Efforts to eliminate non-tariff barriers have saved transporters and logistics stakeholders along the Mombasa-Kigali route nearly $7 million (about Rwf5 billion) since 2011.
The estimates are drawn from a recently conducted evaluation by Trade Mark East Africa of the impact of non-tariff barriers (NTB) to trade programmes in East Africa.
The survey’s findings indicate that removal of key NTBs have contributed to a 14 per cent reduction in time taken to import goods from each East African country and further contributed to a 20 per cent reduction in time taken to export goods from each EAC country from 33 days to 26 days.
Rwanda’s trade has been among the top beneficiaries from the efforts to remove the barriers hindering trade in the region.
The survey found that transit time as well as cost has significantly gone down consequently reducing the cost of business.
“NTBs reduction has contributed to the reduction in cost of transporting a 40 foot container from Mombasa to Kigali, from $6,500 in 2011 to $4,800. Evaluators estimate this generated a saving (at constant volumes) of about $7 million (about Rwf5.4 billion) on the Mombasa-Kigali route alone. Similarly, inland transportation times from Dar es Salaam to Kigali have dropped considerably, now to 3.5 days,” the report reads in part.
The development is largely credited to an EAC programme on elimination of identified NTBs supported by Trade Mark East Africa. The programme has so far identified 112 barriers and resolved 87 of them.
The survey also established that a significant result of the NTBs programme has been the enactment of the EAC Elimination of NTB Act.
The Act gives effect to the second clause under Article 13 of the Customs Union, by establishing a legal mechanism for identifying and monitoring the removal of NTBs.
The investments and efforts to address the underlying issue of NTBs was to address a serious challenge to trade within the region with the estimated losses resulting from the barriers being $ 490 million as of 2010.
These losses compelled efforts by multiple stakeholders to reduce the costs of trade in EAC and increasing efficiency of EAC corridors.
Top officials from TradeMark East African, which has led multiple efforts to remove the barriers, have welcomed the progress terming it as a significant milestone in the growth of the region.
“Non-tariff barriers remain an obstacle in growing prosperity in the EAC region. TMEA invested around $7.89 million in the NTBs project and total programme benefits are expected to be in the range of $35-45 million at constant trade volumes,” Frank Matsaert, the chief executive of TradeMark East Africa said.
“A reduction of NTBs will invariably lead to more trade in the region, which is ultimately our goal, of growing prosperity through trade.”
This comes at a time when elimination of NTBs remains a challenge not only to regional trade and integration but also a subject that partner states grapple with in the process of growing trade within the EAC bloc.