How single customs territory has cut bureaucracy in EAC trade

Trucks transporting goods to Rwanda from Tanzania. Nadège Imbabazi.

Customs bodies and the business community across the East African Community (EAC) have praised the positive gains from the single customs territory, saying it has eased business and reduced malpractices that had characterised regional trade.

The initiative was introduced in 2013 to improve efficiency in doing business in the region.  It seeks to ease doing business across the bloc by electronically processing goods and releasing them from the country of destination prior to loading and releasing from the port.

Now members of the business community and revenue collection authorities alike say the system has reduced the bureaucracy associated with documentation by 80 per cent.

In addition, regional customs officials say, the single customs territory eliminated customs duties and other restrictive regulations such as internal border customs controls, hence reducing tariff and non-tariff barriers to trade in EAC.

According to Ben Usaje, the Commissioner of Customs and excise at Tanzania Revenue Authority, single customs territory has reduced the turnaround time from 18 days to four days from Mombasa in Kenya to Kampala in Uganda and from 21 days to five or four days from Mombasa-Kigali. 

He added that the time it takes to ferry goods from Dar-es-Salam in Tanzania to Bujumbura in Burundi reduced from 18.5 days to 4-5 days.

Officials also said that real time sharing of customs information upon arrival of goods at the port have lessened internal border controls.

“The use of single customs territory has helped us to curb the problem of dumping of goods which was a common phenomenon and rampant which resulted into tax evasion.  We had cases where the goods which pass through Tanzania never reached the final destinations but were dumped inside Tanzania without paying taxes,” he said.

Usaje added: “The member countries have also benefited because they are getting taxes paid upfront and are getting revenues at the right time unlike in the past where they had to wait until someone was asked to pay taxes”.

Yassin Billo, the Export Manager at Azam Bakhresa Group, said the clearing process is now fast.

“Export has become easier, whether we are exporting local or foreign products, it is easier in the sense that now you send an invoice of the cargo, declare and then you receive a document showing that you have paid customs and the exit document, and there are no more stopovers to check the cargo. This has reduced time. Our trucks can now do more trips than before,” said Billo. 

All ports operate regularly, which allows the importer and transporter to use the shortest time possible to clear and move goods from the point of entry to destination partner state, he added.

Meanwhile, Richard Tusabe, the Commissioner General for Rwanda Revenue Authority (RRA), recently said that, as a result of reduced number of transportation days between Mombasa and Kigali, there were improvements in trade.

“The cost is coming down but also it has given us good visibility; we now share a common platform under the single customs territory of electronic cargo tracking. I can seat here and see that a certain consignment of goods is still on the Kenyan soil and when it reaches Uganda I can see it, so it has given us confidence that there are no goods that are being diverted from one jurisdiction to another jurisdiction inappropriately,” he said.

He added: “So single customs territory has been a game changer. Traders here can declare goods when they are at the port, even before the  ship docks you can tell that it is about to get there and start your clearance process as opposed to the old way when the driver used to come with documents to Kigali then you start the process”.

Need to harmonise electronic cargo trucking  

According to Liliane Awinja, the Executive Director for the East African Business Council (EABC), the regional bloc has a lot to celebrate not only in easing business but also in the integration process overall.

She, however, stressed the need for Burundi and Tanzania to adopt the use of the electronic cargo tracking system as the other partner states. 

“When goods are cleared before they arrive and released, this is good for business, but the electronic cargo trucking is not active Burundi and Tanzania yet it is supposed to be operational across all the partner states with view to achecking diversion of products and make the single customs better,” she said.