Cross Border Trade Facing Continuous Barriers

RWANDA’S Trade with other countries continues to face unnecessary barriers placed on the two major routes in East Africa that most of the country’s goods pass through. The so-called Non Tariff Barriers (NTBs) are placed on the roads to Mombasa, Kenya from Kigali and Dar es Salaam in Tanzania from Kigali. These are the two major routes Rwanda’s exports and imports pass through.

Studies show that the Tanzanian corridor has the most NTBs while the route to Mombasa via Uganda has the least barriers. In the Tanzanian route, traders as well as transporters decry the numerous police roadblocks, bribery, weighbridges, and insecurity along the way especially during the night and lengthy customs procedures.

On the Kenyan side via Uganda, barriers that exist include cargo theft, weighbridges and stringent limits of heavy loads that trucks should not exceed while on the Kenyan roads. All of these contribute negatively to Rwanda’s trade where the cost of doing business becomes extremely high thus reducing the nation’s competitiveness.

Vincent Safari, the former Director of Trade and Advocacy at the Rwanda Private Sector Federation(PSF) who is currently the Coordinator of National Monitoring Committee(NMC) on elimination of NTBs under the Ministry of Trade and Industry recently showed that NTBs in the East African Community(EAC) include lack of implementation of EAC harmonised documents which delays trade, lack of harmonised procedures manual which impedes on clearing of imports and delays in transit bonds cancellation which increases the cost of transit.

He also said that there are numerous institutions involved in testing goods and this increases time on the road, which delays delivery of goods.
He said that on the Tanzanian route or the so-called Central Corridor, a survey conducted by the Private Sector Federation and the Ministry found that weighbridges on the road had increased from five in 2008 to eight in 2010 while on the Kenya-Uganda side which is known as the Northern Corridor, there were seven weighbridges on the Kenyan roads and three on the Ugandan side.

Safari said that there were an estimated 30 police roadblocks between Kigali and Dar es Salaam and 36 between Mombasa and Kigali. These cause delays in transport and result into cases of bribery. Kenya and Uganda also have seven procedures for issuing work permits and this affects businesses. A business takes between one to five months to acquire work permits for workers sourced from other EAC countries. Lack of interface within the customs systems in the revenue authorities of the partner states is also seen as a challenge as it delays clearance of goods under customs control and it increases the cost of doing business and loss of market opportunities.

Traders also decry of port charges and customs working hours that are not harmonised across the EAC states. They say there is n inadequate police escort mechanism and this results into loss of business/cargo. The infrastructure such as roads and accommodation facilities are also still a challenge especially to frequent travellers like truck drivers.

All of the above threats increase the cost of doing business in the region. Trade Mark East Africa, a not-for-profit organisation that supports regional integration says that exporting a container of goods from Rwanda costs US$3,275 while importing it costs US$4,990. It says if all the potential threats are put aside, Rwanda could be saving US$42.1 million a year based on 2010 calculations. If the cost of imports and exports goes down by 20 percent, the country could save US$51 million every year.

The increased cost of doing business in Rwanda has prompted the Government and the PSF to move faster and establish the National Monitoring Committee (NMC) on the elimination of NTBs. The committee, which has been in place for quite some time, however, has not been performing as expected because of lack of strategy, resources and organisation.

The NMC is being revived but it could have less impact again. This is because most of the NTBs are not in Rwanda but in the neighbouring countries. The committee does not have legal powers to hold these countriesb that do not eliminate barriers accountable. What the committee will be doing is to list and monitor the NTBs but it does not have the powers to order their removal.

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