24 February 2012

Kenya: Tanzania to Abolish U.S.$200 Levy for Trucks

Photo: Wambi Michael/IPS
Trading places.

Namanga, Kenya — The Tanzanian government has committed to abolish the $200 (Sh16,400) levy imposed on every Kenyan truck crossing into the country, as it moves to eliminate the barriers that hinder the free flow of trade.

Tanzania's East African Community (EAC) Minister Samuel Sitta admitted that the charge is illegal and would be done away with.

"Our government will ensure the elimination of the obstacles faced by EAC traders so that they can start enjoying the benefits of the Common Market Protocol," he pledged.

His government started imposing the levy on trucks ferrying goods into the country when Kenya indicated its intentions to protect its wheat industry from cheap imports including those from Tanzania.

Such unjustified levies, varying trade regulations, cumbersome immigration procedure and police blocks form part of the Non Tariff Barriers (NTBs) that have been the major impediments to the East African business community's operation.

They affect not only the private sector's competitiveness but also increase the cost of goods in the bloc.

It is estimated that NTBs contribute about 40 percent of the price of commodities.

Further, these obstacles have also affected the intra-regional trade which still remains low despite efforts to integrate the five member countries.

Currently, intra-EAC trade stands at $3.5 billion or 13 percent of the total trade within the region.

However, both the Kenyan and Tanzanian governments have resolved to address these hindrances so as to assure the promotion of free movement of goods, capital and people in the two countries.

First, the two governments have agreed to focus on curbing institutional and regulatory hurdles at Namanga border post, which is a key focal point for trade between the two countries.

The importance of this point informed the establishment of the Namanga Regional Integration Centre last year through which any East African wishing to invest in the region can have access to the information he requires to make informed decision on how to exploit the existing opportunities.

The construction of a one-stop border post that would enhance the movement of goods, capital and people is also underway.

During a tour of the busy border point with his Kenyan counterpart Musa Sirma, Sitta proposed setting up a market at the border where traders would freely engage with each other without experiencing any restrictions.

In addition, he called for the revival of joint committees between the two countries that would check and address unwarranted NTBs faced by traders at borders.

On its part, the Kenyan government assured that it would reciprocate by facilitating the removal of the current barriers while ensuring that no new ones are created.

To start with, Sirma directed the Kajiado County Council to stop collecting a Sh2,000 levy charged on transit vehicles which the authority does with the help of the police.

"Kajiado must remove with immediate effect that levy which they been levying for goods in transit and I'm sure the government is not aware about these charges," Sirma ordered.

Sirma also challenged Tanzania to ensure that the border post operates on a 24 hour basis to ensure faster clearance of goods and people.

If the two sides adhere to the rules and commit to eliminating the barriers, the officials were optimistic that trade between Kenya and Tanzania would increase significantly.

In the last financial year, trade between the two countries amounted to Sh38 billion but with the elimination of these barriers, this figure could soar even higher.

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