Against a backdrop of global developments such as ever-growing complexity of trade, digitalization of procedures and heightened transparency-related expectations, performance measurement has become a strategic issue for Customs administrations. In the case of Madagascar – an island country facing unique economic, logistical and security challenges – the performance of its Customs Administration is a vital source of leverage for revenue collection, trade facilitation and efforts to boost the credibility of public service measures.

Over the past decade, Malagasy Customs has embarked on a gradual transformation of the way it handles performance, moving away from an approach which primarily involved the description of results and towards a management culture based on the strategic analysis and use of data. In the remainder of this article, we will outline the different stages of this journey and highlight the challenges encountered, the lessons learned and the prospects for an increasingly data-driven management approach based on well-informed decisions.

Malagasy Customs initially introduced structured performance measurement initiatives back in 2016. Against a backdrop of pressing demands in terms of revenue collection and institutional accountability, the main goal at this time was to gain a more objective overview of the work carried out at operational level, especially by the main office at Toamasina Port, the country’s main point of sea entry.

These initiatives took the form of successive pilot projects, in particular the gradual roll-out of a system of performance contracts (using figures derived from tracking indicators) to offices of high economic importance and offices delivering strategic services, with the relevant contracts then concluded in person between the Director General for Customs and the individual managers. Restrictions were deliberately placed on the targets set and indicators chosen in order to ensure that they primarily related to outputs of a purely fiscal nature or compliance with processing deadlines.

Although these early experiences were disparate in nature, they made it possible to lay the groundwork for a broader debate on performance management, and also highlighted several structural challenges: the absence of reliable data and standardized calculation methods, the lack of managerial ownership of indicators and the need for a shared methodological framework.

As time went on, these findings prompted Malagasy Customs to look for an internationally recognized benchmark that would serve as a long-term framework for its approach.

The drafting and implementation of the 2020-2024 Strategic Plan marked a decisive milestone in this process. Right from the very outset, the Strategic Plan was built around the four dimensions of the WCO’s Performance Measurement Mechanism (PMM), which are as follows:

–    trade facilitation and economic competitiveness;

–    revenue collection;

–    enforcement, security and protection of society; and

–    organizational development and human capital.

Strategic goals were set for all four of these dimensions and then broken down into 31 modernization projects, each accompanied by performance indicators with a view to ensuring coherent links between the strategic vision, the operational priorities and the follow-up mechanisms.

Project No. 28 – relating to the evaluation of organizational and individual performance – played a central role in this context, since it was established by Malagasy Customs with the underlying goal of maximizing the use of information with a view to steering public service measures more effectively and responding better to the expectations of the government, economic operators and users. The project’s aim was to establish a performance measurement mechanism operating at various levels, with the long-term objective of giving greater responsibility to Customs officials and highlighting their work by emphasizing its real impact on the overall performance of Malagasy Customs.

By the time the Strategic Plan came to an end in 2024, this approach had resulted in the widespread adoption of performance contracts and target-based agreements, which were signed with all Customs auditors/liquidators. All managerial staff across the whole of the island (including both local line managers and their superiors at the main office) were required to help implement a mechanism incorporating targets, measurable indicators and managerial responsibilities, which led to improvements in terms of the coherence of measures, managerial accountability and the quality of dialogue between the line managers and their superiors.

A “performance unit” reporting directly to the Director General was set up back in 2016 when the pilot projects first began, and initially had a limited remit focused on the monitoring of performance contracts concluded with auditors within the Toamasina office.

Under the 2020-2024 Strategic Plan, this unit evolved into a fully fledged specialist service known as the Quality and Performance Management Service (QPMS). This institutional development marked a key milestone in the strengthening of performance management processes.

The QPMS is currently staffed by seven Customs officials with a range of expertise covering not only field inspection and control activities but also data analysis, IT, statistics and applied mathematics as well as strategic management and public administration. This balance between grassroots experience, advanced data skills and performance management allows the unit to transform “raw” information from Customs operations into strategic analyses that can be used directly as a basis for decisions.

The QPMS comprises four divisions, whose remits complement each other and encompass the entire performance chain:

• Planning and Performance Obligation Division (PPOD), responsible for strategic planning and the drafting of performance contracts and target-based agreements, as well as for following up on commitments already made;
• Organizational Development and Methodology Division (ODMD), responsible for the design and ongoing improvement of measurement methods and the alignment of indicators with international benchmarks, in particular the WCO’s Performance Measurement Mechanism (PMM);
• Analysis and Strategic Reporting Division (ASRD), specializing in advanced data analysis, the production of strategic dashboards and assistance with decision-making;
• Quality Culture Division (QCD), tasked with promoting continuous improvement, accountability and the professionalization of practices.

The institutional affiliation of this service has also changed, since it now forms part of the Directorate for Resources and Training (DRT) and works closely together with the Human Resources Service and the Equipment and Training Service.

The aim of this repositioning within the institutional landscape was to guarantee a permanent place for performance in HR policies, skills management and future data-driven decisions based on individual and organizational evaluations. In keeping with this approach, it is now possible to include a stage within workforce planning and mobility processes where the competent authority makes use of the performance results for individual officials as a source of information before taking its final decision.

With a view to tracking and evaluating individual and collective performance, the Quality and Performance Management Service (QPMS) developed and put forward for adoption a methodology based on z-score normalization (also known as standardization), which is a statistical technique used to transform data into a standardized format.

This approach overcomes a limitation which is frequently encountered in connection with performance measurement mechanisms: an isolated or strictly descriptive reading of indicators (revenues, taxation ratios, time frames, reassessments, etc.) can result in partial or even biased interpretations of the observed results. The use of z-scores allows this limitation to be circumvented by transforming the raw data into standardized and comparable scores, thereby eliminating the impact of different volumes of trade, different types of goods and different types of operational settings.

In practice, this approach allows performance to be analysed fairly and on a combined basis by highlighting significant deviations from the broader trends observed within homogeneous benchmark groups. This means that managers have access to a fairer and more contextualized overview of results, which promotes analysis-driven decisions rather than a simple comparison of absolute values.

When deciding on a framework for its national performance mechanism, Malagasy Customs relied on the WCO’s Handbook on Performance Measurement (HPM). Although the HPM does not provide lists of indicators (KPIs), it contains definitions of various indicator types, a sample metadata sheet for the documentation of each KPI and guidance on the organization of dashboards.

Malagasy Customs also referred to the Performance Measurement Mechanism (PMM) for the purpose of gradually rolling out a number of its KPIs. Although due consideration was given to the operational circumstances that are unique to Madagascar, this roll-out nevertheless posed several challenges, especially as regards the mapping of national data and their alignment with the PMM definitions as well as the availability of certain data types and their homogenization.

Malagasy Customs has also played an active role in the first cycle of the PMM by submitting data through the relevant online platform. In keeping with a non-competitive benchmarking approach, it consults the aggregate indicators and results shared by other Member administrations for the purpose of learning and internal ranking. Time release indicators – which are used to assess Customs release times and identify margins for potential improvements in the goods release chain – are a focus of particular attention.

As well as the figures themselves, the metadata sheets for the PMM KPIs also represent a valuable source of information, since they allow the choices made by other administrations in relation to definitions, calculation methods and scope to be analysed with a view to gaining a better understanding of indicators not yet in use by Malagasy Customs. This approach not only facilitates pre-emptive debates on the assimilation of these indicators in the national context, but also makes it possible to address methodological challenges and, in due course, to prepare for the generation and transmission of reliable and comparable data under the PMM.

As well as using the PMM as a benchmarking framework for internal management purposes, Malagasy Customs plays an active role in the maintenance and enhancement of this framework by contributing to technical discussions at the level of the PMM project team.

For example, a formal proposal was tabled and adopted concerning the inclusion of new key performance indicators (KPIs) relating to precious and semi-precious mineral resources, in particular gold. This sector presents Madagascar with major challenges, not only in economic and fiscal terms but also as regards environmental and security considerations.

The proposed KPIs involved changes to the qualitative and quantitative nature of the data collected and improvements to the efficiency of Customs controls for these specific flows, with the aim of better measuring the real impact of control measures and enhancing the capacity of Customs administrations to evaluate the performance of the instruments deployed in these high-risk contexts.

The incorporation of these indicators into the PMM framework demonstrates the capacity of Malagasy Customs to adapt international tools to national circumstances while actively contributing to the ongoing improvement of the WCO’s methodological framework. It also signals a commitment to leverage the lessons learned from first-hand experience for the benefit of the international Customs community.

The experience of Malagasy Customs serves as ample proof that performance measurement – when approached not merely as a simple reporting exercise, but as a tool for learning, steering and decision-making – is a powerful lever for institutional change. By gradually moving over to a data-driven approach, Malagasy Customs has been able to implement changes to its managerial practices, improve the coherence of public service measures and better align its strategic priorities with the expectations of the government, economic operators and users.

Looking to the future, Malagasy Customs intends to move further in this direction, to build its analytical capabilities and to carry out a phased expansion of a performance-driven culture to encompass all of its officials. The ongoing aim is to make performance a tool that can be used for the purpose of facilitating trade, collecting revenues and boosting integrity and trust in a rapidly changing environment, in accordance with the vision and benchmarks established by the World Customs Organization.