Remove Trade Barriers Now

27 April 2011

editorial

When the East African Heads of State met in Dar es Salaam last week, one of their key assignments was to review and make a progressive decision on a report of the proposed regional customs authority.

By the end of their meeting, the leaders were in agreement albeit on a not so progressive move. They rejected the report on a joint revenue authority stating that the report put before them was not sufficient to support a substantive decision.

One of their key arguments was that the report, which sought to examine different models for the single regional authority, had failed to examine the economic cost of implementing each of the models. The regional leaders might have had a valid argument but that translates into yet another delay in the integration process.

For now, individual countries will continue to run their customs systems. The business community in the region continues to state that the current multiple administrative structures that each country has put in place to collect customs and immigration fees have slowed down the pace of cross-border trade in the region.

Presently, goods imported by member states are required to make stopovers at all border crossing points for payment of custom taxes and inspection among other procedures. These barriers raise transit costs by 15 per cent according to estimates from experts.

Speaking to the East African Legislative Assembly last month, Rwandan President Paul Kagame highlighted the need to resolve outstanding challenges hampering and slowing down the regional integration process.

Thankfully, this call was reiterated when the leaders met recently, with Tanzanaian President Jakaya Kikwete stating that the intra-East African trade has so far increased from $1.85 billion to $3.5billion in four years, an increase of 52.8 per cent. As President Kikwete aptly put it, ending bureaucracy and harmonising policies would push up the trade. There is need, however, for all players to move at faster pace if we are going to guarantee stronger growth and a better life in the region.

AllAfrica – All the Time