How new initiatives will improve trade in Rwanda and EAC bloc

Over the past few years, regional governments have stepped up efforts to improve the business environment and promote cross-border trade. This has involved building of new infrastructure and enacting new business supportive policies. These initiatives were largely responding to traders’ outcry over numerous barriers, like poor roads, delays at border posts and multiplicity of tax declaration at various points across East African Community (EAC) bloc, which hurt trade. Rwanda, for instance, has embarked on setting up modern one stop border posts (OSBPs) to ease clearing of cargo and individuals at borders. Also, unlike the previous setting that characterised border posts, the new system will see all agencies from EAC countries operating under one roof.  
Ongoing works at Rusumo bridge and one stop border post at the Rwanda-TZ border. Infrastructure projects like this will play a key role in promoting trade across the region.   The ....
Ongoing works at Rusumo bridge and one stop border post at the Rwanda-TZ border. Infrastructure projects like this will play a key role in promoting trade across the region. The ....

Over the past few years, regional governments have stepped up efforts to improve the business environment and promote cross-border trade. This has involved building of new infrastructure and enacting new business supportive policies. 

These initiatives were largely responding to traders’ outcry over numerous barriers, like poor roads, delays at border posts and multiplicity of tax declaration at various points across East African Community (EAC) bloc, which hurt trade. Rwanda, for instance, has embarked on setting up modern one stop border posts (OSBPs) to ease clearing of cargo and individuals at borders. Also, unlike the previous setting that characterised border posts, the new system will see all agencies from EAC countries operating under one roof.

Already, some border posts like Nemba at the Rwanda–Burundi border in the Eastern Province are operational, which has excited traders and made crossing easy for other travellers as clearing of goods is done under one roof.

Ruhwa border post in Rusizi District at Rwanda-Burundi border is also operational, and offering the same services.  

“It is now easy to clear goods at the border since all the border agencies like immigration, revenue authorities and standards bodies work from the same building,” Claude Mutsinzi, a business man who exports foodstuffs to Burundi said in an interview with Business Times. Mutsinzi said previously one would spend many hours to have their merchandise cleared by customs officials, which he said delayed deliveries and ate into their earnings.

Under OSBP, services are harmonised with incoming and outgoing traffic jointly cleared by officers from both countries on either side of border, according to customs officials.

Regional traders had for long complained about the issue of delays at border posts because government agencies work autonomously hence the need to harmonise their operations.

“Many times traders have had to increase prices to recover the money lost due to delays,” Mutsinzi noted. He added that he is now able to deliver supplies on time thanks to the one stop border post at Nemba.  

According to John Bosco Kalisa, the acting country director for TradeMark East Africa Rwanda office, the one-stop control arrangements and collaboration of border agencies in the key areas are expected to reduce the time to cross the border by 30 per cent. “There are other benefits like reduction of administrative costs and increase of commercial activities,” Kalisa said.   

He noted that OSBPs and the introduction of integrated border management helps modernise border posts, giving border agencies an opportunity to improve their services and build institutional capacity ‘since they have new infrastructure and other related facilities’.

“OSBPs will improve management of individual agencies and their standing in the local community. They will also prepare them to contribute to the regional integration agenda, which will eventually boost economic growth and reduce poverty,” Kalisa pointed out.

OSBPs will be complemented by the electronic single window system that has been introduced across the region to further ease the movement of goods and services and boost investments in the region.

Nathan Gashaija, the director of economic and financial sectors at the Ministry of EAC, said one stop border posts will encourage cross-border trade and hence increase economic activity in the region.  

“They will also ease the movement of people, which means increase in trade. Besides, the delays that were being experienced at borders will cease when all the OSBPs under construction become operational,” he said.

He said reducing other non-tariff barriers will improve regional economies, which is the main objective for the integration process.

In the other areas, the construction of Rusumo border post at the Rwanda-Tanzania border is nearing completion, with the work now at 81.6 per cent of work complete. 

Works are ongoing at the Kagitumba one stop border post; while there are plans to build OSBPs at Gatuna border, the busiest crossing point between Rwanda and Uganda, and Cyanika at Rwanda-Uganda border.

According to Bonaventure Nsabimana, the public relations and communications officer at the Ministry of Infrastructure, La Corniche border post in Gisenyi sector, Rubavu District, which connects to the DR Congo, will also be upgraded.

These developments are in line with regional leaders’ efforts to improve the business environment and reduce the cost of trade. The initiatives support other efforts like the single customs territory, which has helped reduce the days that the trucks spend on the way from Mombasa. Goods destining for Kigali are now cleared from the first point of which allows the cargo trucks to move freely. This has reduced travel time from Mombasa to Kigali from 22 days to four.

The cost of transporting the cargo containers from Mombasa to Kigali has also dropped from $5,000 to $3,300.

Last week, Kenya like Rwanda introduced the use of electronic single window system to help clear goods destined to other regional countries including Rwanda. The system is expected to centralise trade services such as tracking of goods, custom clearance and electronic payment, including through mobile money.

The system will also integrate with Kenya Revenue Authority, making the clearance at Kenyan ports faster and easier.

Kenyan president Uhuru Kenyatta said at the launch of the facility: “Our ultimate vision should be to implement an EAC regional single window platform. The benefits from this initiative may not be fully realised unless all of us in the region adopt national single window systems. “Our brothers in Rwanda are already implementing a single window system and similar efforts are underway in Tanzania and Uganda,” Kenyatta said.

The function was attended by EAC leaders.

In fact, the Heads of State and government attending the concluded Northern Corridor projects summit in Nairobi directed partner states to develop a harmonised standard for cargo tracking systems to facilitate seamless flow of goods along the corridor. The new system aims at facilitating and easing the movement of goods across EAC.

When the systems is implemented, it will make it possible to track all vehicles transporting goods along the Northern and Central corridors and monitor the movement of transit cargo across the country to ensure that it reaches its intended destination.

Mombasa handles over 50 per cent of Rwanda’s imports and exports.  

 

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