Traders within the East African Community (EAC) will soon be able to report cross–border challenges live and get prompt feedback on the same. This is thanks to an initiative by the newly appointed EAC Secretary General Dr. Peter Mathuki that seeks to resolve persistent Non-Tariff Barriers (NTBs) at regional border points.
Dr. Mathuki has hit the ground running and having come from being at the helm of the East African Business Council (EABC), a regional business arm of the EAC, he understands the struggles that the common trader faces while doing business within the bloc. This makes him an ideal leader as he makes decisions based on the experiences he has been encountering when he was on the other side of the table.
Dr. Mathuki has now vowed to improve trade in the region which currently stands at 15 per cent by removing some of the challenges threatening the stability of regional trade. According to him, some of the persistent NTBs include restricted market access for goods and un-harmonized charges that continue to frustrate intra-EAC trade. He says that investment by increasing transaction costs and curtailing movement of goods are contributing to the low intra-EAC trade. “EAC intra-regional trade is under 20 per cent, and it is my mission to ensure that this grows to at least 50 per cent in the next five years,” he said.
One of his agendas is to have a database of these challenges as they emerge so his office can investigate the causes and triggers and work to resolve the issues as they come up. To achieve this, he plans to avail a hotline that links to a platform which will register all cross-border challenges and have a team ready to respond to those challenges and give updates to traders.
Dr. Mathuki, is keen on ensuring smooth and ease of doing business on the bloc as he officially made his first maiden visit at the Namanga One Stop Border Post (OSBP) on May 13th, meeting trade facilitation agencies (TFAs) and cross–border traders to deliberate on sustainable solutions to ease cross–border trade. He believes that trade is a major driving factor of the EAC integration, and thus the need to ensure businesspeople in the region can transact business without any hurdles. “The hotline will enable us to register persistent trade barriers, provide feedback and make follow ups,” said Dr. Mathuki.
The EABC facilitating the Public Private Dialogue (PPD) affirmed that the movement of goods and persons at the Namanga One Stop Border Post (OSBP) and truck traffic impasse has cleared following the directive by President H.E. Uhuru Kenyatta of Kenya during the recent visit by H.E. Samia Suluhu, President of Tanzania.
The meeting providing a platform for cross–border traders, trade facilitation agencies, EABC and the EAC Secretariat to discuss sustainable solutions to boost bilateral and regional cross-border trade saw the traders urge for the harmonization of standards for the most traded goods in the region.
EABC is calling for the harmonization of taxes and charges across the region, reduction of weigh bridge costs and punitive fines imposed across borders mostly by county governments where these borders are operational. The fines drive up cost of goods transportation within the bloc creating an unfavourable competition with cheaper imported goods into the EAC.
Speaking at the forum, Tanzania Revenue Authority (TRA) Namanga OSBP Manager, Paul Kamkulu stated that in 2019/2020, Tanzania’s imports from Kenya stood at approximately $138.79 million while exports were approximately $124.33 million. In 2020/2021, imports stood at approximately $131.44 million while exports amounted to approximately $170.40 million.
Kenya Revenue Authority (KRA) Namanga Station Manager, Joseph Moywaywa, noted that amid the pandemic, Kenya’s top exports to Tanzania include detergent, tiles, automotives and solar panels, whilst Tanzania’s top exports to Kenya include fresh vegetables, alcoholic drinks and fertilizer.
H.E. Amb. Dr. John Simbachawene, Tanzania’s Ambassador to Kenya, reiterated the commitment of his government in deepening relations to resolve barriers disrupting trade.
The SG, who at the time of writing this article, has been in office for less than a fortnight, was lauded for being the first one to hold a public private dialogue with traders and facilitation agencies at the Namanga OSBP, in a move creating optimism on fast-tracking pending trade and policy issues.
Dr. Mathuki takes over the EAC office with a list of key priority areas that he intends to focus on. These include ensuring that the Customs Union and Common Market function at their optimal levels to promote economic growth; and establishing a single currency for use throughout East Africa as envisaged under the East African Monetary Union Protocol which will, among other things, ease trade and the cost of doing business within the region.
The SG further said he intends to put in place a dispute settlement mechanism as a follow up to the ratification of the customs union protocol in addition to a trade remedies committee.
In addition, the SG said he will work closely with Partner States and the private sector to reduce the cost of energy which has a major impact on the competitiveness of products; and rollout of the one area network to all Partner States to boost trade and interaction among EAC citizens through affordable mobile calling and data tariffs.
“I intend to go the extra mile to improve the working relationship between policymakers and the business community, through public-private sector dialogue initiatives,” said the Secretary General at a recent dinner roundtable in Kigali, Rwanda.