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The East African : Nov 17th 2014
SPECIAL ADVERTISING FEATURE The EastAfrican EAST AFRICAN VOICES ≥esolved as soon as they a≥ise there has been a reduction. “This forum is considered an avenue for eliminating NTBs, especially those that have been outstanding for a long time,” Mr Safari said. “At least 72 cases related to NTBs have been resolved while 22 NTBs are still unresolved due to lack of political will by some partner states but dialogue is still going on to resolve or eliminate all of them,” he added. Jacqueline Maleko, direc- tor general of Tanzania Trade Development Agency said the performance of Tanzania’s logistics systems and trade facilitation generally not only impacts on the competitiveness of Tanzania, but also that of neighbouring countries dependent on it. However, despite reduced Trucks queue at the Mariakani weighbridge outside Mombasa. Such delays add to the cost of doing business. NTBs in transit, operations at border crossings leave much to be desired as there are some reports of unco-ordinated inspection and levy charges by various agencies. According Ms Maleko, up to 10 agencies operate on one side of the border; private sector institutions and operators that include Customs brokers, importers and exporters, transport operators, Tanzania Revenue Authority, Tanzania Bureau of Standards, Immigration, Tanzania Food and Drug Authority, ministries and local government officials. “It is indeed very bureaucratic, the result of which is prolonged delays and additional costs,” she said. Ms Maleko however said Tanzania is pioneering op- erationalisation of Joint Border Committees (JBCs) whose establishment was resolved by the East African Council of Ministers to help address this challenge. “JBCs have laid the ground for collaboration among all institutions at the border in addressing operational challenges and reducing NTBs,” she said. TRA currently accommo- dates EAC member country’s Customs officers to inspect goods at the Dar es Salaam port, have the declaration lodged and taxes paid in the destination country and hence goods released once the customs officer of the destination country confirms payment. “This means reduced check points as there are no further risks, and hence faster movement of goods,” said Richard Kayombo, TRA director of Taxpayer Service and Education. This has reduced the time trucks travel from Dar to the border with Burundi and Rwanda from 12 days to 3.” But Rwandan traders still claim that they are losing millions of francs at border crossing. Until recently, Rwandan bus operators were being charged $50 every time they entered Uganda. However, regional reforms to allow seamless flow of transit goods and speed up clearance time have not yet translated into a significant reduction in cargo transportation costs. According to Rwanda’s Min- ister for Trade and Industry Francois Kanimba, the recently concluded Northern Corridor Summit in Kampala agreed that Kenya, South Sudan and Uganda are to commission a study on the impact of the reforms meant to ease doing of business in the four countries. The planned study comes at a time importers in Kigali claim they still pay between $5,300 and $5,500 to transport a 40ft container from the port of Mombasa to Kigali. And if they are to use the shorter Dar es Salaam port in Tanzania-Kigali route, they are charged about $4,000 for 40ft container, the same transport amount they were paying before the Single Customs Territory and Northern Corridor Integration projects came into force. Mr Kanimba said, “The study will inform Kenya, Uganda and Rwanda about the impact of the reforms and what needs to be done to bring down the cost of doing business further.” “I do not know the real prob- lem responsible for the high transport costs until scientific study is carried out,” he said. As a result of high cost of transportation, prices of goods and services in Kigali have remained high. When importers are asked to explain the high prices they say: “We are forced to factor in transportation costs which are passed on to the final consumer. Rwanda Revenue Authority Commissioner-General Richard Tusabe said it takes five days for a truck from Mombasa to deliver goods in Kigali compared with 21 days in the old system. “The cargo delivery time has been improved because multiple weighbridges and check points have been removed along the corridor to facilitate seamless flow of cargo to the destinations,” said Mr Tusabe. But Sharat Sachdeva, a com- mercial and marketing manager for the Kenya-based Freight Forwarders, said despite reforms like clients charter signed by the Mombasa ports authorities, they still experience longer waiting times at Customs due to the slow IT system. WORD ON POLICY Andrew Luzze, executive director, EABusiness Council The issue of NTBs will always be there because in trading arrangements, there will always be disagreements and disputes and new NTBs will always emerge. He however says these should be resolved as fast as they surface. 5 Vimal Shah, chairman, Kenya Private Sector Alliance Unending NTBs are to blame for the shifts in regional trade. Countries like Tanzania have become very harsh about what is sold within their borders, to the extent that they reject even the packaging of some goods that were earlier allowed into the market but which they now say are substandard. Richard Tusabe, RVA, commissioner general It takes five days for a truck from Mombasa to deliver goods in Kigali compared with 21 days in the old system. The cargo delivery time has been improved because multiple weighbridges and check points have been removed along the corridor to facilitate seamless flow of cargo to the destination. imp≥ovements unde≥ Single Customs Te≥≥ito≥y include use of pre-arrival declaration forms, reduction of multiple Customs declaration requirements by around 90 per cent, single declarations for bulk purchases such as fuel products and cement, payment of certain fees at country of destination and introduction of a single regional bond that offers high cost savings to importers compared to multiple guarantee bonds. “Huge growth in import 5 days THE TIME IT TAKES TO CLEAR GOODS FROM MOMBASA TO KIGALI FROM 21 BEFORE SCT volumes tied to the Single Customs Territory has boosted tax revenues bit indirect losses attributed to this regime can be mitigated through strong export numbers in some sectors. “Fuel consignments currently take a shorter time because many trucks are consolidated into a single batch instead of clearing them separately. This has directly reduced on occasional fuel shortages experienced in the past. But higher growth in the manufacturing sector might compensate for lost domestic taxes over the long term,” noted Moses Sabiiti, Programme Manager at TradeMark East Africa. TradeMark has invested $5 million in con- struction of one stop border posts in Uganda and deployment of new food certification systems at the country’s standards bureau, among others to improve the movement of goods to and from the port of Mombasa and onward to Rwanda and the Democratic Republic of the Congo. “This customs arrangement offers local busi- nesses huge benefits in moving goods and raw materials across borders at a lower cost which leads to higher rates of competitiveness. But some of these cost savings have been eroded by huge depreciation in the value of the shilling against the US dollar and this has constrained local businesses from passing on new cost benefits realised in the customs value chain,” observed Richard Kamajugo, URA’s Commissioner for Customs. Bernard Busuulwa Francois Kanimba, Rwanda Minister for Trade The recently concluded Northern Corridor Summit in Kampala agreed that Kenya, South Sudan and Uganda are to commission a study on the impact of the reforms meant to ease doing of business in the four countries.
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