Kampala – July 23, 2012
The Ugandan government meets officials from its key trading partner, Kenya, next month as part of a continuing campaign to knock down barriers to increased trade and sharpen the Uganda private sector’s competitive edge.The talks are part of a multi-pronged Ugandan government drive to fine-tune private enterprise as an engine of economic growth through a series of trade-related measures linked to regional and multilateral trade.
The two neighbours will focus principally on eliminating Non-Tariff Barriers (NTBs), also known as Non-Tariff Measures, which hinder the smooth flow of trade and weigh down on efforts to make economies more competitive and efficient.Both are committed to this under the East African Community protocols, which established the EAC Customs Union and bound member states to identify NTBs and establish ways of monitoring and eliminating them. NTBs are the bureaucratic and administrative red tape that snarls or complicates smooth trade.
The Ugandan government urges traders to use forms it has provided at key Customs and Clearings houses to report NTBs they face in doing business with EAC partners as well as with the COMESA and SADCC Regional Economic Groupings (REGs).
The Ugandan government, under the auspices of the private group Trademark South Africa, has set up an online reporting mechanism to help traders who operate beyond EAC frontiers to register complaints about NTBs in any part of the COMESA/EAC/SADCC (Tripartite) region.
Registering a complaint in this way channels it to Focal Point officers in the ministries of trade in all three REGs for action to remove the reported NTB. Eliminating NTBs at national and regional level depends on robust reporting of NTBs by traders.
The following note sets out other steps the Ugandan government is taking to enhance trade competitiveness and the free flow of commerce in and beyond its borders. It also answers Frequently Asked Questions ( FAQs ) about trade policy and regional integration
BRIEFING NOTE/ FAQs ON TRADE
TRADE PACTS IMPROVE DOING BUSINESS IN UGANDA BUT NTBs REMAIN
The Government approved the Uganda National Trade Policy (NTP) in 2007. Its main goal was to make the private sector competitive by improving the ease of doing of business in Uganda within regional and multilateral trade agreements.
The NTP and the East African Community (EAC) integration process recognize the private sector as an engine of growth. In this regard, the government has prioritized several steps, including putting in place an enabling environment with good trade-related policies such as the National Standards Policy, Industrial Policy, and SPS (??) policy, all of which promote competitiveness.
The National Development Plan (NDP) 2010/11-2014/15, developed in tandem with the National Trade Policy, prioritized putting in place various trade facilitation (TF) measures. These included
- Increased funding to the road and energy sector
- Modernizing the customs clearance procedures of the Uganda Revenue Authority (URA)
- Improving clearance procedures and systems for standards and testing of both imports and exports for the Uganda National Bureau of Standards (UNBS)
- Integrated border management programmes such as One Stop Border Posts (OSBPs), the electronic Single Window System (e-SWS) and piloting of the 24/7-hour operations at Katuna, Busia, and Malaba borders.
Q: What is the Importance of trade facilitation?
Trade facilitation addresses the logistics of moving goods through ports and borders or the more efficient movement of documentation associated with cross-border trade. It refers to all measures by governments to achieve a seamless flow of trade across borders.
This is broadened to include the environment in which trade transactions take place and the transparency and professionalism of trade facilitation agents such as:
The URA, Customs, Immigration, Internal Security and Police, the Uganda National Roads Authority, National Drug Authority, Ministry of Agriculture, clearing and forwarding agents, banking institutions and insurance companies among others.
It also covers the regulatory environments, as well as the harmonization of standards and conformance to national, regional and internal regulations.
The advantage of these measures is to reduce the cost doing business, increase investment, and scale up exchange of goods and services and spur economic growth, which is vital to promote socio‐economic cooperation and poverty alleviation.
Q: What are the obstacles that affect the smooth flow trade and hinder economic development?
These are Non-Tariff Barriers (NTBs), also called Non-Tariff Measures.
Globally, tariffs or customs duties have been declining as a result of bilateral, regional and multilateral, trade liberalization. The EAC has succeeded in abolishing intra-community tariffs and adopting a Common External Tariff (CET).
Despite this, traders are now facing a number of NTBs, both domestic and in EAC partner states. They undermine the government’s goal of making the private sector competitive by keeping the price of Ugandan products high.
Q: What are Non-Tariff Barriers (NTBs)?
NTB are government measures other than tariffs that restrict trade flows. Examples include:
- Quantitative import and export restriction.
- Restrictive import licensing.
- Variable/multiple levies across border districts.
- Obstruction to physical movement of goods through measures such as roadblocks and related corruption.
- Multiple and un-standardized weighbridges with related corruption practices.
- Cumbersome customs and administrative entry procedures
- Multiple standards and testing requirements
- Non-recognition of sanitary and phytosanitary (SPS) certificates
- Very restrictive rules of origin.
- Poor infrastructure – roads, for example.
- Multiple licensing requirements by local authorities by wholesalers who operate across the whole country
- Multiple levies on goods by local authorities.
- Difficulty in accessing market information
NTBs cost traders time and money and are eventually passed on to consumers in the form of higher, and uncompetitive, prices
Q: Who faces NTBs?
- Ugandan traders, such as those transporting goods from one market to another within Uganda, or from one market to another in the same district.
- The travelling wholesaler working across many districts within Uganda. NTBs met by these traders include multiple levies by local Councils, multiple roadblocks unduly stopping trucks carrying merchandise, undue delay of trucks at weighbridges and subsequent loses of perishable goods and poor roads networks.
- Ugandan exporters and importers in transit to export markets. An example of this are the 21 road blocks and six weighbridges Ugandan trucks face while passing through Kenya or Tanzania, as well as undue port charges and lengthy procedures for cancelling transit.
- Importers and exporters from other EAC partner states trading and transiting though Uganda.
Q: As a trader, should I comply with legitimate measures?
Yes, as a trader or transporter, you are obliged to comply with these various government measures. But these measures should not be too cumbersome or arbitrarily applied by government officials to disrupt trade, as often happens.
The Ugandan ministry of Trade and Cooperatives is therefore working with all government and private sector institutions involved in trade facilitation to harmonize standards and eliminate unnecessary procedures that mutate as NTBs.
Q: What are other government programmes to eliminate NTBs?
The government, with support from Trademark East Africa ( TMA ), has developed a national response mechanism to eliminate NTBs. The main objective of the strategy is to strengthen my Ministry to coordinate all the institutions in trade facilitation to remove the NTBs they impose. In the strategy, government has identified the following platforms to eliminate both domestic and regional NTBs:
Bilateral arrangements
The Ministry has realized that the most effective way of eliminating NTBs is the bilateral arrangement and therefore:
Uganda on 27th January 2012, signed a Memorandum of Understanding (MOU) with the Republic of Rwanda on elimination of NTBs. In this arrangement, the two governments through their Ministries of Trade have agreed on a reporting and removal mechanism of all NTBs faced by traders in each other’s territory. A committee headed the Permanent Secretaries in the same Ministries are responsible for coordinating various public and private sector institutions involved in trade facilitation to eliminate NTBs. A follow up meeting was held on 25th June 2012 to review the progress and a time bound work plan was adopted and will be reviewed by the two countries semi-annually.
My Ministry realizes that Uganda, within the EAC trades, majorly with Kenya for both imports and exports and has therefore planned another bilateral meeting with the republic of Kenya in Month of August 2012, aimed at developing a common strategy for eliminating NTBs that affect traders of both countries.
Regional arrangements
EAC Approach
The legal obligation and mandate to eliminate NTBs is embedded in Article 13 of the Protocol Establishing the EAC Customs Union. The Protocol obliges Uganda, Kenya Tanzania, Burundi and Rwanda to formulate a mechanism for identifying and monitoring the removal of NTBs.
The mechanism is complemented by National Monitoring Committees (NMC) in all partner States who receive NTB reports from affected traders and initiate the process of removing them. The Ugandan NMC is hosted and chaired by the Permanent Secretary, Ministry of Trade, Industry and Cooperatives and is co-chaired by the private sector representative – the Chairman of the Uganda Clearing Industry and Forwarding Association (UCIFA), Kassim Omar.
In this regard, harmonized reporting forms for NTBs were developed by the EAC for use by all traders in the region. The Ministry placed these at Customs and UCIFA Offices at the borders of Mutukula, Malaba, Busia and Katuna. Forms can also be got from the Ministry of Trade, Industry and Cooperatives. Truck drivers and other traders traversing the EAC region are encouraged to carry along with them the forms and record any NTB they face at a particular point/location within the EAC region. When filled, the forms are returned to the Ministry or Customs and UCIFA office.
Tripartite arrangements (COMESA/EAC/SADC) Approach
In the spirit of harmonizing activities within the three Regional Economic Groupings, an online reporting mechanism was developed under the auspices of Trademark South Africa. It enables traders who operate beyond the EAC region to report on-line NTBs faced by logging on to www.tradebarriers.org. The system enables registered users to immediately register a complaint in any part of the Tripartite region. When a trader lodges a compliant it is immediately sent to the administrator of the system, who then channels it to Focal Point officers in the Ministries of Trade in all the three REGs for action. The beauty of the system is that is enables both the Focal Point Officer to monitor complaints and the processes of removal of a reported NTB.
We urge you to report NTBs in the manner outlined above and to contact the following if you encounter further difficulties:
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Mr. Emmanuel Atwine
Commercial Officer
Ministry of Trade, Industry & Cooperatives
P. O. Box 7103, Kampala
Farmers’ House, 3rd Floor Room 320
Tel: 256 414 314 254
Mobile: 256 782 001 835
Email: eatwine@mtti.go.ug
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Mr. Kassim Omar
UCIFA (Chairman NMC)
Premier complex, Plot 1-3
Enterprise Close, Nakawa
Industrial Area
Tel: 256 414 376 007
Mobile: 256 772 670 370
Email: alliancefr@yahoo.com
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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.
