The balanced scorecard as a strategic management tool to improve the performance of Lesotho's customs administration

Abstract

The main role of Customs Administration is to collect and safeguard import revenues and regulate and document the movement of goods in and out of a country (Lewis, 2009:4). Globalisation, the accompanying increase in international trade, and technological innovation have led to the need for online access and processing as transaction volumes keep increasing. Lesotho’s Customs has been facing complex challenges related to these factors (LRA, 2014). To curb these challenges, the Lesotho Revenue Authority’s (LRA’s) Customs Operations have been automated by the introduction of the Automated System for Customs Data (ASYCUDA). The main research objective was to evaluate the performance efficiency of ASYCUDA as well as the changes that were made to align the ASYCUDA activities towards a modernised Customs Administration in order to curb the challenges. This performance evaluation was done using the strategic management accounting tool, the Balanced Scorecard. The research was a qualitative case study. Semi-structured interviews were conducted to collect data from ten participants who were selected using purposive sampling. This sampling was based on the participants’ experience, knowledge and Customs expertise. The sample comprised three Customs management officials, three Customs employees and operators, and four Customs forwarding and clearing agents representing the trading community. With regard to the post-implementation of ASYCUDA within the LRA, the study revealed that benefits have accrued to both the LRA and the trading community. Benefits included increased Customs revenue, reduced Customs processing costs, and the simplification of processes and procedures, which, in turn, has reduced red tape and resulted in shorter processing times. However, the LRA and the trading community are still experiencing some challenges such as system downtimes and the fact that not all border posts have been automated. The latter creates confusion among traders and causes loss in revenue at the unautomated points of entry (border posts). Based on the findings, the study concluded that the system has brought benefits to the LRA and trading community, although there is room for improvement. It is therefore recommended that the LRA adopt the use of the Balanced Scorecard in monitoring and evaluating Customs

performance. This will enable the LRA to assign performance metrics to and evaluate the Balanced Scorecard’s four dimensions, namely customer perspective, internal business perspective, learning and innovation, and the strategic and financial perspective. The latter perspective will give the LRA a full view of Customs performance.