Easing regional trade by reducing dwell times at regional borders
By Paul Ntambara
As the Private Sector continues to put focus on the region as a trade bloc, in its advocacy role, the Private Sector Federation (PSF) is engaging stakeholders in discussions to ensure a hassle-free business working environment within the country and region. First on the agenda has been establishing an organized private sector.
“Our task as a Federation has been to bring people of like professions together in one organization to enable them benefit from working as a team, making it easy for lobbying ,” says Hannington Namara, CEO Private Sector Federation.
“Organizing the private sector is meant to grow businesses which translate into the growth of the economy.”
PSF is made up of 72 professional organizations. These have been further organized into Clusters, made up of associations with related activities. All these combine to make 10 Chambers. Territorial structures at the Province, district and sector level have been set up to bring business persons who don’t belong to any of the professional associations in the loop.
Leaders of the different associations are business owners who understand better the challenges they are faced with in their work.
Reforms in cross-border trade
Rwanda is a landlocked country; as a result, high transport costs are bound to affect businesses and cost of living in general. When this transport chain is not streamlined, goods are bound to become expensive. With the advocacy from PSF, the conditions for import and export business have improved considerably making it much easier to operate an export/import business in Rwanda.
Some of the interventions by government and other partners to improve cross border trade include;
• Electronic Single Window; making the clearing process easy and efficient
• Blue Channel for customs clearance
• Introduction of electronic cargo scanners
• One stop border post
• Extension of working hours at customs offices and borders
The introduction of the Electronic Single Window System has cut down on Paper work involved in the clearing of goods. It also increases efficiency through time and cost savings for traders in their dealings with various government authorities for obtaining the relevant clearance and permit(s) for moving cargo across national or economic borders. The facility allows parties involved in trade and transport to lodge standardized information and documents with a single entry point to fulfil all import, export, and transit-related regulatory requirements.
Currently only three documents remain obligatory;
• Commercial invoice
• Packing list
• Bill of lading
Business people and transporters in the region have started to enjoy the fruits of the reforms. For example reforms have positively influenced the cost of transporting goods in and out of the country.
• Inland transportation of exported goods from Rwanda (per container) :US$2,250
• Inland transportation of imported goods to Rwanda: US$5000
Currently it takes a maximum of 7 days to deliver goods from Rwanda to Mombasa and Dar es Salaam ports and 10 days to deliver goods to Rwanda from the two ports. The time includes clearance at borders, customs and ports and other procedures required for transit.
Transporters in the region acknowledge efforts to eliminate Non Tariff Barriers (NTBs) in the EAC through the East African Community secretariat facilitation (EAC time bound program), the Northern and Central corridor agencies, the East African Business Council and partner states initiatives and assertiveness to eliminate NTBs.
Theodore Murenzi, the Secretary General of Long Distance Truck Driver’s Association in Rwanda says that the introduction of a one-stop border post at Gatuna and Malaba and the 24 hour operation of these borders has reduced delays for trucks in transit.
“The 24 hour operation of these borders saves time and money on the side of transporters. This inevitably reduces the cost of transportation. The onus lies on business people to take advantage of these facilities,” says Murenzi.
Despite the progress made Murenzi says that challenges still abound. The number of weighing scales in the regional countries is still high. Some border posts still lack enough staff to operate 24 hours. He however acknowledges that measures have been put in place to address all emerging challenges.
“Committees to discuss emerging challenges have been established in the EAC. These include; the National Committee on non-tariff barriers to discuss challenges in Rwanda and in the region.”
Associations of track drivers in the region have set up a regional transport network where challenges faced by transporters are discussed. There has also been an axle load harmonization in the region, and the standardization of weighing scales.
According to Fred Seka, the Vice Chairman of the Association of Clearing and Freight Forwarders in Rwanda, the business climate in the country and region has greatly improved.
“The relations between the tax body; Rwanda Revenue Authority and the business community have greatly improved. Facilities like the blue channel for compliant customers have saved on time and cost of doing business,” says Seka.
Blue channel is a facility accorded to compliant taxpayers by not subjecting their consignments to physical and documentary verification during the customs clearance process but rather allow their goods to clear faster and follow up with a customs post clearance audit. This cuts down on costs and time lost during loading and offloading of merchandise for inspection at the different warehouses.
Other regimes to facilitate business people include; Pre-clearance, a quick release procedure that allows trade facilitation in that declaration can be submitted to Customs and processed before the arrival of goods.
According to Seka, 65 percent of the importers fall in the blue channel regime. Another facility; One Stop Border Inspection is in the offing, goods will have to be inspected once.
“Business people should take advantage of the increased working hours to 18 hrs in customs department; we are ready to clear goods until midnight,” he adds.
The Private Sector Federation is working on a program to ensure that at least all associations have a legal status; that they are legally registered and that they have an agenda that they want achieve for their members.
Namara, the PSF Chief Executive Officer says that it is important that members of the private sector belong in a formal arrangement for it is only then that can be called an organized private sector.
“It is important that they belong to professional associations that are going to give them meaningful advocacy, other than that it becomes difficult to attend to every one individual, we are not even designed to offer such services as the Private Sector Federation,” he adds.