Rwanda, DR Congo implement crucial cross-border scheme despite hurdles
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She rocks her baby, rubbing its back as she softly sings a lullaby in the Congolese language of Lingala.
Aline Tswala turns to look at the visitor coming her way and signals to me not to speak a word that will most likely awaken her little one.
She whispers, assuring me that we will talk when the baby falls asleep. True to her word, when the toddler falls asleep, Tswala calls me to join her at a nearby restaurant for a chat.
“I trade in fresh vegetables and fruits. I’m at the border now to ensure I comply with what the authorities demand of us, before I head to the market,” she tells me from the Rwandan side of the border.
Tswala is one of the small-scale Rwandan and Congolese traders who are benefiting from the Common Market for Eastern and Southern Africa (COMESA) Simplified Trade Regime (STR) regional programme.
STR is a programme aimed at facilitating small-scale cross-border traders among COMESA member states with an agreed threshold of US$2,000.
The harmonised common list of eligible products was launched in October 2016 to allow the traders to import products not exceeding the value of US$2,000, duty free.
Other than just the agreed list of goods, Rwanda and DR Congo signed a Memorandum of Understanding to enable more growth of this cross-border trade.
As a way of helping the traders, Rwanda and DR Congo, both COMESA members, translated the agreed list of common products into local languages and developed a guide booklet.
“The regime will significantly improve the livelihoods of cross-border traders, especially women who are more active in cross border trade,” said James Tayebwa, the Cross border Trade Policy Specialist at Rwanda’s Ministry of Trade and Industry.
In September 2017, the two countries conducted a joint awareness campaign on the STR in Rubavu and Rusizi, respectively, as part of the ongoing implementation process of the bilateral ministerial agreement between the two governments intended to facilitate trade.
“This is all intended to facilitate trade and eliminate non-tariff barriers (NTBs) that affect cross-border trade at our borders,” Tayebwa added.
Activities conducted so far include; designation of a joint technical committee for facilitation of cross-border trade between Rwanda and DR Congo, and the designation of signatories of certificates of origin.
A certificate of origin is a trade document certifying that goods are manufactured, produced, or processed in a particular country.
Rwanda raises concerns
Tayebwa observes that while it’s a very positive regional initiative that will boost trade, there is currently a challenge arising from the DR Congo side banning some products without prior notification to their Rwandan counterparts.
“There is also continuous tendency on the DR Congo side imposing tariff and non-tariff barriers on products from Rwanda,” he said.
Restricted products by DR Congo include; animal products such as fish, chicken, eggs, meat entering Goma market.
Tayebwa’s observation was echoed by Peter Ndikumana, a Rwandan cross-border trader along the Rubavu-Goma border who said DR Congo officials levy ‘illegal taxes’ on them as opposed to STR provisions. “We are not required to pay any import tax but DR Congo officials in Goma keep charging us money that we officially aren’t supposed to pay,” he said.
By press time, efforts to speak to officials from the DR Congo side were unsuccessful.
But George Lipimilie, the Chief Executive Officer of the COMESA Competition Commission notes that his commission, is fully focused on having member states abolish such trade barriers.
He argues that COMESA’s focus on free movement of goods has generally paid dividends resulting into a lot of cross-border mergers and acquisitions.
A merger can be one company and the other coming together so that they create a greater market position within member states.
Lipimile notes that; “There are situations when foreign companies use acquisitions to enter the market where you find a multinational company buying a local company which is good because it comes with a lot of technology.”
A study conducted by the COMESA, dubbed Intra COMESA trade potential, found that wealth valued US$86billion is un-utilised and that many member states do not even know that they have such wealth.
“Our report actually details which products a given country should be producing. Each country has a competitive advantage in a particular product but they aren’t doing so because they aren’t aware of it. Yet this is in COMESA countries alone, in Africa as a whole it is much bigger,” Francis Mangeni, the COMESA Director of Trade and Customs told The New Times.
He added that the report’s recommendations were presented to COMESA ministers who came up with decisions that will lead to a work plan on how to exploit the potential. This includes provision of market information by member states.
Lipimile attributes the untapped potential to lack of capital by member states to use the raw materials.
“That is why we are encouraging foreign capital to come in and start new businesses so that raw materials can at least be processed at local level so that we can become exporters of goods, not raw materials,” he said.
Lipimile adds that; “That untapped resource will always remain there because it is so vast. We have seen China taking advantage of our raw materials and we hope more countries can follow suit.”
Mangeni called on member states to emulate Rwanda which he said has scored ninety per cent in terms of implementation of COMESA regional programmes.
In July last year, countries under the tripartite of COMESA, East African Community (EAC), and Southern Africa Development Community (SADC) moved a step closer to forming a larger free trade area.
This came after ministers and senior officials from the member countries met in Kampala, Uganda to resolve issues that prevented them from ratifying the ‘historic’ Tripartite Free Trade Area (TFTA) that was first signed by African leaders on June 10, 2015, in Egypt.