Rwandan traders recompense EAC losses with Comesa deals

The latest data from the Common Market for Eastern and Southern Africa (Comesa) indicates that Rwanda’s trade with other countries drawn from the bloc rose by 8.2 per cent, the largest growth compared to its peers in the region in the EAC.

Over the year, Rwanda’s total merchandise trade under the Comesa preferential trade agreement hit $1.8 billion, up from $1.69 billion in 2022, overtaking the Democratic Republic of Congo (DRC) to become the sixth top trading partner in the bloc.

Its exports saw a larger rise in the period, defying the general slump in trade within the bloc to post an 8.9 per cent growth to hit $982 million, tramping DRC’s which more than halved to $544 million.

Read: Intra-Comesa trade ‘stable’ at $14bn amid global fluctuations

Goods and services imported from peers in the bloc rose by 7.41 per cent to $855 million, while DRC’s only rose marginally to $805 million from the previous year’s $803 million, making Kigali among the top imported in the bloc.

Common market protocol

Generally, trade under Comesa saw a slump of 1.8 per cent, dropping down to $27.8 billion in total, occasioned by a global economic difficult marked by high interest rates, inflation and local currency depreciations across the continent.

In the East African region, all countries recorded a drop in their trade under the Comesa agreement, save for Rwanda and Uganda.

Kampala’s growth was just 1.6 per cent to 1.97 billion, a marginal rise from 1.93 billion in 2022.

Kenya saw a two percent drop in its trade with Comesa, but remained the second top trader under the agreement, with a total trade of $3.2 billion, trailing only Egypt, which recorded a total trade of $5.7 billion with the other member countries.

Rwanda’s defiance of the general slump in Comesa trade is linked to its traders’ disappointment with several non-tariff barriers limiting their trade with other East African Community (EAC) members, experts say.

At a roundtable with the EAC Secretariat two weeks ago, top officials from the Rwandan private sector revealed dissatisfaction and disappointment by the EAC systems and barriers to trade.

The traders said, for instance, that EAC road tolls are not uniform to all truckers, terming some of the levies charged on Rwandan transporters “unfair,” making it more expensive for them to move goods within the community.

“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,” said Abdoul Ndarubogoye, president of the Long Distance Truckers Association in Rwanda.

Bosco Rusagara, a member of the East African Business Council (EABC) said the EC Secretariat is not empowered enough to enforce the free market rules in the region, making it easy for individual member countries to flaunt them.

“Economic growth can only happen if factors of trade are not distorted by bad policies and regulations. This calls for an empowered EAC Secretariat,” Mr Rusagara told the roundtable held at the EAC headquarters in Arusha.

Intra-EAC trade currently accounts for less than 15 per cent of total trade, despite the existence of the common market protocol and the roll-out of the free movement of people, which were meant to boost trade within the region.

Last year, the region significantly increased its trading with African peers and within the common market, at the expense of trading with European and Asian countries that have traditionally dominated trade with the region.

General trade with Comesa also increased, but is still less than the intra-EAC trade.

While Comesa is also a free trade area for the member countries, not all EAC partner states are members and it has slightly stiffer liberations than the EAC common market.