East African traders want barriers removed

Kigali, Rwanda (Capital Markets in Africa):- East Africa’s private sector is pushing Rwanda and Tanzania to dismantle the remaining trade barriers according to the East African News. Importers and exporters alike say the barriers are negatively affecting the competitiveness of the Central Corridor by increasing transport costs as a result of delays.

These sentiments were voiced recently at a round-table organised by Rwanda’s Ministry of East African Community Affairs about the removal of non-tariff barriers along the Central Corridor. The corridor is a major import and export route for Burundi, Rwanda, Uganda and the Democratic Republic of Congo (DRC).

On average, it costs USD 4,990 to import a 20-foot container into Rwanda but less in Burundi, Uganda, Kenya and Tanzania. Some of the high costs have been blamed on Rwanda. The country, seen as the champion of seamless flow of goods and movement of people, has been singled out for having too many police check-points.

The Rwandan authorities have also been accused of stopping cargo trucks from entering Kigali City from 4pm to 9pm, which has reduced the turnaround time of cargo transport and contributes to supply gaps.

It is estimated that Rwanda has 15 police check-points while Tanzania has eight. Rwanda National Police spokesman Celestin Twahirwa however said the police checks were in good faith.

Bureaucracy in Tanzania has remained a concern to the business community, which says it impedes the free flow of goods and services. Critics say it costs the Dar es Salaam port a lot of business opportunities as loyal clients go elsewhere.

The port, which historically used to handle 80% of the goods being shipped to and from Rwanda, has seen a systematic dip in cargo handled which has now settled at 60% in 2014, signalling importers and exporters are nervous about the impediments to trade. However, the cost of moving cargo through the corridor could drop as countries along the route move to break the barriers to trade.

Rwanda’s Minister of East African Community Affairs Valentine Rugwabiza said Rwanda and Tanzania will continue to engage both at the bilateral and regional level to address the challenges traders who use the corridor face.

Tanzania had removed 53 police roadblocks, which had become bribery points, by December 2014 and reduced weighbridges by one to seven. Earlier, it reduced the road toll from USD 500 to USD 152 per truck per trip. It also removed the requirement of cash bonds for the transportation of sugar to Rwanda.

East African countries have made significant drives towards promoting trade ties and regional integration and we are of the opinion that the removal of non-tariff barriers and bureaucracy as mentioned above, is another good step to improve and promotion intraregional trade. Therefore,  should aim reinforce the region as a prime investment destination over the next decade.