Revised transit fees to boost regional trade

Tanzania has reduced road toll charges for Rwandan-registered trucks from $ 500 to $152, a move that will see truckers from the two East African countries pay a harmonised fee.
Trucks at the Rusumo border post. A reduction of $348 will have a huge impact on Rwandan business, according to experts. The New Times/Timothy Kisambira
Trucks at the Rusumo border post. A reduction of $348 will have a huge impact on Rwandan business, according to experts. The New Times/Timothy Kisambira

Tanzania has reduced road toll charges for Rwandan-registered trucks from $ 500 to $152, a move that will see truckers from the two East African countries pay a harmonised fee.

The revised fee, that has excited the business community, is expected to increase traffic along the central corridor and boost regional trade.

For some time Rwandan trucks were charged $500 (Rwf327,760) by Tanzanian authorities, while Tanzanian- registered trucks paid only $ 152 (Rwf99,639) to enter Rwanda.

This was regarded as unfair and the Rwandan truck drivers’ outcry to push Tanzania to harmonise its charges fell on deaf ears. 

Last week, in the spirit of Reciprocity, Rwanda Revenue Authority, announced that it would increase its charges to $500 bringing it level to Tanzania  and gave a notice of one week to implement the changes.

However, William Mgimwa, Tanzanian Finance minister announced on Tuesday that their road toll has dropped to $152 per truck, in time to beat the one week ultimatum given by Rwanda.

The change in Tanzania means its rates are now in harmony with Rwanda’s rates.

“We finally realised that if we stuck to our guns, Tanzania was likely to suffer because our colleagues (Rwanda) have fewer vehicles entering our country (Tanzania) compared to our trucks headed for Rwanda,” Mgimwa said.

Rwanda’s minister for Finance and Economic Planning Amb. Claver Gatete confirmed the developments.

Speaking to The New Times, Gatete said he had received a written communication from his Tanzanian‘s counterpart confirming the lowering of road fees.

“The Tanzania finance minister has written to me confirming the lowering of road fees from 500 dollars to 152 dollars” Gatete said.

Drivers welcome changes

Rwanda long distance truck drivers welcomed the move as “a balanced approach of doing business.”

“Harmonising road fees is a fair game for us in business, unlike in the past both sides can now compete favorably for the markets,” Theadore Murenzi, chairman Rwanda Long Distance Truck Drivers Association told this paper yesterday.

Traders called upon both sides to jointly start looking at ways of how the road toll can be reduced in the near future to reduce the cost of conducting regional trade.

Road toll has been listed among trade barriers by those championing the single customs territory.

“While the issue of unfairness has been successfully dealt with,   the next step should be on how both sides can reduce on these fees to the level in conformity with the single customs territory ideologies,” Fred Seka chairman clearing and forwarders association in Kigali said.

Vincent Safari, the national co-coordinator in charge of non-trade barriers at the Ministry of Trade and Industry said that the issue of road fees being a trade barrier had been raised at the EAC secretariat.

“The secretariat is looking at ways of how roads fees will be harmonised across member states in a bid to boost regional trade,” Safari said.

The comparison 

Tanzania has been charging $6 per 100km for trucks with two to three axles. Those with four and above axle load paid $16 per 100km covered something that Rwandan drivers have been complaining about.

Uganda and Kenya charge about $per truck in transit fees. 

The reductions are likely to result into cheaper prices for some commodities coming from Tanzania mainly rice and sugar, according to observers.

A reduction of $348 according to Seka will have an impact on Rwandan business.

This, Seka said, will lead to increased in-bound and out- bound business traffic, and increased business frequencies will mean more profits which will contribute to the economic growth of the country.

“We cannot underestimate the fact that this will make business more competitive and attractive an ideal for economic growth for both sides,” he said.

The central corridor is about 1700 kilometers, stretching from Bujumbura through Kigali to the coastline at port Dar es Salaam and is a shorter route when compared to the northern corridor which is about 1900 kilometers and stretches all the way from Bujumbura, through Kigali, Kampala, and Nairobi up to the coastline port of Mombasa.

 

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