Rwanda’s captains of industry want the East African Community (EAC) secretariat changed into a commission to give it more teeth to deal with fights over market access.
At a roundtable between the East African Business Council CEOs and the EAC Secretary-General last week in Kigali, the Private Sector Federation-Rwanda (PSF-R) raised concerns over a high number of outstanding non-tariff barriers.
Top on the list of grievances is lack of market access for their goods, produce and services, due to regulatory misalignment within the bloc.
The businesses are proposing a change in the administration structure of the regional body from a secretariat to a commission with powers to settle trade disputes.
“In my observation, a community of nations without a competent authority that drives evolution of shared standards and enforces them cannot achieve much,” said Bosco Rusagara, an EABC board member. “It is high time we advocated for the EAC Secretariat to become the EAC Commission, with powers to shape and grow harmonised regulations and to enforce them.”
Turning the EAC into a commission is based on the argument that most regional bodies in Africa are not about full integration and have generally fallen short of effectively delivering on their mandates and goals for which they were created.
Mr Rusagara argued that the EU model, where countries have largely collapsed their borders, was caused by political goodwill and good economic policies of the member states that formed it. In the EAC, an economic integration has lacked that, he argued.
One problem for the EAC is that it heavily relies on the idea of harmonisation of laws, rather than a compulsory buy-in for any policies adopted by the bloc. It also relies on the principle of variable geometry, which means countries can adopt policies when they feel ready.
“Economic growth can only happen if factors of trade are not distorted by bad policies and regulations. This calls for an empowered EAC Secretariat, hence the EU integration process offers the best model for EAC to emulate,” Mr Rusagara said.
The Rwandan private sector listed a number of emerging and unresolved NTBs that have affected business with their neighbours.
Under transport and logistics, the challenges include non-implementation of the container deposit guarantee for the land linked countries.
The Rwandan transport sector decried corruption on the East African roads, where trucks are charged different toll charges.
From the ports of Mombasa and Dar es Salaam, road charges differ from one toll station to another, adding to high costs of doing business in the landlocked Rwanda.
“The way the road toll is not uniform. There are unfair charges on the road toll of the trailer and its head,” said Mr Abdoul Ndarubogoye, president of the Long Distance Truckers Association.
“Rwandan trucks are charged arbitrary levies, including requiring certificates on either the truck or the contents, especially on the trucks that use the Mombasa-Taita Taveta and through the Central Corridor in Tanzania.”
Tanzania charges Rwandan trucks $10 per 1,00km on a 1,300km road between Rusumo and Dar es Salaam. Initially the rate was $152 under bilateral agreement and $5 for clearing of trucks.
This has increased the cost of doing business on the Central Corridor, with the costs eventually passed on to the consumers.
There are stringent requirements for chemical permits that increase the cost for transporters.
Non-integration of the revenue system in the EAC Partner States Implementation of the Single System in EAC is hurting Rwandan truck transporters.
“The online application in Tanzania requires a Tanzanian company to make the application on behalf of Rwandese companies,” Mr Ndarubogoye pointed out.
Truckers accuse the Tanzania Revenue Authority of laxity in geofencing the road, but some observers blame it on insidious competition for business.
A road is geofenced when it has inspection points and cargo passing through it can be tracked electronically for taxation and avoidance of dumping.
Lack of harmonised investment policies in the tourism sector leading to different treatment for East Africans is hurting Rwanda’s tourism sector with Uganda, the Rwandans said.
Non-implementation of the EAC Single Tourist Visa by some partner states has impacted Rwanda’s tourism sector. Rwandan safari vans are charged high road user fees whenever they cross over to Uganda, the operators said.
EAC export taxes of 80 percent on hides and skins are making it difficult for Rwandan producers to access export markets, as they become very expensive and uncompetitive.
EAC Secretary-General Veronica Nduva urged the private sector to promote the EAC as a unified trade bloc, emphasising that regional benefits outweigh national interests, with the EAC's market of 312 million being far larger than individual national markets.
