Increasing Africa’s share of vertical investments through Single Window systems

The growth of international trade in recent years has highlighted the importance of customs authorities as the gateway to the global market. However, border delays and inefficiencies resulting from cumbersome documentation requirements have disrupted the flow of goods and acted as a non-tariff barrier to international trade in many African countries. Additionally, these same deficiencies have interrupted the inward flow of vertical Foreign Direct Investment (FDI). When searching for suitable locations to establish manufacturing plants, foreign investors place emphasis on a number of factors such as the cost of exporting, expediency of importing time sensitive production inputs and distance to target markets. Customs efficiency plays a major role in positively influencing these factors and hence forms a crucial part of any investment decision. This article examines the negative impact of inefficient border procedures on vertical FDI inflows to Africa. The article recommends the implementation of single window systems as an investment facilitation tool