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National Monitoring Committees on NTBs
Current NTBs status and Trend in EAC
 
Posted on : 24 - Jul - 2012 - Viewed : 1131 times

The Common Market Protocol came into effect in July 2010 to facilitate the realization of the four freedoms namely, the free movement of people, goods, services and labour. However, it is still a matter of great concern that Non-Tariff Barriers (NTBs) continue to undermine the free movement of goods in the EAC. NTBs to trade are probably the biggest impediment to full attainment of the objectives of the Treaty for Establishment of East African Community since they stymie both the Customs Union and Common Market.

A recent survey carried out by the Ministry of Trade and Industry (MINICOM), from 6th to 12th January 2012, along the Central Corridor (Kigali – Dar es Salaam) revealed that traders are still facing NTBs along this route.

Landlocked countries such as Rwanda, Uganda and Burundi are particularly affected by NTBs and in terms of the ease of trading across borders, these countries rank among the lowest according to the 2012 World Bank’s Doing Business report, partly due to NTBs. In comparison to other landlocked countries from other regional economic communities such as the COMESA and SADC, EAC landlocked states lag behind on the Trading Across Borders Index as they incur the highest transportation costs, both for import and export of containers. For instance, while the sub-Saharan average cost to import a 40 foot container is US$ 1,960 (export) and US$ 2,504 (import), here in Rwanda it costs on average of US$ 2,250 to export and US$ 5,000 to import the same 40 foot container. The emphasize of the economic importance of cutting down transport costs was well illustrated by a study carried out by Imani Group that assessed the economic impact of Rwanda’s accession to the East African Community (EAC). The study indicated that, transport costs are pushing up the cost of trade by an estimated 30% to 50%. The study added that, reductions in these costs – through trade facilitation and through co-operation on regional infrastructure – are central to the realization of the benefits of EAC accession. Estimates of savings from trade facilitation measures such as addressing weighbridges, enhancing transparency and reducing waiting times alone are between 15% and 20% of transport costs.
The EAC agreed on a Time-Bound Program for the elimination of NTBs in December 2008. The Time-Bound Programme currently lists 36 resolved NTBs since 2008 (low progress compared to 36 outstanding ones)
The current situation is very unfortunate considering that NTBs have already been made illegal under the Customs Union Protocol of 2004 where Article 13 clearly stipulates that EAC Partner States should eliminate existing NTBs and refrain from introducing new ones .

Rwanda acknowledges that tremendous efforts to eliminate NTBs in the EAC have taken place through the EAC Secretariat (EAC time bound programme), the Northern and Central Corridor Agencies, the East African Business Council (EABC) and EAC Partner States initiatives and assertiveness to eliminate NTBs.
Among these efforts we can mention national and regional meetings of the National Monitoring Committee (NMC) and the EAC Regional Forum meetings. The recently concluded EAC Ministerial meeting on NTBs held in Mombasa on 14th March 2012 reiterated that all trade barriers must be removed in all EAC Partner States and resolved to take immediate action.
An EAC project on One Stop Border Posts (OSBP) on the main EAC borders is a positive development that will reduce border delays in a significant manner. With the introduction of a one-stop border post for some borders (Gatuna, Malaba) the situation has generally improved, including the 24/7 operations (Gatuna, Malaba, Busia) that have reduced the delays. OSBP is only limited to Customs operations and need to be extended to immigration and other borders like Busia to speed up movement of goods and persons. Customs working hours are being harmonized and recently 16 hours operations were launched at Cyanika and Rusumo borders, moving up from 12 hours.
A significant amount of work still needs to be done to create a more business friendly environment that will facilitate trade flows within and outside the EAC region. This will make transport easier, cheaper and faster for the welfare of our citizens.
A sustainable solution would be to fast track the legally binding mechanisms to eliminate NTBs so as to introduce the possibility of sanctions against non implementing/compliant countries/institutions.