Easing cross border trade in East Africa Community (EAC) is gaining momentum. The construction of a one-stop border post at Katuna-Uganda and Gatuna-Rwanda is to start soon.
Governments of Rwanda and Uganda are seeking experts to carry out feasibility studies, a move that will ascertain the cost and the viability of the project.
The project meant to ease international trade comes shortly after the 2009 World Bank Doing Business report ranks the EAC countries as not all that business friendly, when it comes to trade.
The report released 10th September in Washington DC, rates Rwanda, Uganda, Kenya, Tanzania and Burundi in three digits.
Cross border trade
According to the report, Rwanda slipped two positions from 166 in 2007 to 168 in 2008 in the trading across borders indicator.
Kenya did not improve either. The country remained stagnant at the 148th position, like last year.
Burundi dropped 3 places from 167 in 2007 to 170 while Uganda slid from the 141st position to 145th.
Tanzania did not score good marks. The country dropped—three positions from 100 to 103.
Frank Twagira, head of doing business unit at Rwanda Investment and Export Promotions Agency (Riepa)—the government agency coordinating doing business reforms attributes the poor ranking partly to the many non tariff barriers in the East African region.
While addressing the recently concluded East African Investment Conference, in Kigali, President Paul Kagame cited some of the hindrances in doing business in the EAC region as congested and ineffective ports, a lot of bureaucracy at border crossings and dilapidated railway lines.
Until July, this year, importers and exporters shipping through the northern corridor were being subjected to 37 roadblocks and multiple weighbridges.
Much as these stops were wasting the importer’s time, the business community also says they had been turned into bribery centres.
But after several warnings that if these non tariff barrier are not checked the EAC would remain un attractive to investors,
President Mwai Kibaki of Kenya heed the cry.
He directed that all unnecessary police roadblocks in his country be removed. He also ordered the reduction of the number of weighbridges.
Because of these trade barriers, in Uganda, it takes 36 days, costs the importer $3,090 to transport a container of goods from the cost.
For Rwandan, the World Bank report says it costs a businessman $5,070 to transport one container.
The Rwandan businessman will have to wait for 42 days before the consignment is delivered.
Against that backdrop, traders have applauded the move the governments of Rwanda and Uganda have taken to build a one stop border post saying it will partly ease the cross border trade and improve the two countries’ doing business rankings.
“The World Bank report is timely,” a Rwandan informal importer of used clothes from Uganda said, adding, “We waste a whole two hours at Gatuna and Katuna borders before we are cleared.
Eugene Torero, Deputy Commissioner General Rwanda Revenue Authority (RRA) said, as revenue authorities, they have to facilitate trade in line with the objective of the EAC.
According to Paul Kyeyune, the Uganda Revenue Authority’s Public and Corporate Affairs Manager, joint operations will now save time.
“For a businessman time is money,” he said.
Kyeyune said Uganda plans to construct a control centre, a customs building, immigration building, approach roads, commercial service provider’s facilities, vehicle parking yard and installation of a weigh bridge.
When the one- stop border post becomes functional, Kyeyune is optimistic that the volume of trade will also increase and more revenue will be collected as more goods will be cleared in a short time.
EAC will also become an attractive investment destination as most developed countries are using one-stop border, Kyeyune said.