John Bosco Kalisa, the East African Business Council (EABC)’s Chief Executive, was recently in Rwanda for a two days courtesy visit to engage local stakeholders on challenges and opportunities in the region. The New Times’ Aurore Teta Ufitiwabo spoke to him on tools for economy recovery, challenges in region and most affected sectors due to covid-19. Excerpts below: What are the top challenges you have seen in the regional private sector so far and what are the potential solution forward? So far there are a number of challenges and one is growing Non-Tariff Barriers (NTBS) to trade across the region. We see numbers of restrictions related to movement of goods and services as well as persons across region. Once those NTBS continue to grow it means it affects the intra-regional trade When you look at the statistics our intra-regional is declining from 20 per cent to now 13 per cent, it’s a big challenge and it’s demonstrated or revealed by the growing number of NTBs claiming. When covid-19 came in there were measures and they were very effective in terms of containing the spread but we have also realized that some have created trade friction and restricting trade as well as movement of persons. What are some of the potential solutions? So I am working on resolving some of the NTBs in terms of engaging and advocacy and research and ensuring that those NTBs hinder movements of goods as well as persons are moved. We also looked at Tax issues at regional level both domestic and even the current external common tariff are still very high for regional competitiveness. Then there is another issue related to standards and are very critical to ensure that consumers have confidence in our products. So the harmonization of standards to ensure that our standards are aligned and facilitating the traders rather than hindering trade is also the challenge I am working on to ensure that the standards are simple, flexible, and predictable and they are known to the traders as well as the consumers. Because they play a critical role in facilitating the movement of goods and services. What can you say about airspace liberalisation? Another challenge I’ve also had is air space liberalization. This instrument is very clear but you find that currently why people are not using the air transport is because of high taxes imposed on our regional airlines. So I am pushing forward to ensure that there is an open space liberalization and removal of those landing taxes on so-called ‘hard taxes’ which are very high for EAC citizens to move by airlines since it would be a means for them to do business across the region. Of course the last one is our trade and logistic challenges. They are still high, the cost of moving goods from ports to final destination is costly. How do we ensure that we improve on our transport infrastructure and embrace digitalization in terms of logistics services? The solution to this is to embrace digital innovation and platforms within the logistics and transport industry. What are EAC governments doing to facilitate the private sector? Governments are doing well in terms of creating a conducive business environment for the business and investment’s life. We have seen efforts by governments in terms of coordination of the measure to contain covid-19, allowing essential goods to move across the region unhindered and we’ve seen the government put in place facilities. For instance, the Rwandan government has introduced economic recovery facilities. The funds for export growth, manufacturing, Micro small Enterprise (SMEs) were put in place. As EABC, what we are doing is to sensitize our private sector to take advantage of those instruments that would support them to do business across region. We are working with the government and our development partners, to get a solution for the challenges. It is a kind of consented effort and measures we are putting in place to ensure that the regional build back better. And the region is more competitive. Then the numbers are very clear that the region should take a leading role in terms of trade and investment. What are the top affected sectors in the region during covid-19? The sectors that registered double digits growth were tourism, Transport and logistics, construction; these sectors have been heavily affected by Covid-19. So for economies to rejuvenate and build better we need to support the recovery of those sectors. How are you supporting the mentioned sectors to recovery? There are a number of instruments we are putting into place. Currently EABC is negotiating with regional financial institutions to restructure the loans for the tour operators and tour investor’s hotel owners to waive off some interest and restructure the loans. Then also Support the players in those sector in terms of getting cheaper and affordable access to finance for them to build back Tax waivers the tax on those sectors we are advocating for the removal of those sectors. Information sharing about some products needs to be uploaded on digital platforms. So that people can access information about the beauty of our region on a website. Again encouraging the government and private sector to sensitize and raise awareness on vaccination for these critical sectors. What are the most resilient sectors by your observation? The agriculture currently when we you look at the sector again what I meant by resilience our regional was able despite the closure of ports and borders was able to feed their people so the production continued especially the foods maize and beans and other products so you see that the poverty number is not growing and we have strong agriculture sector. The same like if we talk about ICT innovation across the regional the number of apps was introduced during the covid-19, they are numbers of instruments we have used to deliver essential goods and even the robots used at the airports to limit the contacts we saw a number of roll out of E-commerce platform across religion in terms of agriculture products, medicine there are important tools were deployed. What are you doing as EABC on reopening of land borders? The region has been affected by covid-19 but we are doing our best to fix this issue. We continue to push for trade information. We are encouraging the private sector to use trade portals so that we could continue to embrace and even do trading using online platforms. We are also encouraging reduction of NTBs around the Borders generally for the tracks and currently we are promoting what we call EAC pass if you have that pass it allows you to move across the EAC especially for track drivers without restrictions. Those are the measures that have been put into place and also to sensitize the border officials to facilitate trade and strong advocacy to remove NTBS around the borders in general. What are the main tools for regional economic recovery? Let’s embrace the continental free trade area. It’s a game changer, one of the tools that will support the recovery to trade in that inter-grated big market of 1.2 billion people. We also need to encourage all EAC citizens for vaccination that’s another tool for recovery Then simplify reduce high interest rate for the bank making the banking services and the bank loans accessible to SMEs Removal of NTBS across regions let’s not create barriers for trade and investment across regions. So EABC with all those, once they are removed we could grow our inter-trade from the current level of 15 per cent to 50 per cent within 5 years.
