Reforming African customs : the results of the Cameroonian performance contract pilot
2011
A fundamental problem facing attempts to facilitate international trade in Sub-Saharan Africa is the inefficient and sometimes corrupt state of customs agencies. Fraud, corruption, and other bad practices in customs agencies create disincentives and barriers to trade, and can result in negative spillovers throughout the rest of the economy. This policy note presents the results of an innovative pilot program of performance contracts implemented in Cameroonian customs agencies over a six-month period in 2010. The pilot program was the first of its kind and no similar project has been carried out in fiscal administrations anywhere in the world. As a result of the program, in less than two months the behavior of participating customs inspectors changed significantly for the better, leading to reduced clearance time, increased revenues for the Cameroonian Treasury, and a reduction in harmful corruption-related practices. The outcomes of the project undermine the assertion of many customs officials that there is a tradeoff between trade facilitation and customs revenues. The main policy conclusion that can be drawn from this finding is that a mixture of performance incentives for good work and sanctions on bad practices can lead to both trade facilitation as well as increased government revenue, both factors that would help economic growth and development in African countries.
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