NON – Tariff Barriers (NTBs)—the non tax hindrances to free flow of trade in the East African region may soon be history, as the private sector is using every fora to attack countries still bent on this bureaucracy slowing business.
A delegation of East African Community (EAC) council of ministers, led by Eriya Kategaya said the issue will be tabled at the next meeting.
The development comes months after Rwanda Private Sector (PSF) conducted a survey on NTBs along both Northern and Central Corridors.
The Northern corridor, which is 1,720 kilometers, stretching from Kigali to Mombassa accounts for about 60 percent of trade to Rwanda—(imports and exports), whereas the central corridor, which is 1, 648 kilometers, stretching from Kigali to Dar el Salaam accounts for close to 40 percent.
A draft report was on Friday 12th October 2007 presented to stakeholders during a half-day validation workshop at PSF headquarters.
Among the representatives of key institutions were Eugene Torero, the deputy commissioner general and commissioner in charge of customs at Rwanda Revenue Authority (RRA) and Victoria Kakwa the country director of the World Bank.
The Secretary General of PSF, Emmanuel Hategeka, in his opening remarks said persistent complaints from importers and exporters on NTBs drove the federation to conduct the survey…to not only prove what traders alleged, but also gather more concrete evidences that would be filed in a report to be used at different fora to advocate for sustainable solutions to NTBs.
He highlighted key NTBs gathered from the survey as poor infrastructure; un-harmonised fees, duties, policies, rules and regulations; poor border facilitation that causes delays; corruption among traffic policemen and some customs officials among others.
He noted that NTBs are a main factor contributing to high cost of doing business in the region…quoting from recent world bank “Doing Business in 2007” report that on average it takes 95 days to export and 60 days to import in Rwanda.
The PSF survey team was led by John Bosco Kalisa the director of trade and integration. He said prior to the survey, a checklist was drawn against which different stakeholders in Rwanda, Kenya, Uganda and Tanzania were engaged.
He spelt out the cardinal objective of the survey on PSF’s part as enhancing quality member service—one of the five key priorities contained in the federation’s 2007-2010 strategic plan.
Kalisa said stakeholders’ views would be incorporated in the draft report to come up with a final report by end of this month.
The PSF intends to use the report, in collaboration with sister institutions in EAC, to push for sustainable solutions to NTBs.
John Bosco Kanyangoga, the director of advocacy and institutions relations department at PSF observed that NTBs are generally known to stakeholders…”what is required now is expediting solutions to NTBs”.
The draft NTBs report provoked arguments, heated discussions and revelations.
World Bank’s Kakwa wondered whether petty fees charged by policemen and some revenue officials to transit trucks are legal and ever end up in revenue authorities’ coffers.
In response, Kanyangoga said petty bribes to police and other officials are certainly illegal but others like compulsory parking fees and weighbridges fees “are institutionalised, although do not make a lot of sense.
“A truck must pay for parking fees regardless whether it actually parks or not. There are so many weighbridges en-route that not only delay trucks but are also breeding grounds to rip-off transporters”.
Transporters are restricted on tonnage (to only 24 tonnes depending on size of truck) and to only three axles to reduce roads damage.
Weighbridges are installed en-route to check on the tonnages. A truck carrying excess tonnage is charged penalties that are apparently not harmonised in the EAC member states.
Between Gatuna border and Kigali there is no single weighbridge. Torero noted that the road is getting damaged so fast because there is no control on tonnage en-route at all.
He however disclosed that infrastructure ministry would install a modern weighbridge at Gatuna soon.
Torero decried transit authorization charges (of $200 (bout Frw100,000) to foreign trucks that ply Uganda, Kenya and Tanzanian roads, saying it is the reason why Rwandans prefer registering their trucks in those countries…to basically minimise costs.
On a positive note, Torero disclosed that RADDEX (Revenue Authorities Digital Data Exchange software that aims at having paperless border post) will be installed at Gatuna within this month; a pilot study on having one bond for transit trucks is on; regional revenue bodies are planning to rollout a cargo tracking system along both corridors…to solve the weighbridges problem once and for all ; and that RRA working on proposal to sign to a bilateral agreement for a one-border post with Uganda.
He challenged the private sector to take lead role in solving some NTBs and also sensitise importers and exporters on trade issues.
“We should for instance see private sector initiating investments in railway transport…which will be a solution to most NTBs along both corridors; developing plots that has been allocated for Rwandan cargo at Ishaka in Tanzania and Mombassa in Kenya”, he said, adding: “You need to need to focus on quick wins you feel government of Rwanda can readily solve”.
In response, Hategeka said the federation has requested government for both plots in Tanzania and Kenya so that the private sector may develop them.
He urged government to harmonise closing/opening times of the borders, lessen documentation and bureaucracies in solving NTBs.
“EAC member states should come stronger on the issue of corruption on the road because it has now become rampant,” he emphasized.
Kalisa hit at Rwanda Bureau of Standards (RBS) for charging a fee for testing standards on imports for which they (RBS) lack testing equipment.
“In fact RBS at the airport could not even substantiate why they charge standards fee,” he said.
Government requires that no fuel imports can be cleared at any border posts for purposes of proper control. All fuel trucks pass through Gatsata for clearance…a thing that causes congestion and delays there.
“With private sector’s “push” I am sure the government can be flexible in this area because clearing fuel at the border or anywhere else a part from Gatsata will greatly reduce on delays and the multiplier effects of getting fuel on the market faster are immense,” Mr. Torero advised.
The RRA official is bitter with unprofessional clearing agents. Hategeka proposed joint certification (with RRA) credible and professional clearing agents to ensure quality services.
“We can also consider designing a code of conduct for Clearing Agents,” he suggested.
Gerald Sina, the proprietor of Nyirangarama—a renowned investor in soft drinks and confectionery called on government to ensure flexibility in municipal laws and regulations on security to enhance business growth.
He cited that trucks are restricted to move beyond certain hours at night, shops in the city restricted to open at night hours…wondering how then government expects business to boom with such rigidities!