Open borders foster trade efficiency in EAC economies

Now that trade operations will ease with the implementation of a 24- hour open border policy at all the entry points, there is cause for optimism as this will further enhance trade in the corridors of the East African Community (EAC).
A fuel truck on the road.
A fuel truck on the road.

Now that trade operations will ease with the implementation of a 24- hour open border policy at all the entry points, there is cause for optimism as this will further enhance trade in the corridors of the East African Community (EAC).

Brightening Rwanda’s prospects of a lucrative trading future.
The implementation of the 24hour-open border policy is meant to ease the flow of goods and services a move that will facilitate importers and transporters to access customs services for longer hours in the EAC including neighbouring Democratic Republic of Congo (DRC).

There is a history to this announcement that comes after comprehensive discussions both internally and regionally on the benefits of an open border policy.

With the re-emergence of the powerful east African economic and trading block whose member states are; Uganda, Kenya, Tanzania, Rwanda and Burundi, developmental efforts are enhanced. 

Strengthening regional solidarity in trade which may ultimately prove to be a win-win in all matters as the countries aim to set up a common market by 2010 ; to free movement of goods, labour and capital. And a monetary union- single taxation federation of the east African member states by 2015.

Kenya for instance has historically had an upper hand in the region enjoying the benefits which come with fair trade.

In almost every aspect of development, Kenya has a functional policy on empowerment, a strong industrial base, a sophisticated agricultural sector, a well developed trade and commercial sector.

Including marketing skills, efficient services, skilled labour force, strong financial institutions and a stable currency.

Last June, the East African Investment Conference was held in Kigali, among issues raised was the apparent lack of liquidity in most of the regions economies and delays in trade emerging from limited working hours at the border posts.

Offering solutions that would purge the obstacles to trade progress in the region these include; open borders, free movement of people, removal of all internal tariffs and open skies.

Commitments further expedited in the announcement by the Kenyan government last August, that its Mombasa port would start operating for 24 hours, though long over due, some kind of hope was born. A declaration made in a bid to increase efficiency and the speed with which goods transit through the port.

For years, the port of Mombassa has been inefficient amid persisting complaints from traders with regards to the duration taken to clear goods, prompting the decision to operate the port for 24 hours.

Yet still, these reforms designed to ease trade in the region need to surge further inland to help make the regions economies more competitive.

Rising to the occasion the Rwandan government took heed and in September announced the opening of the border control posts for 24 hours.

The deputy commissioner general of Rwanda Revenue Authority (RRA) in charge of customs, Eugene Torero, said they would commence gradually by increasing the working hours to 16 at the Gatuna border.

The border posts at Gatuna between Rwanda and Uganda, as well as those between Uganda and Kenya at Busia and Malaba have previously been operating for eight hours daily.

This time limit greatly slowed trade progress between the three countries if not four since Burundi too uses the same route to trade her imports and exports before they reach her customs in Bujumbura.

This on-going investment should not only increase trade in this area but should be the cornerstone for building and increasing the capacity and infrastructure at the port of Mombasa as well as the roads leading to all the different border posts.

On top of the border crossing delays, poor transport infrastructure along the major trade arteries in the region, all help explain why trade development in the region was lagging.

The governments of the region have and are currently investing heavily in the transport infrastructure for instance, Uganda is spending considerable sums of money on the Northern Corridor trade route from Gatuna to Malaba, on top of the efforts it has made, together with the government of Kenya, in revamping the railway network between the two countries.

The tax authorities too, have worked together to speed up customs clearances between borders.

In the case of Rwanda, the RRA does not carry the burden alone. According to Torero, RRA works together with the Rwanda Immigration and Emigration officials, Rwanda Bureau of Statistics, the Police and Army, MAGERWA and other parties.

Torero also added that  the RRA is in discussions with the Tanzania Revenue Authority (RRA) on matters pertaining to the 24 hour operation of the Rwanda-Tanzania border post at Rusumo.

It is in light of this, that the East African Community’s Custom’s Union will be able to help reduce the cost of doing business in the region. It is only through revising the non-tariff barriers, easing the border-crossing delays, that the hidden costs in trade will be exposed.

By investing in ‘hard’ infrastructure and keeping in step quick reforms in the ‘soft’ infrastructure of trade for instance delays and the layers of bureaucracy, trade progress in the region will immensely improve.

It is this regard that keeping the borders open for 24 hours is one quick way of helping our economies become more competitive.

Contact: anyglorian@yahoo.com.

 

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