later in the Tripartite’s existence, but would require technical work already
now. They could be pursued on REC level as long as it is coherent with the
overall objectives and principles.)
(3) Support work of other lead donors (e.g. World Bank Trade in Services platform)
(4) Learn lessons from standards compliance pilot projects and share the information
with other DFID programmes and donors for potential mainstreaming of these
initiatives.
Output 5: Enhanced effectiveness of TMSA’s activities and results through better
communication and influencing
(1) Distinguish between the different components of the output. Split the indicator
into different components and develop milestones and targets. e.g.
(a) management information system and internal communication (incl.
compliance reporting to DFID) (b) Knowledge generation and sharing for
TMSA Annual Review, 2011
Page 19
influencing / advocacy / development / lesson learning; (c) Communication for
"branding" TMSA and Tripartite identities
(2) Strengthen knowledge for Tripartite integration and influencing. Explore ways to
"push" TMSA / Tripartite information in various ways, in addition to making the
information available for "pull" on websites etc. Strengthen communication efforts
to 'brand' Tripartite. Share lessons learned from programme, including among
other DFID projects and donors
(3) Step up KM & advocacy strategy on Tripartite integration agenda and direct it at a
wider range of stakeholders. Reinforce influencing through stronger quantitative
analysis. Undertake more data collection, quantitative analysis and evidencebased work to support regional integration, cooperation and development in the
Tripartite area. As part of this approach, publicise the GIS more widely and
broaden (e.g. include projects of other donors, in addition to the TTA projects)
and deepen (e.g. add monitoring data) the GIS database, while undertaking more
frequent updates. .
Conclusions
At the end of its first year of full operations, the TMSA Programme has been very
successful in contributing to the advancement of regional integration in Southern and
Eastern Africa, on both pillars: infrastructure / trade facilitation and trade liberalisation.
The 2014 Programme targets are likely to be achieved. However, new challenges are
emerging some of which are the “unintended consequences” of a successful approach.
One important challenge is the focus on delivery of core results, with implications for
staffing. Work on output 1 (likely to achieve targets, but improvements needed) and
output 3 (re-energise regional regulatory agenda, behind schedule) would need to be
stepped up, and the impact weight of these two outputs within the programme increased
accordingly. Strengthened donor coordination and a more structured framework and
rules of engagement for Friends of Tripartite wound greatly contribute to the overall
impact of the programme and could be enhanced by a Strategic Vision and Framework
for Tripartite itself.
TMSA Annual Review, 2011
Page 20
TMSA Annual Review, 2011
Page 21
LIST of ANNEXES
Annex 1:
Summary of Outputs
(Indicators, Weights, Risks, Revisions, Recommendations)
Annex 2:
Notes on aspects of TradeMark Southern Africa, Output 1
Annex 3:
Overall brief on TMSA
Annex 4:
DFID support for the COMESA-EAC-SADC Tripartite through the
TradeMark Programmes
Annex 5:
List of Persons interviewed
Annex 6:
References / List of documents
TMSA Annual Review, 2011
Page 22
Annex 1
SUMMARY BY OUTPUT
(Weight, Risk, Score, Revisions, Recommendations)
Impact weight
present
revised
Risk
present
Score
revised
Rev.
milestones
targets
Recommendations
Output 1: Improved efficiency and effectiveness of regional trade corridors in the COMESA and SADC regions (NSC)
30%
35%
low
medium
Indicator 1
Project implementation and financing structures
for NSC programme
Indicator 2
Comprehensiveness of GIS for main corridors
Indicator 3
Transit improvements at border crossings within
SADC and COMESA region
Indicator 4
Transit improvements at border crossings within
SADC and COMESA region
2
X
R1.1: Scale up TTA size, functioning and impact.
R1.2: Design a regional financial framework that could (1) create incentives for
countries responsible for providing and maintaining their segment of regional
projects where benefits are captured largely by neighbours; (2) serve as conduit for
cross-border projects (e.g. Kazungula bridge and OSBPs).
R1.3: Accelerate establishment of corridor management committees to improve
and measure corridor performance; operationalise the PPIU; and activate use of the
£5m allocation for project preparation.
Output 2: Strengthened Trade Policy Implementation Capacity
30%
30%
medium medium
2
Indicator 1
Free Trade Agreement between COMESA, EAC
and SADC
X
Indicator 2
Regional and international trading arrangements
in COMESA and SADC
X
Indicator 3
Extent of WTO LDC group agenda in WTO
Indicator 4
Indicator 5
Indicator 6
NTM monitoring and reporting system in
Southern and Eastern Africa
Regional Customs documentation, procedures
and laws
Implementation of Simplified Trading Framework
for smalle scale traders including Tradinf for
Peace and aviailability of trade information
TMSA Annual Review, 2011
R2.1: In supporting FTA negotiation forum, anticipate issues where solutions can be
facilitated by analysis and provide such analysis.
R2.2: Refocus support to WTO LDC groups on issues relevant for regional integration
and re-evaluate support after one year.
R2.3: Broaden capturing of complaints reported to and resolved through the NTB
monitoring system in order to capture full extent of NTBs, not only complaints officially
entered on website.
Page 23
Impact weight
present
revised
Risk
present
Score
revised
Rev.
milestones
targets
Recommendations
Output 3: Enhanced Performance of the Regional Economy through improved Regional Regulatory Regimes
15%
Indicator 1
Indicator 2
Indicator 3
20%
low
medium
3
Inter-regional technical regulations and
compliance
Cooperation between national competition policy
bodies
X
X
Level of cooperation on and extent of
implementation of trade related issues in
COMESA and SADC
X
R3.1: Separate regulatory issues (setting of public standards) from compliance with
private / commercial standards to increase market shares (for the REC and Tripartite
standards agenda to achieve results, and to avoid the present overlap between outputs
3 and 4). Increased emphasis on regulatory issues (staff implications). Create data
base of existing standards.
R3.2: Competition policy: Reconsider milestones and targets of indicator 2 as well as
possible scope and forms of TMSA support.
R3.3: Identify specific trade-related technical work areas for enhanced Tripartite and
REC support
Output 4: Increased market access for agricultural products through improved standards compliance
20%
Indicator 1
Indicator 2
Indicator 3
Indicator 4
Indicator 5
10%
medium medium
3
Number of SADC/COMESA countries at the risk of
losing Market access
Management of SPS issues according to
international standards
Level of implementation of in-country and regional
SPS Agreements
Compliance levels with private standards
certification schemes
Number of long-term supply chain partnerships
X
X
X
R4.1: Consolidate indicators 2 and 3 and transfer the combined regulatory SPS
indicator to output 3, revise milestones and targets
R4.2: Re-energize and accelerate the present tripartite standards harmonisation
process (needs a "driver / champion")
R4.3: TMSA to evaluate projects and formalize "lessons learned". TMSA to identify
synergies with other programmes (DFID and other donors) and present lessons learned,
in a format to be established (publication, contacts with other programme managers
etc).
Output 5: Enhanced effectiveness of TradeMark SA’s activities and results through better communication and influencing
5%
Indicator 1
5%
medium
low
Impact and success of TradeMark SA measured
and communicated
TMSA Annual Review, 2011
2
R5.1: Split the indicator into different components and develop milestones and targets.
R5.2: Strengthen knowledge for Tripartite integration and influencing
R5.3: Explore ways to "push" TMSA / Tripartite information in various ways, in addition
to making the information available for "pull" on websites etc. Strengthen
communication efforts to 'brand' Tripartite
Page 24
Annex 2
Notes on TradeMark Southern Africa, Output 1
1. Introduction
This Annex gives more details on some of the findings and recommendations related to
TMSA logframe Output 1, i.e. ‘improved efficiency and effectiveness of regional trade
corridors in the COMESA and SADC regions (especially of the NSC and its spurs)’. It
recounts information arising from interviews in South Africa, Botswana and Zambia and visits
to projects during the TMSA Annual Review
The reasons for providing additional notes on this output are: (i) the importance of
infrastructure and trade facilitation measures for achieving the goal and purpose of the
programme; (ii) the complex nature of this logframe output, comprising elements of
harmonisation of policy and regulatory frameworks, as well as financing and facilitating
implementation of Tripartite pilot programmes / projects; (iii) the large share of the TMSA
budget earmarked for this output (more than 75% comprising £67million CDEL and another
estimated £8-10m RDEL technical assistance; and (iv) the complexity of delivering this
output, given the range of institutional delivering mechanisms involved: TMSA Programme
Management Unit (PMU), the Tripartite Trust Account (TTA), the Project Preparation and
Implementation Unit (PPIU) and corridor management committees.
2. Functioning of the TTA
The Tripartite Trust Account is the only COMESA-EAC-SADC Tripartite financing
mechanism to date. It allows for pooling of donor and other resources for financing of
regional infrastructure. This multi-donor trust account has been established at the
Development Bank of Southern Africa (DBSA), which functions as its Fund Manager. The
TTA purpose is to finance priority infrastructure projects specified by the Tripartite, through
pooled donor and other funds. Its project funding approach promotes crowding-in of
additional public, development and private funding for Tripartite infrastructure projects. Its
efficient functioning is essential for making progress on the infrastructure component of the
programme.
The COMESA-EAC-SADC Tripartite-DBSA Agreement on the TTA got off to a slow start in
mid-December 2009 due to the following:

Applicants did not have detailed knowledge or an understanding of the basic
information required for a project to be TTA eligible, ready for appraisal and with
leverage potential identified.

The lack of a dedicated NSC institutional framework to (i) guide member
countries in preparing projects to a level where they could be considered for TTA
funding; (ii) help in harmonising policies, practices and project activities across
countries; and (iii) help in developing a shared view on a financial framework for
the corridor

As far as the TTA is concerned: (i) there was no common understanding of the
governance policy and the operating guidelines among different stakeholders and
indeed no common understanding of the NSC programme; (ii) a TTA MoU clause
on potential conflict of interest between DBSA as development finance institution
and DBSA as TTA Fund Manager, tempered a potential pro-active approach from
DBSA, resulting in its delayed involvement in project preparation; (iii) in the
absence of the PPIU, there was confusion about responsibility for the project
TMSA Annual Review, 2011
Page 25
preparation task, resulting in a scarcity of projects prepared up to a bankable
level; and (iv) there has been insufficient communication with stakeholders on the
TTA – its role, nature of funding (grants or loans) and functioning.
Between March and June 2011 some of the issues hampering the functioning of the TTA
were resolved, following a DFID-initiated review by an independent consultant and
preparation of project information guidelines by the TTA Fund Manager and secretariat to
the investment committee(IC). It was also during this time that the Fund Manager presented
the IC guidelines and options for investment of cash balances in the TTA account (within the
context of SA foreign exchange control regulations). The DFID agreement with the DBSA
allows for income earned on cash balances in the TTA account to be available for TTA
activities.
Up till now the IC met 5 times and approved three projects totalling US$ 32.351 million,
representing approximately 32% of the DFID CDEL funds. It met a 6th time at the end of
October 2011 to consider a fourth project, i.e. a regional transmission line. However, the
project appraisal submitted to the IC did not sufficiently address issues related to the project
sponsor ownership structure, capturing of income streams by different parties and economic
/ financial viability of the project. For these reasons the project appraisal has been referred
for review by an independent energy expert. Should the IC approve this project, TTA
(CDEL) commitments will increase by another $6-$10m.
The Review Team has found that after a protracted establishment phase, (i) the TTA was
starting to function well. The DBSA’s fund management role, including the secretariat
function in support of the IC, as well as the IC per se, appear to be functioning smoothly
now. It has committed 32% of the TTA funding to 3 projects and another project is awaiting
decision; (ii) given the normal lead times for infrastructure project preparation, appraisal and
the financial closure process, as well as the initial misunderstandings, the funding
commitment level is acceptable at this stage of the programme; (iii) there is still some room
for improvement and refinement in the functioning of the TTA and in broadening awareness
about the TTA; and (iv) securing more TTA funding for regional projects is becoming
increasingly important.
Going forward, there is room for further improvement and refinement. Information contained
in the TTA Secretariat’s appraisal reports has to be aligned with the goals, purpose and
indicators contained in TMSA’s logframe. Costs and benefits, the social and environmental
impacts and safeguards, impacts on beneficiaries and leveraging are some of the issues that
require better articulation and / or quantification. A typical example of vagueness is in the
Kafue weigh bridge appraisal which states “ investment in infrastructure in general has been
identified as critical for the development of a country and its ability to accelerate pro poor
economic growth.” This type of statement contributes to neither sound decision making by
the IC nor to TMSA / DFID’s better measurement of the programme impact. DBSA is
already working on ways to strengthen the appraisal reports with relevant and quantified
analysis as well as to communicate better information on project funding requirements and
other TTA aspects. In addition, the IC’s capacity should be strengthened through
appointment of independent experts, in line with the TTA agreement. Requests for
nominations by the various participating institutions have been tabled a number of times but
the deadlines for the nominations have not been met yet. In the broader context, the
functioning of the TTA in relation to the NSC would be further enhanced by the
establishment of the NSC Management Committee and by closer interaction among the
Friends of the Tripartite on Tripartite regional projects. The Fund Manager, in cooperation
TMSA Annual Review, 2011
Page 26
with members of the IC, has started to develop material and communication avenues for
‘branding and marketing’ the TTA
Ironically, smoother TTA functioning (and assuming a strengthened project pipeline) can
result into speedy depletion of available TTA funds at a time that probably more rather than
less grant funding is required for regional project. Up till now, the TTA has not received
additional funding to the original £67m from DFID and £1m from the DBSA. This is
despite the fact that it was designed as a multi-donor trust account for attracting additional
funding from other donors, especially from smaller donors. However, it seems that the TTA
stipulation of linking donor participation in the IC to a contribution of at least €20 million might
have acted as a disincentive for smaller donors whom would have liked to have an IC seat
irrespective of the level of their contributions.
With regard to funding regional infrastructure, the TTA approach is that grant funding should
be used to leverage additional investment funds for projects. This could be done through
using grant funding to e.g. subsidise financially non-viable projects to a level that would
make them financially viable and sufficiently attractive for mobilising commercial or
development finance. This approach has not find expression in practice yet, due to the
nature of the projects which has been considered to date and the size of the ‘viability gap’ to
be closed by TTA funding. Regional roads require traffic volumes of 13000-15000 vehicles
per day for them to be financially viable and to attract private sector funds through PPPs.
The required levels of traffic volumes do not exist in the region (outside of SA) for attracting
large-scale private sector financing to road projects. Even in the case of a transmission line
project which has been appraised for potential TTA funding, the leveraging is likely to be low,
only around 15%.
Notwithstanding the difficulty of applying the leverage approach on a project by project basis,
TMSA CDEL funding together with the infrastructure harmonisation and coordination support
through the PMU, has been successful in leveraging funding in a programme context. All
the NSC “red” roads (those requiring immediate attention) with a combined length of 1041km
is in the process of being funded, most by others such as the World Bank and governments
through their own resources.
3. Strengthening the Project Pipeline
It is often stated that funding is not the main constraint for infrastructure investment in SSA
but that it is rather the availability of properly prepared and bankable projects. Unpublished
research done for the World Bank on the performance of private equity funds in SSA
supports this view. A PPIAF / AfDB study found that in 2006 there were already 26 different
project preparation funds, dedicated to work on projects in SSA, but in most cases the
operations of these funds were subject to mandate constraints and cyclical shortages of
funds. This finding is repeated in an unpublished 2011 paper for UNECA.1
Despite the existence of many project preparation funds, the TTA project pipeline has been
weak. The Review Team is of the opinion that the Tripartite’s plans to establish the PPIU
(office accommodation secured and staff recruitment process nearly completed) and the £5
1
Leighland, J, 2011. Public-Private Partnerships in Africa’s Energy Sector: Challenges, best practices,
and emerging trends. Paper for presentation at UNECA’s High-level Workshop on “Public-Private
Partnerships’ implementation in the Energy Sector in Africa: Challenges, Best Practices and New Trends”
United Nations Conference Centre, Addis Ababa, Ethiopia, 30 June – 1 July 2011. Unpublished paper
TMSA Annual Review, 2011
Page 27
million that DFID has earmarked for project preparation in June 2011, will help fill a critical
capacity and financial gap in growing the pipeline of bankable regional projects. The PPIU
will be key in facilitating better cooperation among the range of project preparation funds
involved in or that could be involved in Tripartite infrastructure projects. Furthermore, the
work of the PPIU is expected to contribute to improved coordination of approaches to and
funding of regional projects at the level of the Friends of the Tripartite.
4. Integrated approach to infrastructure
The infrastructure required to support interregional trade pertains mainly to energy, ITC and
transport (e.g. ports, border posts, rail, road and air) investments and services. Currently
mainly transport, trade facilitation and energy projects form part of the NSC concept and
programme. In practice, the TMSA investment component is substantially skewed towards
road transport projects while in the other sectors it has been playing more of an advocacy
and technical support role. This balance has been mirroring the priorities of DFID and
readiness of the NSC member countries to upgrade NSC roads, particularly the 1041km of
‘red’ roads. The TMSA role in investment, facilitation and support of these urgent road
projects is nearing completion. In future, TMSA’s role in NSC roads is likely to shift
increasingly to advocacy for and facilitation of maintenance of the so-called amber and
green roads to stretch their current economic life as far as possible. According to World
Bank analysis2 of the NSC, the Internal Rate of Return (IRR) on maintenance spending is
generally substantially higher than that of rehabilitation. One dollar spending on road
maintenance will save an estimated four dollars on rehabilitation in future. Insufficient
maintenance funds by national governments and their agencies remains a matter of great
concern. It holds the risk for governments and donors of having to fund – in future increasing amounts of road rehabilitation resulting from the inability to maintain roads now
and which are still in fair condition. Apart from insufficient road maintenance funds,
countries also do not have the incentives to enter into expenditure commitments for
maintenance and rehabilitation of regional roads from which the benefits will be captured
largely by neighbours.
Currently, various efforts to reduce maintenance cost or find alternative funding sources are
taking place. E.g. Botswana is planning to pilot sky-tolling with GPS in order to alleviate the
burden on the fiscus of financing regional roads. At the same time, transport operators are
piloting a self-regulation scheme to reduce practices which impact adversely on the quality of
roads (e.g. inappropriate vehicle standards and driver practices).
In addition, rebalancing road-rail transport use in the region would reduce the funding needs
for road maintenance. Although the Tripartite is promoting more balanced road-rail transport
use, the rail network is experiencing serious structural problems related to the way in which
concessions were structured in the past. In general, rail has been expected to be a
commercial undertaking, while, in most cases, roads have continued to be a government
funded public good. A number of other factors have also contributed to problems
experienced by railway concessionaires like unreliability, theft and flood damage. The
outcome has been the non-viability and uncompetitiveness of rail in relation to road
transport. This, in turn, has resulted in a shift towards road transport and hence increasing
need for maintenance costs (with the burden falling largely on the fiscus). The Review
Team welcomes TMSA and the TTF’s plans to undertake further work on financing regional
integration, including maintenance of regional roads.
2
World Bank, April 2009. North-South Corridor Brief. Unpublished memorandum.
TMSA Annual Review, 2011
Page 28
The Review Team’s view is that TMSA will have to focus more effort and resources on
restructuring railways in the region. Up till now, it has supported a strategy paper for the
Tazara railways and has completed an extensive regional railways track assessment study,
which has complimented the work of other donors / institutions. Nevertheless, the need
remains for a Tripartite dialogue and process for re-concessioning and restructuring railways
aimed at an efficiently functioning regional rail network. This work should also guide the
fledgling national PPP units in (re-)structuring concessions, which would include correct and
balanced risk allocations.
This kind of work on rail may also spawn a fair amount of
demand for support which may have to be sourced / coordinated by the Tripartite.
Progress on air transport in the region is subject to all countries implementing the
Yamoussoukro Agreement. Open competition will have both costs and benefits in the
regional context. Small, national ‘flag-carrying’ airlines may lose business and become even
more financially unviable. In contrast, a hub-and-spoke environment can actually assist in
making the national airlines more viable as traffic in the region is stimulated. Next steps for
the Tripartite include finalising funding for the JCA and monitoring implementation of the
agreement.
Currently, seaports are largely progressing without major technical assistance from TMSA or
the need for grant funding of projects. In contrast with seaports, improving the efficiency of
border posts remains an area for continued support. The successful piloting of the Chirundu
OSBP has had a powerful demonstration effect, illustrating the potential benefits for the
region from integrated border management approaches, including OSBPs. Although all
NSC countries subscribe to the policy of speeding up cross-border transit, unfortunately
some have entered into agreements with the private sector to finance, build and operate
single country border posts. Current indications are that these interventions may result in
reduced transit times (in relation to the status quo), but that high border crossing fees may
partly if not largely wipe out gains from lower transit times for trucks. Overturning the
relevant countries’ political decisions may be difficult if not impossible, but evidence-based
advocacy, such as a detailed cost-benefits analysis of the Chirundu OSBP, may be an
essential part of a risk mitigation strategy against low or no efficiency and cost gains
resulting from this model.
The TMSA logframe includes at least 5 OSBPs as output target. Although 5 OSBPs (4 in
addition to Chirundu) may still be implemented over the programme’s lifetime, these may not
necessarily be the critical high traffic volume ones. However, it should be noted that OSBPs
are not a goal in itself and that the goal is rather faster cross-border transit times and lower
transport costs. The OSBP methodology is an efficient way of achieving an integrated
border management approach, but efficiency gains are possible even with separate border
posts (preferably with using the same operating system).
In order to measure border crossing efficiency gains and corridor performance, it is
interesting to note that very few trucking companies track their vehicles on a continuous
basis once the trucks are out of the country of origin although this is technically possible.
This is due to the costs associated with roaming. This is true of all the countries except
partially the countries in the EAC where the costs of roaming is substantially less as a result
of common operators .This is an area which could also substantially improve the efficiency
with which trucking operations are managed.
TMSA Annual Review, 2011
Page 29
In the energy sector TMSA has provided support for the Zambia-Tanzania–Kenya
interconnector, while the DRC-Zambia transmission line upgrading has been submitted for
consideration for TTA funding. More harmonization and cooperation work may be required
in future arising from the linking of the various power pools and on advice regarding
financing of regional transmission lines.
The Review Team’s view is that the substantive range of issues across various
infrastructure sectors is so wide that the TMSA PMU should broaden its skills set. Current inhouse skills are focused on road transport, but there is a clear need to acquire in-house
capacity to deal with the full range of infrastructure sectors on a strategic level and for
coordination.
5.
Risks
The TMSA programme, closely intertwined with the Tripartite regional integration initiative, is
facing a number of risks:

Waning commitment to the Tripartite vision and strategy of integrating half of
Africa’s countries and the benefits of regional integration
Throughout the Review Team’s interviews, it was clear that political commitment to the
Tripartite and AU vision and strategy for regional integration remains as strong as ever.
Testimony of this is the launch – by the Tripartite Summit - of the Tripartite FTA negotiations
and addition of a third pillar to the Tripartite regional integration agenda in June 2011.
However, the regional integration process is a political economy process, requiring
management of winners and losers. This, in turn, requires information and capacity for risk
mitigation e.g. providing evidence on economic and financial costs and benefits of regional
integration for countries to make decisions; strengthening countries’ negotiating capacity in
the area of trade and development / financial capacity to prepare bankable projects; putting
in place regional financial mechanisms to help carry the cost of regional projects, etc.
TMSA’s technical back-up work in these areas would continue to help the Tripartite Task
Force in advocating for regional integration and approaches and in designing ways to
mitigate against potential loss of support, whether on the political or government
administration levels.

Perception Risks
The Review Team became aware of different types of perception risks, all which require
careful management or mitigation.
o
Ownership: TMSA is walking a tightrope as it is playing both a technical and an
administrative support role to the Tripartite and its sub-committees. Moving too fast
on a technical level risks eroding ownership by the Tripartite and member countries.
Feedback during the review indicated that TMSA has been largely successful in
being perceived as “leading from behind “ and “selling” good regional policies and
approaches in such a way that ownership is retained where it belongs.
o
Gatekeeping: In contrast, some donors perceive the NSC and the TTA as DFID
initiatives and TMSA and DFID as gatekeepers to the Tripartite initiative. These
TMSA Annual Review, 2011
Page 30
perceptions could be countered by better ‘branding’ of the Tripartite, including its TTA
and by placing the Friends of the Tripartite on a stronger footing.
o
Funding through TTA: Some countries see the TTA as a major source of funding for
the NSC programme, while in reality, the amount currently available for funding
projects is very small in relation to need. These perceptions must be corrected
through an awareness and communication programme on the TTA.
o
NSC progress: Some of the donors and international finance institutions (IFIs) whom
pledged $1.2bn during the NSC Conference are committing parts of their funding
pledges for NSC projects. However, it seems that directly funded projects are not
necessarily highlighted as part of the NSC or done in coordination with the Tripartite.
This detracts from the perceptions and realities of progress on the NSC programme.
DFID as lead Tripartite donor and TMSA should encourage donors / IFIs to report
funding and implementation progress on NSC projects and use mechanisms such as
the GIS to capture and communicate such progress. In addition, DFID and the
Tripartite should continue to follow up with the donors / IFIs on their plans to realise
commitment and disbursement of their financial pledges to the NSC programme.

Sustainability
Neglect to do proper road maintenance constitutes the most serious risk for the sustainability
and value for money of the NSC road infrastructure. There is some evidence that NSC road
maintenance is hampered by insufficient funding in some of the NSC member countries.3
Insufficient funding for road maintenance could be exacerbated by a reluctance to fund
regional projects. There is some emerging evidence in the case of ‘transit countries’ having
to bear the costs of regional road investments and maintenance, but capturing only limited
direct benefits (e.g. Botswana which is responsible for funding two substantial corridors –
parts of the Trans-Kalahari Highway and NSC). Appropriate measures to address this
situation are not obvious. For example, maintenance conditionalities are difficult to enforce
in the case of grant funded projects. In contrast, maintenance conditionalities for specific
portions of road tied to ringfencing of funds are taking place to the detriment of maintenance
of other roads. A two-pronged approach may be required, i.e.
3
o
All donors / financiers will have to cooperate and coordinate without ringfencing
portions of the “road funds“ for their specific projects. This is to ensure that
maintenance budgets are sufficient to maintain all roads and thereby to obtain the
maximum economic life of the assets. Various options should be investigated to
ensure road maintenance, e.g. donors / IFIs could require proof of availability of
maintenance funds as a precondition to committing and / or disbursing funding.
o
Investigate a regional financial framework which allows for regional funding of
construction and maintenance of regional road infrastructure.
During the Annual Review, two roads departments were visited and review team members travel on one of
the corridor roads in need of rehabilitation and upgrading. There were no signs of routine maintenance and in
subsequent discussions with the relevant roads directorate the review team was informed that maintenance
contracts were awarded but that there was no funding available for executing the contracts. A major concern
is that the rainy season is fast approaching and that a substantial portion of the drainage channels are
blocked. Given the extent of potholes and slope of the particular road, this road may see extensive damage
during the rainy season.
TMSA Annual Review, 2011
Page 31
6.
Conclusion
This section summarises recommendations related to Output 1 of the TMSA Logframe:



TTA:
o
Share information on the purpose and functioning of the TTA, and campaign among
donors for additional contributions. Amend TTA clauses serving as disincentive for
donor participation. For example, revise the €20m threshold for IC participation and
the conditions for exiting;
o
Give consideration to a more balanced portfolio for investment, which may imply
moving away from investment in roads to other types of projects which could attract
additional sources of funding from other donors or commercial investors; and
o
Address outstanding issues which would enhance the performance of the IC, e.g.
appoint & use special technical advisors, improve project appraisal submissions.
Investigate the establishment of a regional financial framework, which would:
o
create an equitable environment and incentives for countries which are responsible
for providing and maintaining regional projects of which the benefits are captured
largely by neighbours; and
o
provide a mechanism that could serve as conduit for cross-border projects (e.g.
Kazungula bridge and OSBPs).
Establishment of the NSC Management Committee is urgent as it could
o
Promote application of integrated border management approaches such as OSBPs;
o
Encourage corridor countries to allow for and undertake proper routine maintenance
of road infrastructure, given that neglect would jeopardise corridor benefits over the
longer-term; and
o
Address the cross border mobile roaming costs which are hindering corridor
performance monitoring through using GPS truck tracking methods.

The PPIU and the GBP5m allocation for project preparation should be operationalised
as soon as possible.

TMSA’s technical support for the Tripartite infrastructure harmonisation,
coordination and piloting agenda in all infrastructure subsectors, particularly rail, should
be strengthened through employing additional skills within the PMU.
TMSA Annual Review, 2011
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Annex 3
Overall Brief
TradeMark Southern Africa (TMSA)4
1. Introduction
TradeMark Southern Africa (TMSA) is a £100 million, DFID-funded programme over 5 years
that promotes regional integration in East and Southern Africa by working closely with the
COMESA-EAC-SADC Tripartite, its 26/7 member states, business and civil society
organisations. The Programme was established in November 2009.
The £100 million contribution consists of a £67 million contribution to the COMESA-EACSADC Tripartite Trust Account for the purposes of leveraging infrastructure upgrading and
investment along the North-South Corridor. The remaining £33 million is programmed in
the following key work areas:
2. TMSA Work Areas
2.1
Trade Policy
Trade and therefore trade policy has become a major determinant of economic and regional
development and integration, depending on how it supports economic activity. Most of the
trade in the eastern and southern African region takes place within the framework of regional
agreements. It is generally understood that a conducive policy environment is vital for
fostering increased trade and economic growth in any country or regional grouping.
TMSA recognises that such an environment depends upon the institutional capacity in
countries and regional groupings to deal with national and regional policy challenges,
participation in and benefit from multilateral trading arrangements and exploitation of
opportunities created by globalisation, trade liberalisation and regional economic integration.
Consequently, TMSA provides administrative, technical expertise and financial support
towards improving regional policy formulation, research, analysis and harmonisation as well
as strengthening policy implementation capacity.
Specifically, TMSA is supporting regional trade liberalisation through the implementation of
preferential trading arrangements such as the COMESA-EAC-SADC Tripartite Free
Trade Area (FTA). The Tripartite Free Trade Area intends to liberalise trade among the 26
Member States of the Tripartite Region. In support of the FTA negotiation process, TMSA is
assisting the development of a Tripartite Statistical Trade Database that will improve the
availability and dissemination of accurate and up-to-date trade related and other economic
data. This will improve the region’s capacity to undertake trade and economic research and
analysis, thus enhancing the quality of policy analysis, formulation and decisions. TMSA will
also support the enhancement of trade policy skills through direct trade policy technical
assistance to SADC and COMESA, sponsoring regional participation in Trade Policy
Masters courses and targeted training on trade-related issues.
4
This brief was drafted by TMSA, 31 October 2011.
TMSA Annual Review, 2011
Page 33
Other Trade-Related Areas of TMSA’s work is on trade in services and competition
policy. There is an intrinsic relationship between trade in goods and trade in services as
liberalized services trade would facilitate goods trade and make it more competitive on the
regional and international markets. Freer trade in services is, therefore, an important aspect
of overall trade liberalisation, as it can result in mutually beneficial exchange of information
and skills, enhancing productivity and competitiveness by increasing availability, affordability
and quality of services that in turn would make goods cheaper and competitive. Trade
liberalisation and the elimination of tariff and non-tariff barriers will enhance competition in
the Tripartite region. By promoting fair competition through effective regional competition
policy will help to boost regional trade and investment and maximise consumer welfare.
Least Developed Countries (LDCs) are those countries, which, according to the United
Nations, exhibit the lowest indicators of socio-economic development, with the lowest
Human Development Index ratings (a composite indicator of people's ability to lead a long
and healthy life, to acquire knowledge and skills, and to have access to the resources
needed to afford a decent standard of living). The LDC Group, based in the WTO in
Geneva, collectively advocates for and advances its agenda in international fora, as
individual LDCs do not have the resources and the capacity to do so individually. TMSA is
supporting the mainstreaming of trade into the development policies and development plans
of LDCs. TMSA is also supporting trade policy capacity development through training,
research work, providing technical expertise and developing issues papers for discussion in
the LDC Group aimed at improving its ability to effectively negotiate beneficial outcomes for
LDCs. Current TMSA activities includes developing an approach for LDCs in negotiating the
implementation of their obligations under the WTO Agreement on Trade Related Aspects
of Intellectual Property Rights (TRIPS), technical assistance to LDC countries to prepare
proposals for the next round of Enhanced Integrated Framework (EIF) funding, and
assisting LDC Countries in meeting requirements for their accession to the WTO.
2.2 Trade and Transport Facilitation
The COMESA-EAC-SADC Tripartite Free Trade Area aims to reduce tariffs imposed on
goods originating in the region and traded in the region. However, in addition to tariff
barriers, the region’s producers and traders also face a number of Non-Tariff Barriers. NonTariff Barriers (NTBs) are factors other than tariffs that inhibit cross-border trade, for
example excessive customs adherence or excessive administrative procedures.
High cross-border trade and transport costs are major factors negatively impacting the
region's trade performance. In the COMESA-EAC-SADC Tripartite region road transport
accounts for about 95% of cargo volume, and the costs of road transport is directly related to
the time taken for a journey. If a truck takes 3 days to clear a border (which is not excessive
in the COMESA-EAC-SADC region) the transporter can pass up to US$1,200 to the importer
and, eventually, to the consumer. Similarly, it costs US$5,000 to US$8,000 to ship a 20ft
container from Durban to Lusaka. It costs only US$1,500 to ship the same container from
Japan to Durban.
An integral part of the Tripartite Free Trade Area, therefore, is the design and
implementation of interventions aimed at improving trade and transport measures by
removing obstacles to the swift movement of goods across borders. TMSA provides
technical, administrative and financial support to the COMESA-EAC-SADC Tripartite on the
following Trade Facilitation Interventions:
TMSA Annual Review, 2011
Page 34
Tripartite Trade and Transport Facilitation Programme: The COMESA-EAC-SADC
Comprehensive Tripartite Trade and Transport Facilitation Programme (CTTTFP) is a series
of initiatives from different Regional Economic Communities that have been brought together
into one large integrated trade facilitation programme with the purpose of reducing the time
and costs of cross-border trade in the region. Projects supported by TMSA include: Customs
Legislation and Procedure, Integrated Border Management, Customs Transit Management
Systems, Vehicle Overload Control, Harmonised Road-User Charges, vehicle regulations
and standards, Third Party Motor Vehicle Insurance, Self -Regulation, Road Transport
Market Liberalisation and establishing a Joint Competition Authority on Air Transport.
Elimination of Non-Tariff Barriers: Non-Tariff Barriers (NTB’s) refer to non-tariff related
trade restrictions resulting from prohibitions, conditions or specific requirements that make
importation and exportation of goods difficult or expensive. TMSA is providing instrumental
support to the COMESA-EAC-SADC Tripartite in the elimination of NTBs, both through
supporting the establishment, maintenance and communication of an on-line Tripartite
mechanism to report and monitor the resolution of NTB’s; and technical support to the work
of National Monitoring Committees to resolve reported NTB’s.
Standards and Phyto-Sanitary Standards: Trade in goods requires that goods should
comply with technical requirements of the importing country. Some of these technical
requirements, however, vary from country to country, creating Technical Barriers to Trade
(TBTs). Imports and exports of agricultural products, on the other hand, have to conform to
sanitary and phyto-sanitary (SPS) measures which are applied to protect human, animal or
plant health and life. While legitimate in themselves, these measures can become barriers
to trade if they vary from one country to another, or if a country lacks the technical or
financial capacity to comply. TMSA is supporting the COMESA-EAC-SADC Tripartite to
create well-functioning technical infrastructure, underpinned by harmonized standards, vital
to regional integration. TMSA also supports a number of pilot projects in Southern Africa to
help countries improve standards compliance levels and maintain or increase market
access, and assist small growers to benefit directly from public private partnerships in cross
border value chains.
2.3 Corridors and Infrastructure
The North-South Corridor (NSC) Programme is a Pilot Aid for Trade Programme that has
enabled the Regional Economic Communities (RECs) of COMESA, EAC and SADC, their
Member States and the International Community to implement an economic corridor-based
approach to reducing costs of doing business in Sub-Saharan Africa. The North-South
Corridor programme addresses, as a comprehensive programme, road, rail, ports and
energy infrastructure, as well as border efficiency along the Corridor.
Similar approaches are now being followed by the Tripartite RECs on other corridors in the
Tripartite Region, including the Eastern Corridors (Nacala and Beira), Western Corridors
(Lobito) Horn of Africa Corridors, and Maritime Corridors.
TMSA provides technical and administrative support across a range of corridor and
infrastructure projects, with a key focus on the North-South Corridor Pilot programme.
TMSA Annual Review, 2011
Page 35
2.4 Other areas
Other work areas under consideration by TMSA will include supporting interventions under
the recently agreed COMESA-EAC-SADC Industrial Development Pillar, and promoting
innovative thinking on regional integration financing.
TMSA promotes awareness and influence of these regional priorities through a range of
Monitoring and Evaluation, Advocacy and Communication interventions, including
developing effective approaches to Corridor Monitoring including a comprehensive GIS
database and map of all corridors and projects, promoting the work of the COMESA-EACSADC Tripartite through a joint web-site and communication materials, developing a range
of regional databases and general research and knowledge sharing.
3
Partnerships and Beneficiaries
TMSA Partners and beneficiaries include the COMESA-EAC-SADC Tripartite RECs (both at
a Tripartite and regional level), countries, multilateral agencies, international organisations,
private sector organisations and academia.
4
Results
The programme aims to support the following regional results by 2014:
5

Reduction in transit times and transaction costs along the North-South Corridor;

Implementation of a COMESA-EAC-SADC Tripartite-led Comprehensive Trade and
Transport Facilitation Programme (CTTTFP).

Negotiation of a Free Trade Agreement between COMESA-EAC-SADC

Transport corridor projects in COMESA-EAC-SADC region financed or in the final
stages of preparation for leveraging private finance;

2,800 Gigawatt hours of electricity traded across new cross-border inter-connectors
between Zambia, Tanzania and Kenya;

Above trend increase in export values and in the share of intra-regional trade in total
trade in COMESA-EAC-SADC region;

Reduction in reported Non-Tariff Barriers to trade in COMESA-EAC-SADC region;
and

Increase in trade-related economic activity of low income households in COMESAEAC-SADC region
Achievements to date

TMSA has contributed to the finalisation of the COMESA-EAC-SADC Tripartite Free
Trade Agreement, annexures and a Roadmap launched at the Tripartite Summit in
June 2011

TMSA has facilitated the operationalisation of the COMESA-EAC-SADC Tripartite
structures and committees; and development of their work programmes

Chirundu, between Zambia and Zimbabwe, opened as Africa’s first OSBP in
December 2009. After two years in operation, waiting times have been reduced by an
average 67% (from 4.5 to 1.5 days) for freight transport and 83% (from 3 hours to 30
minutes) for passenger transport. TMSA is supporting ongoing improvements,
TMSA Annual Review, 2011
Page 36
including a feasibility study on operating Chirundu as a 24 hour border post, and
upgrading connectivity;
6

Since April 2009, large parts of the total network of 8599km of NSC roads, across 7
countries have either been upgraded, are in design or are at planning stages.

The Tripartite Trust Account for corridor infrastructure investment was established in
December 2009 and grant finance has been committed to 3 projects.

TMSA has assisted in finalising the Comprehensive Tripartite Trade and Transport
Facilitation Programme, and work programme. This will ensure a more strategic and
holistic approach to trade facilitation, as opposed to the ad-hoc project approaches
previously followed.

The design and launch of an e-based Tripartite Non-Tariff Barrier (NTB’s) Reporting
and Monitoring System, training of NTB national focal points as well as National
Monitoring Committees. By October 2011, 72% of reported NTBs had been resolved.

Market opportunities for certified fisheries in Mozambique developed. Working with
the Marine Stewardship Council (MSC), TMSA has helped to certify 48 MSC labelled
products, distributed through the two biggest retailers in South Africa—Woolworths
and Pick ‘n Pay.

Working with the Deciduous Producer’s Trust, TMSA has supported the fruit and
wine industry in South Africa to measure and improve their carbon footprint and
maintain and increase South Africa’s share of global fruit and wine markets. The
industry directly employs over 440 000 people with an estimated 2 million
dependents benefitting from increased incomes.

In partnership with IPEX in Mozambique 3 fruit farms, employing up to 1000 workers
(1 farm employing only women) will be assisted to obtain GlobalGAP and organic
certification.

229 small farmers have been directly supported in South Africa, Swaziland and
Zambia to meet regional and international standards and sell their produce to
retailers and suppliers, including Shoprite/Checkers, Woolworths, Marks and
Spencer and Tesco. Produce includes fruit and vegetables. Increased incomes will
directly support over 1000 dependents.
Management arrangements
TMSA is hosted by COMESA, who is responsible for the programme’s fiduciary oversight
through a Memorandum of Understanding with DFID. An Executive Committee consisting of
DFID, COMESA and TMSA provides strategic and operational oversight of the programme.
The TMSA programme management office operates out of Pretoria, South Africa. Four
TMSA technical experts are permanently hosted in SADC and COMESA. All TMSA staff are
appointed on COMESA Contracts.
TMSA Annual Review, 2011
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Annex 4
DFID’s SUPPORT FOR THE COMESA-EAC-SADC TRIPARTITE
through its TradeMark Programmes
DFID is providing support to the COMESA-EAC-SADC Tripartite through two TradeMark
programmes, namely TradeMark Southern Africa (TMSA) and TradeMark East Africa
(TMEA). These programmes differ in nature, content and implementing structures, but they
allow for complimentary support to the Tripartite integration agenda in Eastern and Southern
Africa. TMSA is an inter-REC programme, supporting the COMESA-EAC-SADC Tripartite
regional integration agenda. TMEA is supporting deepening of regional integration within
one REC, the EAC, and Tripartite programmes which are taking place in the EAC
geographical area.
TMSA, was launched on 1 November 2009 and is managed by DFID Southern Africa. It is a
five-year, £100 million, fully DFID-funded programme that promotes regional integration in
East and Southern Africa by working closely with the COMESA-EAC-SADC Tripartite as a
collective, on a limited basis with SADC and COMESA on their REC-specific agendas, the
27 Tripartite member states, and business and civil society organisations in the Tripartite
area. It is:

focusing on harmonisation, rationalisation and design of inter-REC trade, trade
facilitation, infrastructure programmes and industrial policy. It is an inter-REC
programme, attempting to bring all three RECs and thus its universe of 27 countries
under one framework on the 3 Tripartite regional integration pillars. Currently,
regional integration areas, such as financial market integration, are largely covered
by other DFID-SA programmes, thus falling outside TMSA’s functional scope;

supporting implementation of inter-REC pilot programmes – the North South Corridor
(NSC) and One-Stop Border Programmes (Chirundu), with a view of rolling these out
to e.g. NSC spur or East Africa corridors and related trade facilitation programmes;

working with COMESA and SADC on own agendas in areas which strengthen the
basis for Tripartite regional integration (in the areas of market access; regional
infrastructural linkages; and industrial policy). It does not support RECs to deepen
integration by implementing REC-specific programmes, even in the area of trade. It
is also not an institutional development programme, building REC or country
institutions’ capacity. TMSA is spending a small proportion 5% (£1.75m) of its £33m
technical assistance budget on work with the WTO LDCs as a Group on multilateral
trade issues, e.g. helping them to design a position on RoO for NAMA, a gradual
accession position to TRIPS, a special and differential Trade-in-services position. It
does limited LDC country work – only to the extent of helping individual LDCs access
multilateral support mechanisms; and

providing secretariat-type support to the Tripartite institutions. These functions
comprise administrative and logistical support for TTF and sub-committee meetings;
technical support for the development and implementation of the Tripartite Free
Trade Agreement; technical support for project implementation and coordination; and
technical and administrative support for resource mobilisation.
With regard to its implementation, part of TMSA programme budget, amounting to £67m of
CDEL funding, is channeled through a Tripartite Trust Account (established and maintained
by the DBSA in terms of an agreement with the TTF) for investment and North-South
Corridor infrastructure projects. DFID contribution to the TTA is regulated by a partnership
TMSA Annual Review, 2011
Page 38
agreement between DFID and the DBSA. The remaining budget of £33m is implemented
through a partnership agreement with COMESA (following approval by the two other
Tripartite RECs) and regulated through a Programme Management Manual. The £33m is
implemented by a project management unit (PMU), headed by a Programme Director, and
located in Pretoria, South Africa. Part of the support is through 2-3 TMSA-PMU staff located
in each of the SADC and COMESA Secretariats, and through 2-3 programme managers,
helping to strengthen regional-country linkages regarding the Tripartite agenda. The
management structure includes an executive committee, comprising representatives from
DFID and COMESA as well as the TMSA Programme Director.
TMEA is managed by the DFID’s Africa Regional Department. TMEA has (i) a substantial
output and budget to support the development of East Africa’s corridors; (ii) a programme of
technical assistance to the EAC Secretariat including support potentially to transport
corridors, trade, customs, investment climate reform, climate change, and fiduciary reform,
which is in addition to Partnership Fund contributions. Part of this support is through
technical assistants organised within a Tripartite Unit within the EAC Secretariat; and (iii) a
significant programme of assistance to East Africa’s private sector and civil society to
support regional integration and trade.
TMEA is a ‘variable geometry’ programme, building in-country capacity and strengthening
one REC institution (one of the Tripartite RECs and its universe of 5 countries). It works
closely with EAC institutions, national governments, business and civil society organisations.
The programme focuses on national implementation of regional issues as agreed with the
EAC: It also helps to implement EAC Tripartite commitments e.g. corridor development and
trade facilitation components within the EAC. Its scope stretches into other regional
integration themes such as regional business climate and financial markets. TMEA is not
engaged in conceptual, coordination and systems work related to harmonisation,
rationalisation and design of policies, strategies and programmes related to inter-REC
Tripartite trade (e.g. Tripartite FTA and the non-tariff barrier system), trade facilitation (e.g.
the design of a Tripartite comprehensive trade and transit facilitation programme)
infrastructure (e.g. design of a corridor approach to intermodal surface transport and setting
up of common Tripartite infrastructure institutions).
TMEA is headquartered in Nairobi and registered as a not-for-profit company in Kenya.
TMEA is delivered through a Chief Executive Officer / programme director, supported by a
complement of specialists, and 5 country directors (one for each of the EAC countries). The
structure is based on successful models of private sector programmes in East Africa. TMEA
has small country offices throughout East Africa: in Bujumbura, Dar es Salaam, Kampala
and Kigali, as well as a larger office in Arusha. TMEA delivers a national programme in each
EAC partner state as well as regional programmes focusing on its five thematic areas. A
custodian team for TMEA implementation is provided by KPMG. Management structures
include a TMEA Programme Implementation Committee, TMEA national oversight
committee and TMEA Board of Directors. Overall fiduciary approval is provided by a
Programme Investment Committee (PIC – composed of investors and external stakeholders)
that oversees the entire TMEA programme across East Africa.
TMEA’s legal incorporation has allowed it to leverage finance from other development
partners. TMEA’s core budget is £30m, but through crowding in donor (e.g. Denmark,
Belgium and Sweden) and DFID-country contributions, the budget for activities supported
under the TMEA umbrella is approaching 5 to 10 times the core amount.
Coordination between the 2 TradeMark programmes is achieved: (i) on the strategic level
through both programmes participating in the Tripartite Task Force and Sub-committee
meetings and being able to support the Tripartite’s workplan; and (ii) on operational level
through regular contact between the TMSA Programme Director and TMEA CEOs and their
respective teams.
Below is a diagrammatic depiction of TMSA (in blue) & TMEA (in pink).
TMSA Annual Review, 2011
Page 39
TMSA – TMEA Diagramme
Tripartite
+ WTO LDC
Group, &
limited LDC
in-country
work
COMESA
REC & in country
work / support
related to discrete
Tripartite pillars /
programmes such
as the NSC, trade
facilitation, trade
negotiation;
sharing /
exchanging
information e.g.
with country
governments &
private sector
associations on
e.g. the design of
the TFTA; use of
the Tripartite-NTB
system;
opportunities for
the private sector,
etc.
EAC
With countries
c1, c2, c3, c4, c5
Country &
regional
programme
Country &
regional
programme
Country &
regional
programme
Country &
regional
programme
SADC
REC & in country
work / support
related to discrete
Tripartite
programmes such
as the NSC, trade
facilitation, trade
negotiation;
sharing /
exchanging
information e.g.
with country
governments &
private sector
associations on
e.g. the design of
the TFTA; use of
the Tripartite-NTB
system;
opportunities for
the private sector,
etc.
Country &
regional
programme
TMSA Annual Review, 2011
Page 40
Annex 5
LIST OF INTERVIEWED PARTICIPANTS
Name
Mark Pearson
Organisation
TMSA
Designation
Programme Director
Work area
Programme Management,
Corridors and
Infrastructure, LDC's
Stella Mushiri
TMSA
Deputy Programme Director
Programme Management,
Trade Policy, Border Posts,
Trade Facilitation
Charles Chaitezvi
TMSA
Programme Manager:
Customs and Trade
Facilitation
Trade Facilitation, NTB's,
Standards
Vonesai Hove
TMSA
Non-Tariff Barrier Expert
NTBs
Jennifer Rathebe
TMSA
Regional Standards Expert
Standards
John Donovan
TMSA
Programme Manager:
Corridors and Infrastructure
Corridors and Infrastructure
Fudzai Pamacheche
TMSA
Programme Manager: Trade
Policy
Trade Policy
Jean van Schalkwyk
TMSA
Communication expert
Wim van Schalkwyk
TMSA
Business and Information
Systems expert
M&E, Advocacy,
Communication
M&E, Advocacy,
Communication
Sindiso Ngwenya
COMESA
Secretary General
Programme
Management;Tripartite
work programme
Amos Marawa
COMESA
Director Infrastructure
Development
Corridors and Infrastructure
Helen NO Kenani
COMESA
NTB Focal Point for
COMESA
NTBs
Martha Byanyima
COMESA
SPS focal point for COMESA
Standards
Themba Munalula
COMESA
Senior Statistician and Unit
Head
Trade Statistics
Wilson Chizebuka
COMESA
Data Programmer
Divison of Trade, Customs
and Monetary Affairs
Trade Statistics
James Musonda
TMSA/COME
SA
TMSA funded Programme
Manager: Trade Policy in
COMESA
Trade Policy
Kingsley Chanda
TMSA/COME
SA
TMSA funded Programme
Manager: Corridors, Border
Posts and Trade Facilitation,
COMESA
Trade Facilitation
TMSA Annual Review, 2011
Page 41
George Lipimile
COMESA
Competition
Commission
SADC
CEO
Trade Policy
Director Trade and
Investment
Trade Policy
Mapolao Mokoena
SADC
Senior Programme Officer Transport
Trade Facilitation
Jabulani Mthethwa
SADC
Senior Programme Officer Trade
Trade Policy
Dr. Elsie Meintjies
SADC
Senior Program Officer - TBT
Standards - TBT
Maphion M. Jambwa
SADC
Advisor, Regional Statistics
Trade Statistics
Judith Nwako
SADC
Infrastructure Expert
Lovemore
Bingandadi
SADC
TMSA funded Programme
Manager: Corridors and
Trade Facilitation
SADC Infrastructure
Masterplan
Corridors and Infrastructure
Paul Kalenga
SADC
TMSA funded Programme
Manager: Trade Policy in
SADC
Trade Policy, Training and
Capacity Building
Lisebo Mositsi
SADC
NTB Focal Point in SADC
NTBs
Philip Wambugu
EAC
Director for Infrastructure
Corridors and Infrastructure
Willy Muzinguzi
EAC
SPS focal point for EAC
Standards
Nduati Karanja
EAC
NTB Focal Point for EAC
NTBs
Geoffrey Osoro
EAC
Trade and Customs
Directorate
Trade Policy
Barney Curtis
FESARTA
Director
Trade Facilitation
Miyoba Lubemba
ex WTO LDC
Group
ex LDC Intern, WTO LDC
Coordination Group Geneva
LDCs
Robert Hooper
Mack Multiples
Director
Standards
Richard Theotis
Mack Multiples
Project Manager
Standards
Gerard van der
Laarse
Andrew Stock
Shoprite /
Checkers
Freshmark
Director Freshmark
Cathleen
Montgomery
USAID Trade
Hub
Chief of Party + Regional
Integration Advisor
Freshmark project
(Pretoria)
Freshmark project (Lusaka
depot)
Donor coordination
Kelebogile Kgathi
Department of
Trade,
Botswana
Botswana
Exporters and
Manufacturere
rs Association
(BEMA)
NTB Focal Point for
Botswana
NTBs
Communications and
Marketing Manager,
National focal point NTBs
NTBs
Boitumelo
Gofhamodimo
Stemile Dube
TMSA Annual Review, 2011
Project Manager
Page 42
Dr Gideon M. Phiri
Fikani
Regional
Support
Services
Organisation
Life Focus Ltd.
Consultant and Regional
Export Advisor, BEMA
NTBs
Managing Director)
(member of BEMA)
NTBs
Frank Maetsert
TMEA
Programme Director
Joint working. Tripartite
programme
Scott Allen
TMEA
Programme Manager,
Regional Integration
Joint working. Tripartite
programme
Admassu Tadesse
DBSA
Group Executive:
International Division
TTA
Sherine PantonNtshona
Irma Weenink
DBSA
International Division
TTA
DBSA
Project Development and
Partnerships Unit
TTA
Walter Staffetius
DBSA
Project Development and
Partnerships Unit
TTA and NSC projects
Kote Kabo
Director of Roads
NSC projects
Nason Balashi
Ministry of
Transport,
Botswana
RDA, Zambia
Technical Adviser to CEO
NSC projects
Kennedy Mbekeani
AfDB
Chief Regional Integration
Officer, South Africa Field
Office
NSC projects and donor
coordination
Chirundu
Chirundu customs and
immigration officials
OSBP
Team
SPS market access
Sarah Dunn
Shopright
Checkers
DFID
Nick Amin
DFID
Pinky Pheeloane
DFID
Madei Mangori
TMSA Annual Review, 2011
Head of Office
Senior Advisor: Growth,
Trade and Infrastructure
Deputy Programme Manager
Programme Management
Page 43
Annex 6
References
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Africa Development Bank, June 2011: Obstacles and Barriers to Regional Trade,
G20 Development Group, Regional Integration.
COMESA 15th Summit Communique, October 2011, http://www.comesa.int
COMESA-EAC-SADC Tripartite, various Tripartite Task Force documents,
http://www.comesa-eac-sadc-tripartite.org
COMESA Competition Commission website : http://www.comesacompetition.org
COMESA Competition Regulations / Law:
http://www.comesacompetition.org/documents
Deloitte and Touche, July 2011. TradeMark Southern Africa, Report of the
Independent Auditor.
DBSA, unpublished Tripartite Trust Account mimeos
DFID COMESA MOU on TMSA, August 2010
DFID: Operational Plan 2011-2015 / Africa Regional Programme
DFID: Operational Plan 2011-2015 / Southern Africa Programme
DFID: Using Annual and Summary Review and PCR templates, April 2010
GIS website: http://www.tmsagis.co.za
Leighland, J, 2011. Public-Private Partnerships in Africa’s Energy Sector:
Challenges, best practices, and emerging trends. Paper for presentation at UNECA’s
High-level Workshop on “Public-Private Partnerships’ implementation in the Energy
Sector in Africa: Challenges, Best Practices and New Trends” United Nations
Conference Centre, Addis Ababa, Ethiopia, 30 June – 1 July 2011. Unpublished
paper
Minutes of the Friends of the Tripartite Meeting of 13 June 2011 and Meeting
documentation, including the North South Corridor Progress Report, June 2011.
NTB website: http://tradebarriers.org
Third Global Aid-for-Trade Review (2011): http://www.aid4trade.org
TMEA website: http://www.trademarkea.com
TMSA case studies
1 Revamping the Regional Railway Systems
2 Road Corridors in Eastern and Southern Africa
3 Beitbridge - Aid for Trade Story
4 Chirundu OSBP
5 Tripartite Trade and Transport Facilitation Programme
6 Negotiating Tripartite FTA
7 NTB monitoring and removal mechanism
8 INIP case story
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9 Establishing and Managing a regional AfT Programme
TMSA Program Memorandum ( including Logical Framework, Risk Appraisal,
Economic Appraisal, Institutional Appraisal, Program Budget)
TMSA website: http://www.trademarksa.org
DFID - COMESA-EAC-SADC Tripartite MOU, January 2010
UK, February 2011. Trade and Investment for Growth. White Paper Presented to
Parliament by the Secretary of State for Business, Innovation and Skills.
TMSA Annual Review, 2011
Page 44
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World Bank, April 2009. North-South Corridor Brief. Unpublished memorandum.
TMSA Annual Review, 2011
Page 45