Rwanda’s clearing and forwarding agents have been advised to open up revolving accounts with shipping line authorities to facilitate the ease of doing business at East Africa’s sea ports.
This will serve as guarantee fund for clearing agents to secure containers without necessarily having to pay container deposit fees in cash, according to Valentine Rugwabiza, Rwanda’s minister in charge of East African Community (EAC) affairs.
This is one of the new measures government hopes will ease the difficulties faced by local clearing and forwarding agents at East Africa’s sea points of Dar es Salaam in Tanzania and Mombasa in Kenya.
The advice follows complaints from local agents about high container deposit charges by shippers at the two sea ports.
Rwandan clearing agents are required to deposit up to US $5000 (about Rwf3.5 million) in container deposits which, according to the businesscommunity, is eating into their profits.
However, Rugwabiza, called on the agents to establish a revolving account with the shipping lines saying this would help reduce on the costs they are currently incurring and promote transparency.
“The feedback we got from this challenge is that clearing agents had not yet established good relationship with the shipping lines to entrust them with their containers. However, the best solution is to open up a revolving account as their Kenyan counterparts have done,” Rugwabiza noted.
She was addressing members of the business community during a business breakfast meeting in Kigali, yesterday.
“It was clear to us that we needed to put in place a system that would enable us meet regularly and be able to help you leverage on the business opportunities within the Community. We are, therefore, encouraging you to keep informing us on some of the measures that you think have not been captured with regard to the ease of doing business in the region.”
Freedom of services is absolutely key to businesses and we must keep on emphasising it, Rugwabiza added.
The minister also noted that government, through Rwanda Revenue Authority, had sent a list of 86 clearing agents to the Kenyan authorities to have their clearing bonds activated.
This, she added, will help create a fair and competitive business ground for local private sector.
Minister Rugwabiza also said a government official will this week head to Dar es Salaam to try and engage authorities at the sea port on the issues raised by local traders, including the need to harmonise container deposit fees.
Josephine Nyebaza, vice chairperson, the Association of Rwanda Freight forwarders, said clearing and forwarding firms were incurring losses due to delays and inefficiencies in offloading containers at sea ports.
“Containers are delayed for almost 12 days at Dar es Salaam port, and three days at Mombasa, this leads to high costs in terms of doing business and, ultimately, affects the profitability of the business community,” he said.
Denis Karera, Vice chairman, East African Business Council, urged the business community to use the platform to advocate for fair trade.
“We must work as a team and strongly advocate for fair and profitable trade. We want to see (EAC) partner states reciprocating the kind of business environment we are according them for us to become more competitive.”
Benjamin Gasamagera, Chairman, Private Sector Federation, said the initiative would help strengthen cross-border trade. “A vibrant private sector is an essential element in the sustainability of the EAC integration.
However, for this to happen, we must work towards embracing free movement of labour and eliminate all Non-Trade Barriers,” he said.