PUBLISHED ON October 8th, 2014

Why NTB’s are still a big problem to regional trade

Traders are losing millions of francs through non-tarrif barriers (NTBs) along the Northern and Central corridors, a new survey has revealed.

According to a survey by the National Monitoring Committee on NTBs and East African Community, some partner states have not done much to eliminate NTBs, which is hurting business growth.

“The slow pace at which some of the member states are removing non-tariff barriers has resulted into a profound effect with 39 per cent of imports and exports paying a heavy price,” the study, “The Current Status of NTBs in East Africa” that was released last week in Kigali shows.

In fact, according to the report, 24 per cent of manufactured goods are being affected by NTBs, 7 per cent rice, 7 per cent tea, and 5 per cent beverages.

Also, 3 per cent of dairy products and sugar are affected, as well as 1 per cent of beef and 3 per cent of agricultural processed products.

Over all, Tanzania still has the highest number of NTBs at 26 per cent), followed by Kenya with 24 per cent, Uganda 22 per cent and Rwanda with 14 per cent, the report indicates.

According to Vincent Safari, the national co-ordinator in charge of NTBs at the Ministry of Trade and Industry, up to 72 per cent of NTBs have been resolved, while work is ongoing to remove 22 per cent of the barriers to trade.

However, traders have recently reported up to 8 per cent NTBs to have been introduced by member states in the near past, hindering regional trade.

There are complaints about Uganda restricting beef and beef products from Kenya. There are also about 30 Police road blocks along the Central Corridor, Dar es Salaam to Rusumo border. Also, Rwanda and Uganda are still reluctant to treat rice imports from Tanzania through Rusumo and Mutukula borders in a preferential manner.

“There are also unjustified and improper application of non-tariff measures such as sanitary and phytosanitary measures and other technical barriers to trade. “However, we are taking the lead in ensuring that these barriers are eliminated to facilitate trade,” Safari told the business community during a meeting to update stakeholders on the EAC integration process and new developments.

Delays, theft at Dar es Salaam, Mombasa ports:

According to some traders, the theft of containers, especially of minerals and fertilisers, is increasing at the port of Dar es Salaam.

The port is also not open 24 hours contrary to what is claimed by authorities in Tanzania, traders added.

“Most of the theft takes place inside the port before containers are loaded. So, it is important that measures are put in place to ensure containers are sealed to minimise some of these risks. There is also need to increase surveillance cameras at the port,” Grace Mulinda, a clearing agent said.

She added that sometimes they wait for long hours before accessing containers, noting that there are also delays in reimbursing container deposit fees which is increasing the cost of trade.

On average, a trader pays $4,000 for a 40-feet container as container deposit.

Port congestion is also forcing truck drivers to park along the road resulting into payment of penalties to the city council, said Abudul Ndaru, the managing director, TransAfrica Container Transport. Ndaru is also the vice-chairman of the Long Distance Drivers Association.

National park charges:

“Rwandan trucks are being charged $300 for passing through the national parks of Tanzania while our Tanzanian counterparts only pay $50. This fee should be harmonised to facilitate easy movement of goods and lower the cost of doing business along the Central Corridor,” Ndaru appealed.

According to the EAC time-bound programme on NTBs, lack of co-ordination among regional institutions involved in harmonisation of standards and existence of several weighbridges along Northern (eight) and Central (seven) corridors are still hindering cross-border trade.

The business community is now calling on the National Monitoring Committee to be assertive in its advocacy at national and regional level, and to ensure all NTBs are removed.

“It also needs more commitment from the private sector to influence policy,” business analysts noted.

Efforts to address NTBs on going:

According Valentine Rugwabiza, the East African Community Affairs Minister, the regional common market protocol is not yet a reality.

“There still a number of trade barriers hindering free movement of labour and capital across the region. “Rwanda will continue playing its role and ensure all trade barriers are eliminated to create an enabling environment that will make the private sector more competitive,” Rugwabiza said.

Rugwabiza revealed that the single customs territory along the Central Corridor will be implemented next month.

“This will help leverage business opportunities for local entrepreneurs,” she noted.

“Rwanda has signed agreements with governments of Uganda and Tanzania on harmonisation of procedures and elimination of trade barriers. We have put in place joint technical committees and joint border committees to help in the identification and elimination of trade barriers,” Safari told the Business Times.

“We have also put in place strong communication tools, including a website and an SMS feedback (2525) so people can report any barriers to doing business across the region.”

According to Hannington Namara, the TradeMark Africa country manager, the introduction of electronic single window system has reduced the cost of doing trade in real time.

“Embracing a single location to remove unnecessary obstacles which hinder legitimate trade, use of non-intrusive cargo scanners to reduce time for physical verification of goods and working for more hours will greatly enhance regional trade.”

Eliminated NTBs:

Road toll in Tanzania has reduced from $500 to $152 per truck per trip resulting into a saving of up $800,000 per year for transporters using the central corridor.

Weighbridges in Kenya have been reduced from six to four, and in Tanzania from eight to seven, while Police roadblocks have been removed in Kenya and Uganda and reduced in Tanzania, the report indicates.

The state of road and ports infrastructure has significantly improved and Tanzania removed the requirement of cash bonds for transportation of sugar to Rwanda.

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.