The cost of doing business within the East African Community, and Rwanda in particular, could further be reduced, thanks to the establishment of the East African Freights and Logistics Platform.
The platform seeks to promote dialogue on national and regional logistics with the aim of enhancing competitiveness by reducing the cost of logistics, John Bosco Rusagara, the Chairman Rwanda Shippers’ Council, told Business Times.
It is also expected to contribute towards improving the quality of logistics services through a multi-sectoral collaboration of key logistics players, including government agencies as well as the Private Sector, Rusagara said.
He was speaking during the Rwanda logistics stake holders’ forum organised by the Private sector Federation (PSF) in Kigali, last week.
Government last year announced that it was going to construct logistics hubs at the Mombasa and Dar es Salaam ports and a dry service port (Kigali logistics hub) in Kigali, besides upgrading the air cargo facility at the Kigali International Airport.
The government has also been discussing with investors from Singapore to establish a logistics fund to finance local businesses in the sector.
All these efforts seem to have received a timely shot, as stake holders begin discussing the creation of a regional freights logistics platform that will help lobby for the national logistics platform at a regional level.
According to Hannington Namara, the Rwanda country manager Trademark East Africa, the objective is to try and improve Rwanda’s business competitiveness through efficient freight logistics services and facilitate the ease of doing business in the region.
It will also play a key role in the elimination of trade barriers thus resulting into a reduction in the cost of trade.
This will result into efficiency in customs and border clearance procedures, improved quality of trade and transport infrastructure across the region and Rwanda in particular, Namara noted.
The cost of shipping a container from sea ports to Kigali is still high at $4,200 and $5,000 in Dar es Salaam and equally $2000 and $5000 on the northern corridor.
This has mainly been due to lack of a coordinated approach towards addressing non-tariff barriers (NTBs) which has affected the region’s competitiveness.
However, with the platform in place Dr. Peter Kiriri TMEA’s Strategic Management and Monitoring and Evaluation Expert, believes trade among partner states will greatly improve thus increasing the region’s competitiveness.
“By putting in place competent and quality logistics services, it opens more trade opportunities for Rwanda and partner states. The ability to track and trace consignments and frequency with which shipments reach the destination within scheduled or expected delivery times, is key to trade and economic development in the region,” Kiriri told shippers.
Dieudonne Dukundane, TMEA’s logistics director, said the overall objective is ascertaining the logistics performance of EAC Partner states and drive the sector towards efficiency and transparency.
Dukundane said that the other objective is to promote fair trade and transparency in customs procedures,.
Priority issues waiting the platform
According to Dukundane, this particular platform will have to deal with the inefficiencies along trade and transit freight forwarders corridors, delays in the movement of goods, challenges in implementation of national and regional laws, and harmonisation of documentation requirements by customs in the central and northern corridors
Other challenges are security of goods and personnel in the corridors, congestion at the ports and border points, customs procedures and delays at transit points and ports.
And for the platform to effectively have any economic impact on trade, Fred Seka, chairman, Rwanda Freight Forwarders Association, noted that more focus will have to be on intensive advocacy especially on customs delays, unfair container deposit fees, corruption and extortion along the transit routes and inconsistent freight rates.
Currently different stakeholders pursue their own agenda with no concerted effort to address the issues and challenges faced by shippers and clearing agents, Dr, Peter Kiriri, a senior trade consultant Trademark East Africa said.
“In Rwanda and East Africa the logistic services are fragmented and lack a unifying platform from which they can share best practices, develop a coherent and unified advocacy agenda while exploiting the country’s and region’s collective bargaining strength,” Kiriri told Business Times.
Theobald Byaraje, the president Rwanda, Transporters Association is equally confident the platform will foster best practices in the freight logistics industry thus reducing the cost of doing trade.
This will result into increased competitiveness and efficiency through shared responsibility, stake holder awareness, and participation.
Issues for stakeholders to address
The Rwanda Shipper’s Council, importers and clearing agents will now have no choice but to participate in the identification of the platform stakeholders and their roles and come up with the scope of dialogue.
But before that can happen Fiona Uwera, the PSF’s head of research and policy analysis says sector players will have to work around the clock in identifying the framework of platform engagements, the structure and organization/organs of the platform.
They will also have to come up with platform committees and working groups who will take a center in it’s management, she said.