BRIBES DEMANDED BY REGULATORY AUTHORITIES CONTRIBUTE TO INCREASED COST OF DOING BUSINESS ALONG EAST AFRICA TRADE CORRIDORS

Nairobi – 19th November, 2012
A survey by Transparency International Kenya and TradeMark Africa (TMA) reveals that regulatory authorities in East Africa demand the highest amount of bribes from transporters and drivers along the transport corridors.

According to the report titled Bribery as a non-tariff barrier to trade; a case study of East African trade corridors, Tanzania’s regulatory authorities ranked worst at USD 12, 640 (Kshs. 1,074,400) followed by Kenya at USD6, 715 (Kshs. 570,775), Uganda was third at USD3, 672 (Kshs.312, 120) while Rwanda ranked fourth at USD 679 (Kshs. 57,715) and Burundi had the lowest at USD293 (Kshs. 24,905).

The survey conducted in collaboration with Transparency International chapters in Burundi, Rwanda, Uganda and the Transparency forum in Tanzania further indicates that bribery costs in Tanzania per year consisted of about 18.6% of the value of goods transported.

Speaking during the launch, Mr. Richard Sindiga the Director of Economic Affairs in the EAC Ministry, said: “By reducing or eliminating tariffs and working to minimize non-tariff barriers across the EAC, the governments in partner states can ease the flow of people and goods across borders. This will create larger markets, enable economies of scale, and promote local, regional, and global trade, which, in turn, will foster a dynamic environment for economic growth across the entire region from which Kenyan and East African businesses will benefit. However, the problem of non-tariff barriers in the EAC is widespread and requires joint effort to eliminate them.”

Mr. Sindiga said that the Kenyan Government is doing everything possible to eliminate the barriers but also concedes that the war is far from being won. He said the ministry is finalizing a survey to find out, why NTBs persist even after the council of ministers had directed partner states to eliminate them and also get the opinion of the stakeholders on what could be done to eliminate the persisting NTBs.

Transparency International Kenya Executive Director, Samuel Kimeu commented on bribes as a non-tariff barrier to doing business in the region. “Corruption serves as an unnecessary cost of doing business and as an additional burden to the consumer. Left unchecked, the vice will make this region uncompetitive.” He also noted that the full benefits of integration will not be achieved unless decisive efforts are put in place to confront corruption in the trade and transport sectors.

TradeMark Africa which funded this study was represented by Lisa Karanja, Director of Private Sector and Civil Society. “Regional integration is gaining pace but existence of non-tariff barriers continues to be a deterrent in the full implementation of the various protocols. TradeMark Africa (TMA) commissioned this study with a view to enhance the advocacy for the elimination of non-tariff barriers. We expect a comprehensive dialogue between state and non-state actors to address the key issue highlighted by this report. A resolution of the identified issue will lead to a more competitive business environment which will result in increased trade and ultimately prosperity for East Africans”.

About Transparency International

Transparency International is a non-governmental organization dedicated to increasing government accountability and curbing both international and national corruption. The TI movement has multiple concerns:

Humanitarian, as corruption undermines and distorts development and leads to increasing levels of human rights abuse; democratic, as corruption undermines democracies and in particular the achievements of many developing countries and countries in transition;
Ethical, as corruption undermines a society’s integrity; and
Practical, as corruption distorts the operations of markets and deprives ordinary people of the benefits which should flow from them.

To find out more please visit the TI-Kenya website at www.tikenya.org

Find out more about Trademark East Africa.

NOTES FOR EDITORS

To arrange for interviews please contact :
[su_row] [su_column size=”1/3″]
Nelson Karanja
Communications Manager
TradeMark Africa
Tel: +254 20 4235221
Mobile: +254 731 500 596
Email:nelson.karanja@trademarkea.com
URL: www.trademarkea.com
[/su_column][su_column size=”1/3″]
Dorah Nesoba
Transparency International
Programme Officer, Advocacy & Communications
Tel: +254 20 2730324/5
Mobile: +254 722 711 193
Email: dnesoba@tikenya.org
URL: www.tikenya.org[/su_column][su_column size=”1/3″] [/su_column][/su_row]

Source: TradeMark Africa (TMA)

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, UK, and USA. TradeMark Africa (TMA) works closely with East African Community (EAC) institutions, national governments, the private sector and civil society organisations.