24 October 2013

East Africa: Rwanda, Kenya and Uganda to Launch Single Customs Territory

The Heads of State of Rwanda, Uganda and Kenya will meet in Kigali on Monday to launch the single customs territory, a move that will facilitate the movement of goods from the Mombasa port to East Africa's interior.

This supply route is what is known as the Northern Corridor. The development is under a trilateral framework, which seeks to fast-track different initiatives agreed upon under the auspices of the East African Community.

According to Monique Mukaruliza, the national coordinator of the trilateral initiative, the third trilateral summit will be preceded by a ministerial meeting this weekend.

The summit will also decide on the issue of South Sudan's request to join the initiative which includes key cross-border infrastructural projects.

It is expected that South Sudanese President Salva Kiir will also attend the Summit.

"The single customs territory means that importers will no longer have to go for their commodities at port of Mombasa, they will be clearing them from here electronically," she said.

Once implemented, the initiative is expected to eradicate barriers to trade by adopting a central model of clearance of goods, whereby tax clearance and inspection will be done only at the first point of entry. This is expected to ease doing business as a result.

First project:

The single customs territory is set to be the first project to be achieved since the three countries agreed to go trilateral in spearheading several projects initially conceptualised under the wider East African Community (EAC) Framework.

Rwanda is spearheading the realisation of the customs territory alongside the use of national identity cards as travel documents within the three countries as well as the establishment and use of a single tourist visa.

However, the identity card and tourist visa projects will be implemented January next year.

During the summit, other countries will present progress reports on how far they had gone in fast-tracking their designated projects.

Uganda was charged with fast tracking political federation, standard gauge railway from Mombasa to Kigali through Kampala as well as the oil refinery, while Kenya is in charge of overseeing the oil pipeline and electricity generation and transmission across the three countries.

The envisaged single customs territory is expected to eliminate duplication of processes; cut out costs associated with regulatory requirements; enhance synergies through shared resources and provide a springboard for the free movement of other factors of production under the common market, among others.

Rwanda Revenue Authority and Magerwa, the national bond warehouse, have already set up their offices at the Mombasa port and are ready to commence operations, according to Jean Baptiste Gasangwa, a Rwandan clearing and forwarding agent based in Mombasa.

Gasangwa, who also represents the Private Sector Federation, said that traders incur unnecessary costs in storage of their merchandise, occasioned by delays not caused by them.

Currently, importers in the country are charged between $25 and $40 as fine on every container that spends at warehouses more than nine days.

He further observed that Rwandan goods were being cleared by different Kenyan companies which were expensive, noting that it will be easy now since Rwandans will be clearing their own imports.

Until last year, an average of 2,000 tonnes of goods were being cleared through Mombasa port and destined for Kigali every week, but, according to Gasangwa, this number has reduced since some importers ditched the port for Dar es Salaam, Tanzania.

Port capacity:

Mombasa Port, the largest in east and central Africa, serves Uganda, Rwanda Burundi, eastern DRC, South Sudan and some parts of northern Tanzania.

The port has capacity to handle 780,000 Twenty foot Equivalent Units (TEUs) a year and capacity is expected to increase with the newly recently launched Berth 19 that would handle an extra 200,000 TEUs per year.

East Africa
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