East Africa: EAC Business Community Wants Air Transport Costs Reviewed

22 November 2019

Harmonising airspace is one of the issues that the East Africa Business Council will discuss during the East African Business and Investment summit slated to take place in Arusha, Tanzania from November 28 to 29.

Denis Karera, the Vice Chairman of the Council told members of the press on Wednesday that the summit seeks to address the most pressing issues challenging business in the region, especially cross border trade.

"Non-tariff barriers impede cross border trade. One of the key things we want to raise, again, is domestication of airspace so that our airlines can move easily and quickly and tickets can become cheaper as well," he said.

He said that none harmonized and heavy duties imposed on airlines landing at different African airports drives up the flight ticket prices.

"You have to wonder why flight tickets are expensive in the region. Rwanda charges taxes, Kenya charges taxes, and Uganda charges taxes among others on handling services for every landing. We have to deal with this and domesticate airspace as it is happening elsewhere.

We want to advocate so that governments slash such heavy taxes. We have been discussing this for so many years and now we need harmonization of the airspace," he raised.

He cited an example of some airlines that charge $800 for a passenger flying from Kigali to Nairobi for one hour.

"This impedes movement of people. A flight ticket price could go for $110 but due to heavy taxes, it rises," he said.

Other issues to be discussed, he said, include external tariffs which been the subject of scrutiny for over a year as well as the high levies charged on passenger buses that operate across the region.

"For instance, a bus transporting people of whom many are business people from Rwanda to Nairobi pays $150 taxes ... , the same amount that cargo truck carrying two containers pays," he said.

Karera also said that the issue of minerals containers that go missing on the way will be among the discussion.

"We have a case of minerals containers that went missing when (they) arrived in Tanzania," he noted.

He said that over the past 20 years out of 175 non-tariff barriers there only remain around 50 barriers to be addressed.

"We still need to talk about free movement of people, one-stop border posts. We look at easing doing business environment. We have met our business community and asked them about the current challenges they are facing so that they be discussed in the summit.

Each country has put together its challenges. We will meet council of ministers responsible for EAC affairs to directly ask them about issues affecting the regional trade," he said.

The business council boasts about many achievements over the past 20 years in terms of easing business.

"For example, we used to request for visas to travel to go to Kenya but now people are using Identity cards. There were no public transport buses crossing borders.

Tourists used to request for visas from every country to visit EAC countries but they now need only one visa to visit all member states. Airspace services have also expanded through RwandAir. This attracts investors and business people," he said.

Containers from Tanzania could take over two months to arrive in Rwanda but now take only seven day, he noted.

He added that telecommunication has also been eased through mobile phones which was not previously easy while regional banks have drastically increased to enhance financial services.

Integrating DRC in EAC

Karera said that having DRC requesting to join EAC is another advantage for the council.

"For us as the council, we urge concerned institutions to fast-track examination of their request. But mean as of now cross border trade is ongoing between Rwanda and DRC Congo. Petite Barriere is the busiest border in Rwanda with the highest traffic of trade in the region and that is why we wish that they join us and become a member of the council and boost the trade," said.

Daily cross border movements are estimated at between 45,000 and 50,000 people.

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