Kigali: As a landlocked country, regional trade is an essential ingredient of Rwanda’s future economic success. Recognizing this, officials from the United States Agency for International Development (USAID) and TradeMark Africa ( TMA ) signed a $ 5.7 million Cooperative Agreement affirming their partnership under President Obama’s Trade Africa Initiative under the USAID Trade Infrastructure Program – which will work to improve the efficiency of regional trade in Rwanda.
The signing occurred at the U.S. Embassy and included Mr. Peter Malnak, USAID/Rwanda Mission Director and Mr. Mark Priestley, Senior Director Country Programs of TradeMark Africa.
Also present, was Mr. Pascal Ruganintwali, Deputy Commissioner General and Commissioner for Corporate Services of the Rwanda Revenue Authority – whose agency will benefit from investments that the new project will make in strengthening Rwanda’s customs procedures.
The program is a three-year, $ 5.7 million activity that will seek to reduce the time it takes for goods to cross and clear Rwandan borders, reduce technical barriers to trade, and enhance Rwanda’s ability to export and import goods through increased regional integration.
The partnership will also support East African Community (EAC) regional trade integration. Through Trade Africa, TradeMark Africa (TMA) will broaden its regional integration program at the Ports of Mombasa and Dar-es- Salaam and key border posts along the Northern and Central Corridors, and will work with EAC Member States to remove barriers to trade.
“Time really is money, and with the reduction in delays, trucking companies can complete more trips, traders can depend on moving goods more efficiently, exports can compete on global markets, and consumers will benefit from more and cheaper goods,” said Mr. Malnak.
TradeMark Africa Senior Director Country Programs, Mark Priestley, noted that a 10 percent increase in East Africa’s export volumes can be achieved by improving East Africa’s trade competitiveness through three mutually enforcing objectives: increased physical access to markets, enhanced trade environment, and improved business competitiveness.
“The U.S. Government is an important partner in promoting regional and economic integration in East Africa. TradeMark Africa will continue to focus its efforts on increasing trade and prosperity in the region, primarily through investing where there will be the biggest impact for East Africa’s people and the private sector. Facilitating regional trade is an effective means to alleviate poverty. This investment in supporting these projects is the catalyst needed to bring prosperity to the region,” said Priestley.
Improving trade facilitation is central to USAID’s economic growth strategy in Rwanda, as well as a priority of the Obama Administration under the Trade Africa initiative – which is focusing first on East Africa – and was launched in June 2013 during President Obama’s trip to the continent.
Trade Africa, and the programs that support it, see more efficient and effective trade as vital to improving economic and food security, sustaining investment, expanding employment, and increasing income generation in Rwanda and throughout East Africa.
Reducing the barriers to cross-border trade can result in: 10 percent increase in total value of exports from EAC region; 25 percent increase in intra-regional exports when compared to total exports in the region; 15 percent reduction in average time to import or export a container from Mombasa or Dar-es-Salaam to Burundi and Rwanda; and, 30 percent decrease in the average time a truck takes to cross selected borders.
And positive change is already in motion.
Since the East African Single Customs Territory was rolled out at the Port of Mombasa in January 2014, clearance time for cargo destined to Kigali has declined from 21 days to 6 days.
The cost of clearing a container has declined from close to $5,000 to $3,387. The USAID Trade Infrastructure Program will build on successes like these and will harmonize its work with that being done by the East African Community and the Government of Rwanda.
With these initiatives working together even further reductions in transport time and shipping costs across the region can be expected.
“We are heartened by the progress that has already been made, and will continue to assist the Government of Rwanda and the private sector to take advantage of the economic opportunities regional integration represents,” said Mr. Malnak.
TradeMark Africa (TMA) is an aid-for-trade organisation that was established with the aim of growing prosperity in East Africa through increased trade. TradeMark Africa (TMA) operates on a not-for-profit basis and is funded by the development agencies of the following countries: Belgium, Canada, Denmark, Finland, the Netherlands, Sweden, UK, and USA. TradeMark Africa (TMA) works closely with East African Community (EAC) institutions, national governments, the private sector and civil society organisations.
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.