East African Community member states must partner to reduce trade costs

Thursday December 6 2018

eac

The EAC has slowed momentum in pushing for trade facilitation projects across the bloc, which has seen a decline in trade flows. PHOTO | CYRIL NDEGEYA  

By MOSES K. GAHIGI
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East african member states have been urged to work together to bring trade costs further down from the current $3 per-tonne per-kilometre to less than $2, according to trade experts.

A few years ago, the EAC stepped up momentum in pushing for trade facilitation projects across the bloc, but this has decelerated, affecting trade costs and resulting in a decline in trade flows.

“The trade cost per tonne per-kilometre in most middle-income countries is $1, so we still have high trade costs,” said Frank Matsaert CEO of TradeMark East Africa, adding that, “We need to be more practical about reducing these costs through options like railway, continuing to work on our ports and opening up trade with member states.”

Mr Matsaert said there is a need to address the persistent non-tariff barriers like the many police checks and export bans on food products, which continue to affect trade between the partner states.

Although projects like the Single Customs Territory have transformed trade dynamics in the region, experts called on regional leaders to do more to expedite mutually-beneficial projects, which they say are affected by protectionist tendencies by some countries.

Strengthening trade ties

The need to strengthen trade disputes mechanisms between member states has been highlighted, because political bickering and lack of political will have hindered many joint EAC projects.

TradeMark East Africa launched a good neighbour policy where it invests in creation of trade links between EAC countries and its neighbours. This was based on demand expressed by EAC member states, many of which are landlocked or land-linked.

Kenya wanted to open up trade with Ethiopia; Uganda wanted to open up trade with South Sudan and Democratic Republic of Congo; while Rwanda wanted to deepen its trade ties with DR Congo. Tanzania wanted to open up trade with DR Congo, Zambia, Malawi and Mozambique. The good neighbour policy focuses on reducing trade barriers.