Manufacturers in East Africa are pushing for the full implementation of the Common External Tariff on goods and cereals from outside the bloc to protect local businesses.
They say Asian countries such as China, Pakistan and Taiwan continue to flood the regional markets with rice, cooking oil, noodles, and wheat, blamed on tax exemption by some partner states.
Vimal Shah, chairman of consumer goods firm Bidco Africa, addressing the African CEO Forum in Kigali on Monday, called for a borderless East Africa.
He cited Tanzania as particularly “problematic” for regional farmers and manufacturers by being “creative” with tariff and non-tariff regimes. “They block trade, they don’t comply with the rules,” he said.
Addressing the forum, Joshua Rugema, CEO of the East African Commodities Exchange, blamed the flooding of the markets with foreign goods on the high cost of transportation.
“As long as transaction and logistics costs remain high, goods from outside the region will keep coming,” he said. “There is still a big infrastructure gap in the region, countries still have to invest in infrastructure if they are to bring down trade costs.”
Mr Rugema emphasised the need for the harmonisation of standards for agricultural products in the region.
“Farmers know that there is a reward for quality, but there is a need for capacity to produce that quality. The demand side has never been better for a farmer,” he said, adding that additional costs such as packaging make the region’s products uncompetitive.
Agriculture accounts for 36 per cent of the region’s GDP and supports about 80 per cent of the population.
The African Continental Free Trade Area, which is close to taking effect with only one ratification remaining, has the potential to stimulate intra-African trade by up to $35 billion per year, creating a 52 per cent increase in trade by 2022 and a vital $10 billon decrease in imports from outside Africa.
Agriculture will have a huge contribution in this growth.