Traders worried as NTBs on Central Corridor continue to bite

Nearly a month after Rwanda and Tanzania held bilateral talks on how to increase efficiency on the central corridor, members of the business community say little is being done by the Tanzanian authorities to improve the situation.
A truck from Tanzania crosses into the country at Rusumo border post. (File)
A truck from Tanzania crosses into the country at Rusumo border post. (File)

Nearly a month after Rwanda and Tanzania held bilateral talks on how to increase efficiency on the central corridor, members of the business community say little is being done by the Tanzanian authorities to improve the situation.

The reluctance to eliminate NTBs (non tariff barriers) has continued to cost traders millions of dollars and could soon reach billions if the situation is not treated with a great sense of urgency.

For example, importers still have to part with $4,200 and $5,000 to ship a container from Dar es Salaam to Kigali, a distance of only 1,497 kilometres.

This, businesspersons say, is too expensive and affects their competitiveness.

The traders were speaking during the third breakfast meeting between the private sector and Ministry of East African Community affairs, in Kigali, yesterday.

The traders say that up to now, regional customs transit guarantee issued by Rwanda is not activated in Tanzania Revenue Authority system which is a challenge to Rwandan clearing firms.

Also Rwanda freight forwarders are not registered on Tanzania TRANCIS limiting handling of EAC transit cargo.

John Bosco Rusagara, the chairperson of Rwanda Shippers Council, said this has restricted companies in the country to only handle internal-bound cargo.

Rwandan traders most often face discrimination, delays and their right to access to customs premises are often violated, Rusagara said.

This could affect Rwanda’s competitiveness given the fact that the Central Corridor handles more than 60 per cent of the country’s total trade.

“We are losing a lot of money through bribery, corruption, bureaucracy, discrimination, and a weak regulatory framework at sea port,” Rusagara said.

A new report on NTBs by the Ministry of Trade and Industry highlighted the problems of weighbridges and limited parking space at port of Dar es Salaam.

It also indicated issues of double payments (exit fees) charged to freight forwarders at both the port and inland container depots for same container.

Many Tanzanian weighbridge stations, including Vigwaza, Mikese, Kihonda/Morogoro, Dodoma/Nala, Singida/Njuki, Kahama/Mwenda Kulima and Nyakahura, still remain along the central corridor.

“The authorities in Tanzania are still weighing empty trucks causing unnecessary delays, thus affecting business,” traders said.

And most often when traders complain, the authorities say they will have to first commission a study before the problems are solved, Theadore Murenzi, the chairperson of the Rwanda Long Distance Truck Drivers Association, said.

“There is need to adopt a common approach between Rwanda and Tanzanian as the best mechanism that will help to resolve these issues. The same kind of approach has worked between Uganda and Rwanda,” Murenzi said.

Will Tz commit to initiatives?

The question, however, is whether Tanzania is ready to commit itself to such bilateral initiatives.

Amb. Valentine Rugwabiza, the minister for East African Community affairs, said initiatives to improve the situation along the central corridor are already in place.

“The Central Corridor is important for Rwanda’s trade. And we believe that any initiatives aimed at improving this Corridor will have a direct impact on transport costs, thus contributing to the reduction of the cost of doing business in Rwanda,” Rugwabiza said.

“Given its significance to Rwanda’s trade, it is timely that any outstanding barriers to trade are completely eliminated. It is also important that private sector is aware of the new developments, opportunities in order to take advantage of the new momentum,” she added.

The minister promised to have traders’ concerns addressed when the ministry officials meet with Tanzanian authorities next week.

During the first Central Corridor Presidential Roundtable and Investor Forum, held in Dar es Salaam, last month, it was agreed that a new standard gauge railway from Dar to Rwanda, Burundi, DR Congo and Uganda would be constructed.

It was also agreed that Dar port be expanded with the construction of new berth 13 and 14 so as to accommodate the growing trade.

Since August 2014 when Rwanda deployed its customs officials at Dar es Salaam port, transit time has been reduced from 10 to 6 days from Dar-es-Salaam to Kigali while weighbridges have been reduced from 8 to 7, according to Vincent Safari, the National coordinator for NTBs.

Road toll, which had been imposed on Rwandan trucks, has since been reduced from $500 to $152 per truck per trip, he added.

Police roadblocks have been also reduced to eight in 2014, from 53 roadblocks in 2010, Safari added.

These changes, business analysts say, will help save up to $800,000 per year for transporters.

Clever Mugabo, the vice chairperson of Private Sector Federation, said eliminating NTBs must be taken as a national issue.

“Reducing the cost of doing trade is in line with enhancing our competitiveness which will result into more employment opportunities and increased household incomes,” Mugabo said.

During the Heads of State meeting in Tanzania last month it was agreed that Tanzania removes the requirement of cash bonds for transportation of sugar to Rwanda and takes a lead in the harmonisation of axle load limit at 56 tonnes.

It was also agreed that movements of Cargo trucks between Isaka-Rusumo happens 24 hours and that trucks use electronic cargo tracking system to eliminate the unnecessary road blocks.

It is, however, yet to be seen how fast these recommendations are implemented.

editorial@newtimes.co.rw

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