Roadblocks dog East Africa trade
Sep 07, 2009
NON-tariff barriers are still hampering the smooth flow of trade within the region even after governments in the East African Community (EAC) created a framework to eliminate them.
SPECIAL REPORT
By Sylvia Juuko
NON-tariff barriers are still hampering the smooth flow of trade within the region even after governments in the East African Community (EAC) created a framework to eliminate them.
According to a study conducted on maize and cattle traders and transporters in Kenya, Uganda and Tanzania.
The study, titled “The impact of non-tariff barriers on cross-border trade in maize and beef within the EAC,†shows the extent to which non-tariff barriers have pushed up costs and closed businesses.
This comes after the abolition of intra- EAC tariffs by the Customs Union protocol in 2005. The protocol required member states to eliminate non-tariff barriers to intra-regional trade.
The report names administrative requirement, roadblocks, cumbersome customs procedures, weigh bridges, licensing procedures, corruption and trading costs as some of the non-tariff barriers.
Roadblocks were cited as the major non-tariff barrier in the region with Kenya having the highest number, hampering free trade within the region.
There is an average of 11 roadblocks in Kenya at an average distance of 194kms. Tanzania reported sixroad blocks at an average of 310km, while there were 10 road blocks at an average of 213km in Uganda.
450 maize and 357 cattle traders and transporters were interviewed by Regional Strategic Analysis and Knowledege Support System (ReSAKSS) for the study.
Juliet Wanjiku, a research systems analyst with ReSAKKS noted that the Kenyan government had indicated it intends to reduce the road blocks from 47 to 15 from Mombasa to Busia.
“Roadblocks were reported to be time wasting and an avenue for corruption staffed by unfriendly Police officers,†she said.
She added, “More than half of the traders and transporters bribed at various levels of trade transactions in order to pass through the trade barriers.â€
Nicholas Kilimani, an assistant research fellow at the Makerere University Economic Policy Research Centre, in his presentation on the Ugandan situation noted that bribes constitute the largest share of costs that transporters face in doing business.
“Transporters and traders reported incidences of exploitation especially at checkpoints where it’s almost an obligation to pay an extra cost outside the mandatory payments,†he said.
The Ugandan study covered Mutukula, Katuna, Mpondwe, Nimule, Malaba and Busia border points.
Border points astride the DR Congo and Southern Sudan were also included because of their volumes of trade.
Kilimani revealed that traders cited bad roads and delays of about 8-24 hours at the Bibia border posts as the biggest stumbling block.
“The border was reported to be closed on weekends. As a result, livestock die due to congestion on trucks and the heat from the scorching sun. This has forced a good number of traders to resort to selling their products at the border as a coping strategy,†he explained.
Kilimani added, “The largest proportion of costs goes to bribes along road blocks and loading fees. Beef traders reportedly payed sh40,000 in bribes per road-block compared to the range of sh3,000-5,000 paid by maize traders.â€
According to the study, Uganda reported more than 50% of the total maize transfer costs from origin to destination coming from non-tariff barriers.
Kenya attributed about 35% of total maize transportation costs to various non-tariff barriers while Tanzania reported 12%. The report suggests that the reduction or elimination of non-tariff barriers will reduce the higher transfer costs in the region.
It also calls for the streamlining of administrative procedures at border points through harmonising and simplifying trade regulations.
The study also advocates a regional approach to removing non-tariff barriers to exploit economies of scale.
The research further suggests that designing and implementing efficient monitoring systems to provide feedback to relevant authorities was critical if unnecessary barriers are to be removed.
By Sylvia Juuko
NON-tariff barriers are still hampering the smooth flow of trade within the region even after governments in the East African Community (EAC) created a framework to eliminate them.
According to a study conducted on maize and cattle traders and transporters in Kenya, Uganda and Tanzania.
The study, titled “The impact of non-tariff barriers on cross-border trade in maize and beef within the EAC,†shows the extent to which non-tariff barriers have pushed up costs and closed businesses.
This comes after the abolition of intra- EAC tariffs by the Customs Union protocol in 2005. The protocol required member states to eliminate non-tariff barriers to intra-regional trade.
The report names administrative requirement, roadblocks, cumbersome customs procedures, weigh bridges, licensing procedures, corruption and trading costs as some of the non-tariff barriers.
Roadblocks were cited as the major non-tariff barrier in the region with Kenya having the highest number, hampering free trade within the region.
There is an average of 11 roadblocks in Kenya at an average distance of 194kms. Tanzania reported sixroad blocks at an average of 310km, while there were 10 road blocks at an average of 213km in Uganda.
450 maize and 357 cattle traders and transporters were interviewed by Regional Strategic Analysis and Knowledege Support System (ReSAKSS) for the study.
Juliet Wanjiku, a research systems analyst with ReSAKKS noted that the Kenyan government had indicated it intends to reduce the road blocks from 47 to 15 from Mombasa to Busia.
“Roadblocks were reported to be time wasting and an avenue for corruption staffed by unfriendly Police officers,†she said.
She added, “More than half of the traders and transporters bribed at various levels of trade transactions in order to pass through the trade barriers.â€
Nicholas Kilimani, an assistant research fellow at the Makerere University Economic Policy Research Centre, in his presentation on the Ugandan situation noted that bribes constitute the largest share of costs that transporters face in doing business.
“Transporters and traders reported incidences of exploitation especially at checkpoints where it’s almost an obligation to pay an extra cost outside the mandatory payments,†he said.
The Ugandan study covered Mutukula, Katuna, Mpondwe, Nimule, Malaba and Busia border points.
Border points astride the DR Congo and Southern Sudan were also included because of their volumes of trade.
Kilimani revealed that traders cited bad roads and delays of about 8-24 hours at the Bibia border posts as the biggest stumbling block.
“The border was reported to be closed on weekends. As a result, livestock die due to congestion on trucks and the heat from the scorching sun. This has forced a good number of traders to resort to selling their products at the border as a coping strategy,†he explained.
Kilimani added, “The largest proportion of costs goes to bribes along road blocks and loading fees. Beef traders reportedly payed sh40,000 in bribes per road-block compared to the range of sh3,000-5,000 paid by maize traders.â€
According to the study, Uganda reported more than 50% of the total maize transfer costs from origin to destination coming from non-tariff barriers.
Kenya attributed about 35% of total maize transportation costs to various non-tariff barriers while Tanzania reported 12%. The report suggests that the reduction or elimination of non-tariff barriers will reduce the higher transfer costs in the region.
It also calls for the streamlining of administrative procedures at border points through harmonising and simplifying trade regulations.
The study also advocates a regional approach to removing non-tariff barriers to exploit economies of scale.
The research further suggests that designing and implementing efficient monitoring systems to provide feedback to relevant authorities was critical if unnecessary barriers are to be removed.