PUBLISHED ON November 19th, 2014

EA keen to break border bottlenecks to boost inter-regional trade

EAST Africa is making significant progress in their economic integration agenda with a focus on trade and transport facilitation to improve its competitiveness.

Heavy investments in road and railway infrastructure as well as modernization of port services are helping to boost intra-regional trade, the springboards for growth and prosperity in the region.

However, a major undoing for the five partner states of the East African Community (EAC) – Tanzania, Kenya, Uganda, Rwanda and Burundi – is the high costs of cross-border trade.

Costs of trading to most of African countries are stubbornly high making it difficult for potential African exporters to compete in global and even in regional markets.

Costs related to trading in the region are among the highest globally and are 50 per cent higher than in the United States and Europe, according to the World Bank. This is the result of gaps in infrastructure, lengthy border delays, red tape, poor regulation and lack of interconnectivity among systems used by the various government departments.

It is even worse for landlocked countries of Burundi, Rwanda and Uganda with transport costs rising to 75 per cent of the value of exported goods.

According to the 1999 World Bank Paper Infrastructure, Geographical Disadvantage and Transport costs, if East Africa reduced its transport costs by 10 per cent, trade could increase by more than 20 per cent.

It is against this backdrop that the Burundian President, Pierre Nkurunziza urged for improved efficiency by customs and immigration officials at border posts to reduce cumbersome procedures which contribute to unnecessary delays in transit cargo clearance.

President Nkuruzinza made the call last Friday when he laid a foundation stone for construction of One Stop Border Point facilities at Kobero border point on the border with Tanzania located at Muyinga Province, in northern Burundi. The facilities are constructed under financial and technical support of TradeMark Africa (TMA) to the tune of $6.4 million.

They aimed at reducing time spent for cargo and passenger clearance at the border posts of Kobero and Kabanga on the Tanzania’s side by combining activities of border control organizations and agencies of the two countries at one point.

TMA is also constructing similar facilities at Kabanga border post and according to officials the two facilities are expected to cut down transit costs across Tanzania and Burundi border by 30 per cent.

“As the Anglophone say ‘time is money,’ the concept of one stop border post comes to solve the big problem: delays in controls at the border,” President Nkuruzinza put it correctly.

The Kobero border post is a gateway for transit cargo for Burundi and Eastern Democratic Republic of Congo from Tanzania. It handles more that 70 per cent of all cargo transport by road to Burundi.

According to the TMA Director of One Stop Border Posts, Sjoerd Visser, about 60 trucks cross the Kobero and Kabanga border posts every day.

“Trading our way out of poverty,” is a phrase used by Ugandan President Yoweri Museveni to emphasize the importance of intra-regional trade in East Africa and he could never be more correct.

The focus on trade and transport facilitation has come at an opportune time to focus on areas that have received less attention before and ended up compounding problems that hamper trade growth and constrain economic growth potential.

It is a fact that trade has long been crucial to economic growth and prosperity. This has been the case around the world, and it is just as relevant to East Africa.

Source: All Africa

Disclaimer: The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of TradeMark Africa.