Nairobi: The envisioned multi-billion Lamu Port and Southern Sudan-Ethiopia Transport project will not do much to boost trade between the member states of the East African Community, says a new report by a US independent federal agency. The report published this month by the United States International Trade Commission says the future port will do little to enhance the integration and trade efficiency of the current EAC because of its location and orientation.
The higher-capacity port north of Mombasa, commissioned by President Kibaki in February, is intended to handle trade transiting to and from South Sudan and Ethiopia, as well as some domestic cargo currently entering through Mombasa. EAC current states are Kenya, Uganda, Tanzania, Rwanda and Burundi. South Sudan has applied to join the trading block of more than 120 million people but the plea is still pending.
According to the report, the region is still lagging behind in implementation of key trade facilitation measures. For instance, the report noted that EAC countries each require a different collection of documents for import and export but on average they require twice as many documents as the global best practice. Regrettably, length transit times at the border make the export costs of a container of textiles from the EAC nearly Sh210, 000 ($2500), compared to Sh49, 300 ($580) for a competitor in Vietnam.
For a coffee exporter in the EAC, it takes on average of 29 days to obtain export documentation, transport the product to port, clear customs and the get the cargo loaded on a ship, which is twice the time it takes a competitor in Brazil and Columbia.
“Reform in this area doesn't require much money, but it does require political will,” said Michael Froman, President Obama's assistant and deputy national security advisor for international economic affairs. The US has asked the EAC governments to come up with actionable ideas that it can fund to help fast track intergration between now and November.
The report aimed to summarise recent developments in trade facilitation in the EAC and to identify the potential benefits of trade facilitation to the EAC countries based on empirical studies and the experiences of other developing countries.