Rwanda is threatening to take its neighbours to court over the continued existence of non-tariff barriers in the East African Community, which it says increase the cost of doing business for its industries, making them uncompetitive. While the five EAC partner states have in principle agreed to remove non-tariff barriers (NTBs) by December 2012, this will largely depend on the willingness of the different countries in the absence of a legally binding framework. Frustration is growing among landlocked countries like Rwanda who are paying a heavy price for the unnecessary and costly delays caused by NTBs.
Rwanda now wants the EAC to introduce legally binding commitments to eliminate NTBs that are time-bound, with penalties in case of failure to comply. Rwanda wants neighbours who fail to implement the agreed actions to be penalised by the East African Court of Justice.
According to Minister for East African Affairs Monique Mukarulinza, the draft legislation for elimination of NTBs will be submitted to the Sectoral Council of Ministers in charge of Trade and Investment by end of this month.
“We need to set up a time-bound frame backed by law that binds all the countries to implement what they have committed to do to eliminate NTBs. If they fail to do so they will be answerable to the East African Court of Justice,” Minister of Trade and Industry Francois Kanimba said, adding that the absence of a legally binding mechanism creates gaps when it comes to actual implementation of the agreed actions to address trade barriers.
“If you go through the decisions taken by EAC ministers, you will find a resolution where these road blocks and weighbridges were to be removed; but in terms of implementing the resolution, there have been issues,” Mr Kanimba said.
The draft legislation is expected to be completed by the end of this month, after which it will be submitted to the relevant EAC organs, including the Council of Ministers and the East African Legislative Assembly. Though the EAC Secretariat maintains the integration process is on course, concerns are growing over delays and foot-dragging by some member states in the implementation of the agreement.
Rwanda last year raised the red flag over delays by EAC partner states in implementing the provisions of regional protocols. The country is concerned by the delays in harmonising national laws and legislations in conformity with the EAC Common Market protocol, which has made implementation of the protocol difficult, and by the absence of reciprocity in the implementation process.
While the East African Community has in principle agreed to eliminate NTBs under the Common Market Protocol signed in July 2010, the pace of elimination has been slow, with the landlocked countries of Uganda, Rwanda and Burundi being the hardest hit by NTBs. Currently, NTBs include weighbridges, roadblocks, poor infrastructure such as bad roads, unnecessary delays at border posts plus lack of harmonised import and export standards and procedures.
Rwanda, Uganda and Burundi incur the greatest costs due to their distance from the major ports of Mombasa and Dar es Salaam. It is estimated that up to 40 per cent of the price of retail goods imported into these countries reflects transport costs. Businessmen across the region have also complained of numerous roadblocks and weighbridges along the Central and Northern Corridors. For example, a transit truck from Dar es Salaam to Rwanda is required to pass through 28 roadblocks in Tanzania, even when the cargo has Customs seals.
“Unlike our neighbours, we import most of our manufactured products and NTBs aggravate the cost of products in Rwanda. The solution is to improve how the ports are managed — specifically, the time goods have to wait to be cleared out of the ports,” said Hannington Namara, the chief executive of the Rwandan Private Sector Federation.
He also underscored the need to create a regional authority that oversees and monitors elimination of NTBs across the region. Another NTB is lack of harmonisation of import/export procedures and documentation. While Burundi, Kenya and Rwanda have nine export documents, Uganda has six and Tanzania five. Rwanda and Burundi each have 10 import documents while Kenya has nine and Tanzania and Uganda each have seven.