David Malingha Doya
31 July 2007
Nairobi — Non tariff barriers (NTBs) remain an impediment to intra-regional trade in East Africa, a survey done by the East African Business Council (EABC) shows.
In Kenya, Uganda and Tanzania where the survey was conducted, the business climate registered commendable improvement in access to reliable telecommunications. In a cross-country comparison, the survey says Kenya's business had more access to finance than the other countries between 2005 and 2006.
Eriya Kategaya, the East African Community's chairman of the Council of Ministers and Uganda's Minister for EAC Affairs, said, "The EAC, the public and private sectors and agencies that were contacted seemed to agree on areas of improvement, including access to reliable telecommunications and easier movement of citizens of Community."
The first regional business climate index survey was carried out in 2004.
However, the report titled Business Climate Index, says that NTBs are a major impediment to intra-regional business and their elimination has become the most difficult agenda of the Community's Customs Union.
Simon Ihiga, the business consultant on the survey, identified various forms of NTBs embedded in procedures of Customs, immigration and work permits, registering and licensing businesses, police roadblocks, weighbridge stations and quality standards and export certification.
A significant portion of the 504 respondents to the survey carried out in the three countries, said that a single business in cross-border trade losses between $100 and $5,000 in extra costs accruing from procedures in Customs, quality standards inspections and export certification alone.
The survey's report was launched simultaneously in Dar es Salaam, Kampala and Nairobi last week by the EABC. It follows an EAC committee formed last month to monitor the elimination of NTBs.
During the launch in Kampala, attended by company executives and representatives from government departments, it emerged that some of the NTBs were a result of double standards by the business community itself.
EAC officials said some businesses are pushing their home governments to put up various forms of NTBs on goods traded by non-nationals, while at the same time agitating for the elimination of all forms barriers at regional forums.
Peter Kiguta, EAC director general of Customs and Trade, said, "If we are to be frank, the business community itself pushes their governments to put up some NTBs. We cannot continue like this, if we are to succeed in eliminating these barriers."
Over 80 per cent of the respondents said that they spend between one hour and a whole day in Customs clearance, between 30 minutes and two hours at immigration border crossings and between one and four hours at weighbridge stations.
The survey further found that, getting a work permit takes between one week and a full year, registering and getting a business licence takes between 11 days and two months while export certification for goods, including perishables takes between one week and one month.
The time lost for a business is translated into extra costs of up to $5,000 a year in storage charges, unloading and loading and outright loss, which comes from additional days in transit like bonus pay for truckers or theft.
However between the time after responses to the survey were collected in November 2006, and July when the budget proposals were read, some things have changed. For example, many weighbridges have been removed in Uganda, and registering a business is much faster.
However, Issa Sekitto, Spokesman of Kampala city traders association observed that there is an overlap in the roles of enforcement and evaluation in the Customs department. "
The survey also reported other factors like access to power as a business-constraint that is forecasted to worsen in 2007. It showed that access to finance is easier in Kenya than in Uganda and Tanzania, while security is better in Tanzania than in Uganda and Kenya respectively.
The EABC said that the next survey will also feature Rwanda and Burundi.
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