[EDITORIAL] Strengthen regional integration policies to further spur cross-border trade

The East African Community has, over the past decade, been undergoing an integration process to open up opportunities for its over 146 million citizens by creating a larger market for business players in the region.

The East African Community has, over the past decade, been undergoing an integration process to open up opportunities for its over 146 million citizens by creating a larger market for business players in the region.

The initiative also seeks to reduce the cost of trade and improving intra-regional trade that is still low compared to other trading blocs across the world.

 

These efforts have already started to bear fruit with a recent World Bank report, “Connecting to Compete 2016: Trade Logistics in the Global Economy” showing that the bloc had registered improvement in the movement of goods across borders.

 

The survey ranked trade logistics performance of 160 countries globally. Interestingly, administrative as well as trade and transport reforms in the EAC region have had the greatest impact on logistics compared to infrastructure investments. This has translated into faster transit times and shorter dwell times, according to the report.

 

It indicates that the average dwell time at Mombasa port reduced from 13 days in 2006 to about three days, while the Malaba border crossing point between Kenya and Uganda registered a decrease in border clearance times from 24 hours to six hours.

The average time taken to move cargo from Mombasa to Kampala dropped to three days from 18 days, while Mombasa to Kigali now takes about six days compared to 21 days previously. All these developments have helped reduce the cost of doing business by 50 per cent.

So, it is crucial that while regional governments promote hard infrastructure development, the contribution of soft infrastructure like administrative reforms toward improved business environment should not be underestimated.

Any reductions in cost go a long way in supporting small-and-medium businesses, while improved logistics reduce business related inconveniences.

Policy-makers should pay attention to the “low-hanging” fruits achievable through trade facilitation and administrative reforms as they improve infrastructure, like the ongoing standard gauge railway line and effort to open regional skies.

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