The Port of Mombasa, Kenya. Goods will now be cleared at the point of origin, thus avoiding multiple checks at border posts. PHOTO | LABAN WALLOGA | NATION MEDIA GROUP
The new regime seeks to minimise delays and costs for goods moving across borders to export markets by having them cleared at the point of origin.
East Africa Community member states agreed to begin with the five commodities and a pilot was started on May 10. Â
East Africa’s exports are not raking in as much as what countries spend on imports, which has created a vicious circle of seeking debt to finance expenditures.
Regional exporters of coffee, tea, fish, hides and skins are set to enjoy faster transit times from next month, when the commodities start being cleared under the Single Customs Territory.
The new regime seeks to minimise delays and costs for goods moving across borders to export markets by having them cleared at the point of origin.
This will help avoid further customs checks at border points and when being loaded for shipping overseas.
East Africa Community member states agreed to begin with the five commodities and a pilot was started on May 10. Â
A statement from the East African Community Customs Committee said they started piloting the single customs regime for exports on May 10, with a full rollout of all exports set for June 1.
The customs committee said it is implementing a directive of the 19th East African Community Summit in February, which requires the Single Customs Territory regime to cover all products.
Therefore, in December, the region fully rolled out the regime for all maritime and intra-trade imports, according to a statement by the committee.
East Africa’s exports are not raking in as much as what countries spend on imports, which has created a vicious circle of seeking debt to finance expenditures.
Mounting debt
For instance, Kenya recently raised $2 billion, including a 30-year debt from international markets, while Rwanda is financing a 10-year $400 million Eurobond and is considering a new one.
Tanzania is also expected to float a $700 million Eurobond this year though the government has yet to confirm the details.
Member countries are also accumulating debt from China, though this is mainly tied to infrastructure projects.
The 2018 World Bank Doing Business Report shows Uganda, Kenya, Tanzania, and Burundi scored poorly in the cross-border trade indicator.
Rwanda was in 87th position in the ease of facilitating cross-border trade, Kenya followed closely at number 106, Uganda at 127, Burundi at 164 while Tanzania was at position 182.
Trade experts say removing non-tariff barriers can reduce the cost of moving goods across borders by between 12.5 per cent and 17 per cent.
Progress has been made in the region with goods taking about three to five days to get from the ports of Mombasa or Dar es Salaam to Kampala, Kigali or Bujumbura.
This has also reduced the additional costs transporters used to incur when a truck is stationary for a full day. The typical charge for a stationary truck is $200 to $400.
