Rwanda Revenue Authority (RRA) on Friday commissioned its Electronic Cargo Tracking System (eCTs) which will help reduce transit time, enhance cargo safety and help traders to better predict arrival of goods.
The eCTs is a web-based system used to monitor transit cargo from the point of entry to the exit in order to improve its safety and promote fair terms of trade by eliminating offloading of undeclared goods on the Rwandan market.
During the launch at RRA headquarters in Kigali, François Kanimba, the Minister for Trade, Industry and East African Community Affairs, recalled that the project was sanctioned by the heads of state of Rwanda, Uganda and Kenya to improve trade which accounts for a big share in the factors behind the East African Community (EAC) integration agenda.
Kanimba said: “The facility goes a long way to improving the turnaround time in international trade on the Northern Corridor. In Uganda, where the system is operational since 2014, it has proven to deliver impressive results in terms of transit time between Mombasa port and Kampala.”
“This is a very important tool for a landlocked country like Rwanda which suffers disadvantages of being far away from the port. Any reduction in the costs of moving cargo means improved margins for our traders and, of course, tax revenues.”
The minister assured the business community of the government’s willingness to continuously upgrade policy and physical infrastructure to facilitate competitive trade.
The establishment of the $4.5 million Electronic Cargo Tracking System was funded by the UK Department for International Development (DFID) through Trademark East Africa (TMEA).
It comes to add to efforts to reduce the cost of doing business in the region, through improved cargo predictability, and increased truck turn-around time which ultimately leads to lower transport costs.
Transport delays and cargo theft are among key concerns for importers and exporters and, with improved security of cargo, importers expect reduction in transit risks as well as insurance premiums.
Richard Tusabe, the RRA commissioner-general, among other things, assured stakeholders that they will get optimal use of the system.
He said: “It is one thing to have the system but it is another to make good use of it. And, on behalf of all stakeholders, I want to commit to ensure that we get optimal use of the system.”
According to Richard Kamajugo, the senior director for trade environment at TMEA, the management of transit cargo is a very important element of trade, especially for inland countries like Rwanda.
“The system will enhance security of the supply chain, especially the mineral sector, where there have been challenges beyond the borders of Rwanda,” Kamajugo said.
In Uganda, where the system is already in use since 2014, it reportedly helped traders cut the time required to transport cargo from entry border points (Kenya’s Malaba and Busia in Uganda) from six days to one day and a half, subsequently pushing down transport costs.
According to TMEA, transporters lose $200-$250 each day a truck spends while on transit while the cost of transport tends to increase for cargo destined further inland, such as Rwanda.
It is further reported that in Uganda, the system helped remove the need for physical escorts that previously increased transit period from one day to three to four days, effectively resulting into an estimated increase in transport costs of about $400 -$500.
The Private Sector Federation (PSF) chairperson, Benjamin Gasamagera, said the launch is a “significant milestone” in the quest for a more efficient logistics industry.
“Drivers will behave as they well know that they are being tracked in real time. Cargo insurance premiums will drastically reduce too.”
According to TMEA, in addition to improving cargo safety, the eCTs will eliminate some loopholes in regional customs laws that prescribe weak punishment for violation of customs procedures, partly blamed for smuggling.