Rwanda is in a difficult position because 95 percent of its main import-export route lies outside its direct policy jurisdiction.
Corruption along the two major transport routes of northern and central corridors has been identified as one of the key drivers of Rwanda’s high transport costs.
According to a report presented to the press on Thursday on Non-Tariff Barriers (NTBs), corruption along the northern corridor takes place at three levels namely, the police roadblock, the weighbridges and at the border gates.
The survey upon which the conclusions are based was carried out between July and November 2008, by Private Sector Federation (PSF).
The survey aimed at assessing the challenges importers and exporters in the region go through, while in the field was carried out along the northern and central corridor routes to the seaports of Mombasa and Dar-es Salaam.
“In all cases, an explicit bribe is never asked for-rather a small story is brought up to elicit the bribe. But for weighbridge you either pay it or get arrested and prosecuted,” says the report.
Surprisingly corruption is rampant in transit countries along the transport corridors with little or no corruption cases reported in the country.
“The moment truck drivers enter into Rwanda that is the end of corruption! They are stopped but whoever stops them does not ask for a bribe. They ask for other things like documents since we do not have weighbridges,” Emmanuel Hategeka, the Chief Executive Officer of PSF told journalists on Friday during a press briefing.
“In some countries like Kenya corruption is institutionalised,” he said.
He however added that though the study did not reveal any manifestations of corruption on the Rwanda side, this does not necessarily mean there are completely no cases of corruption.
The report indicates that total petty bribery along the northern corridor equalled $193 on the Ugandan side and $703 on Kenyan side totalling to $897. On the export route alone this accounts for about 21 percent of the total shipping cost.
The cost is even higher on import route accounting for approximately $1,200.
Though the northern and central corridor account for 3/4 (three quarters) of Rwanda’s imports and exports, only 5 percent of the segment is in the country and 95 percent in Uganda, Kenya, Tanzania respectively.
“While lowering transport costs is imperative for a growth strategy based on exports, Rwanda is in a difficult position because 95 percent of its main import-export route lies outside of its direct policy jurisdiction,” Hategeka said.
The pioneer report on NTBs also highlights poor and impassable roads, congestion at both seaports and unnecessary delays at border posts and weighbridges as posing challenges to doing business in the region.
For instance, the report indicates that along the Northern Corridor, over 57 percent of the journey is spent stopping compared to 43 per cent of the driving time.
While so many NTBs along the transport corridors are key drivers of high transport costs, the report also underlines procedural barriers including acquisition of a series of documents. Notably getting all the seven documents before the beginning of the journey takes time between 2 to 3 days.
According to shipping companies interviewed in the report, daily parking fees for the trucks and waiting for the documents costs money losing approximately $400 per day.
The report notes, “The biggest problem in the case of Rwandese registered trucks right now is that they are not allowed to load goods from Kenya unless they get a clearance, signed and stamped by the Commissioner Customs.”