Tanzania has most trade barriers in EAC- report

Tanzania employs the highest form of bureaucratic bottlenecks to the movement of goods and services in the East African Community, a new report shows.

Kenya, Uganda and Burundi follow in that order in imposing administrative and technical requirements that act as obstacles to trade, reveals The State of East Africa 2012 report.

But Rwanda has no complaint reported against it from the region in a survey that says integration of EAC has deepened although the challenges facing the bloc are increasing.

These impediments to trade technically referred to as non-tariff barriers; seek to meet an agreed regulatory objective as food or product safety, safeguard national security and avoid revenue loss.

And “while there may be consensus that existing barriers should be abolished, this does not mean that there is agreement on how to meet legitimate regulatory objectives in a less trade-restrictive manner,” the report says.

The effect of these barriers is delay in clearing imports and varied application of tariff duties, added costs for transit including custom bonds, delay in transport and bribes and loss of business time.

In Tanzania, for instance, on average a truck driver is stopped twice by traffic police, three times at weighbridges, once at a traffic police checkpoint and four times at the Tanzania Revenue Authority in a single trip.

“In 55 per cent of the cases where truck drivers were stopped by traffic officers a non-official payment was made,” notes the report to be officially launched by EAC Secretary General Richard Sezibera Wednesday.

Following such barriers, Uganda, Rwanda, Burundi, Tanzania and Kenya, in that order, have been most affected, although the EAC states are currently establishing computerised systems.

This, the report prepared by Society for International Development (SID), says will ensure efficiency and root out corruption that remains rampant in the several partner states.

But the overarching message of the report is that since it was rekindled more than a decade ago, the EAC integration process has deepened.

“It is certainly deepening in terms of the expanding scope of the laws, policies and regulations that are giving effect to the decisions about and on-going commitment to closer economic and political co-operation,” SID programme director Aidan Eyakuze says.

“The signing and ratification of the treaty and subsequent protocols to establish the Customs Union in 2005 and Common Market in 2010 attest to the fact that the process of deepening the integration is on track.”

According to the SID, the accession to the treaty by Rwanda and Burundi, the application by Southern Sudan and recently by Somalia is further evidence to the deepening integration.

“If their reasons for wanting to join might be inscrutable, it is clear that they all see membership in the EAC as a crucial component of their future,” says the report.

Trade between the EAC countries expanded from $2.2 billion in 2005 to $4.1 billion in 2010, the report adds, but “region’s trade with the rest of the world expanded faster, driven by its import-consuming economic growth performance.”

Integration has also deepened in the security field, most notably as the countries participate in peace-keeping and anti-insurgency mission in Somalia and the horn.

Burundi and Uganda contributed troops to the African Union Mission in Somalia (Amisom) while Kenya first entered Somalia in a declared act of self-defence and then agreed to join the Amisom command structure. 

“The number of joint military exercises in which all five EAC countries participate is also increasing,” the report notes.

But even as this integration persists, there are intensifying challenges that the bloc is currently grappling with like the number of East Africans living below the poverty line has increased from 44 to 53 million between 2005 and 2010.

Only Burundi and Kenya have not substantially reduced the proportion of their population who live below the national poverty line.

“When pushed to respond to food insecurity, some actions, such as the ban on the export of grains from Tanzania last year and Kenya’s retaliatory move to ban the export of seed, have undermined the spirit of the regional integration,” the report says.

But the report is also rooting for a radical move to give the ports of Dar es Salaam and Mombasa to the EAC.

“It would help if to start with, East Africans agreed that Kenya and Tanzania cannot run modern ports. Beside basic incompetence, there are too many backward political forces and corruption networks that have captured the ports.”

It recommends that the EAC should come together and appoint companies who know how to run ports, like Dubai Port or the Port of Boston, for example, to run Mombasa and Dar es Salaam.

Mombasa is the largest port in East Africa by followed by that of Dar es Salaam.

“The ports are no longer national facilities as there is more at stake and that they have a larger impact on the economy of the countries where the goods are taken,” Mr Eyakuze said.