East African Business Week (Kampala)
Cedric Lumiti
27 June 2008
Kenya has been blamed for the rising food prices in landlocked countries like Uganda and a few others that depend on Mombasa port to import goods, a World Bank report has observed.
The report reveals that Uganda is likely to suffer higher food prices due to lengthy cross-border procedures at the Busia and Malaba boarder points according to the report. A study by World Bank has revealed.
The World Trade Indicators 2008 study report released by the World Bank Institute said goods to Great Lakes Region from the ports of Dar-es-Salaam and Mombasa took unnecessarily long.
"Goods bound for Uganda, Rwanda, and Burundi spend an average of five days more - 25 versus 20 days- in Tanzania's Dar Es Salaam port than domestically bound goods," said the report.
The bank said shipping costs and related expenses are also a key component of food prices, and are generally far higher for many low-income countries than for industrialized ones.
A bank paper on rising food prices released during the IMF-World Bank annual meetings earlier this month said trucking operators in oil-importing land locked countries, were paying as much as 50 per cent more for fuel than in other countries of the region even before the recent oil price jumps.
"Delays increase costs and the uncertainty of delivery, and that's as big a problem as a lengthy transport process," said the report.
It says other factors such as cartels in the trucking industry in both landlocked and coastal countries and also bribe-taking drive up the costs. According to the report, corruption on some major highways adds 10 per cent to overheads and may occur every 30km, or even more frequently.
The business community in East Africa has often complained of numerous police checks along the Northern Corridor between Mombasa and Busia.
On Monday, Procter & Gamble country manager for Eastern Africa, Andrew Plastow complained that it was cheaper to transport manufactured goods from Cairo to Mombasa than from the latter to Nairobi.
This is mainly due to numerous roadblocks manned by policemen as well as poor road network.
However, the World Bank said that most developing countries continued to improve trade policies supporting greater integration last year.
It said countries with lower barriers tended to have stronger, more consistent trade and export performance over the past decade.
"The ranking shows that those countries that have reduced their trade barriers, and are doing well on trade facilitation and institutions, have also experienced sustained increases in their volume of trade," said Roumeen Islam, a manager at the World Bank Institute.
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