East Africa: EAC Risks Losing Shs294 Trillion to Covid - Expert

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20 October 2020

The East African Community (EAC) risks losing more than $79b (about Shs294 trillion) in cash flows if restrictions implemented by various member states in combating the spread of Covid-19 are not halted, the East African Business Council (EABC) has warned.

The EABC is the regional apex body of private sector associations and corporates in East Africa, mandated with driving the East African Community (EAC) integration process through trade and investment.

Mr Peter Mathuki, the EABC chief executive officer, at the weekend said the Covid-19 pandemic has 'substantially affected' cash flows into the region, with estimates said to be between $37b(Shs137 trillion) and $79b.

"We stand to lose more than $79b due to restrictions implemented by various member states in combating the spread of Covid-19," Mr Mathuki said while meeting various stakeholders at Busia and Malaba border following a backlog of trucks on the northern corridor route.

He said unless some of the restrictions are eased, they would continue to affect trade and the cash inflow into the region.

Mr Mathuki said the most hit sectors in cash inflow are logistics (75 per cent), agriculture (25 per cent), real estate (40 per cent), tourism (92 per cent), manufacturing (36 per cent) and retail (63 per cent).

He added that it was important that procedures such as compulsory testing of all truck drivers for Covid-19 be halted.

"As East Africa, we need to see all these testing procedures for the Covid-19 halted because they are leading to a huge pile up of trucks at the border and causing delays and increased costs of doing business in the process," he noted.

In March, countries in the region closed travel to their borders, only allowing truck drivers so as to ensure that the supply chain of imports and exports out of the region was not interrupted.

Currently, interstate bus travel is still banned, making it hard for one to travel across the region to do business.

Hundreds of trucks destined for Uganda and other regions remain stuck in queues on the northern corridor, which is the main supply route for imports and exports into the Great Lakes region.

The snarl up, which in the past few days was stretching to more than 80 kilometres on the Malaba-Bugoma highway and 30 kilometres on the Kisumu-Busia routes, is blamed on shortage of test kits and reagents for Covid-19 by Kenyan ministry of health and alleged corruption by security agencies at the border.

Mr Ahmad Hussein, a truck and fuel tanker driver, last week complained that he had spent five days to cover a less than 15-kilometres distance despite having a coronavirus certificate.

He said they were only being allowed by the Kenyan police to move a short distance in the night, while in the day they were made to park.

"I have seen drivers who pay money to the Kenyan police after which they are allowed to beat the long queues, while those without money are kept in the snarl until night hours," Mr Hussein said.

Complaint

Mr Stanley Gakenga Kiberege, another truck driver, told Daily Monitor that he took three days to cover the 15-kilometre distance to the Busia border.

"These regulations are not progressive in any way. One cannot spend a week crossing a common border in the EAC region," he said.

A bilateral agreements signed among the member states says that all countries in the region were to have all their truck drivers tested two days before loading.

The drivers, according to the agreement, are required to present coronavirus certificates to border agencies before being allowed to crossover.

Uganda was offering free tests to the majority of the truck drivers, which made the Ministry of Health to impose a $65 (about Shs240,000) charge for each Covid-19 test.

However, Dr Diana Atwine, the Permanent Secretary in the Ministry of Health, deemed the provision of free tests "very expensive".

No compromise on covid protocals

Mr Julius Maganda Wandera, the State Minister for EAC Affairs, said whereas the government would not compromise on the Covid-19 protocols, a notice had been issued to the EAC Secretariat in Arusha, Tanzania. "A Sectoral Council of the Ministers of Regional Affairs was set to meet and come up with an everlasting solution to the backlog of trucks along the northern corridor route," Mr Maganda said.

On whether the testing process should be halted, Mr Maganda said Uganda will continue testing truck drivers at the border before they are allowed to enter the country. He also said that soon, the government will be in position to acquire test kits at $10 (Shs38, 000), which will make the cost of testing for Covid-19 cheaper.

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