24hr operations spur cross-border trade

Improved operations at the Rwandan border side of Gatuna are expected to boost trade as traders are now able to clear goods up to late hours.The upgrading of Gatuna to a one stop border post (OSBP) operating for 24 hours has boosted cross border businesses thus facilitating regional trade.Total exports during the first half of 2012 increased to $51.04 million up from $ 30.52 million at the same period in 2011 indicating an increase of 67.3 percent.Ugandan trader, Judith Nayigga, 39, feels relaxed and unperturbed about clearing her goods. “I don’t need to rush because things have been simplified, I can clear my goods any time I want, even at night,” Nayigga said glowingly. Traders no longer need to bother rushing to the border to clear their goods before night fall thus increasing the volume of trade between Rwanda-Uganda to bolster the regional market. “This helps us in doing business because we save money and time,” she narratedGatuna Border is the main entrance point to Rwanda and handles most of the country’s transit goods with an average of 200 trucks, 40 buses, 35 vehicles and around 2,000 people crossing over daily. “The flow of business at the border has increased market access, revenues and increased multi dimensional development of Rwanda and Uganda,” commented John Tumwesigye, the marketing and advertising manager of Movit industries, a cosmetics company in Uganda.Enock Miyanda, a bus conductor with Gaaga, a regional bus company asserts that there has been an increment of goods entering Rwanda from Uganda due to simplified business procedures such as clearing and taxation regimes. “Every day you see an increase in language, most buses which have not been ferrying language are now doing so as many businessmen now travel often which has not been the case before,” he said.With the implementation of the common market protocol which among other things provides for import duty exemptions of goods originating from member states of East African Community, cross border trade between the two countries has greatly improved.“Specifically, people are encouraged by the fact that cross border trade has been simplified through implementation of the common market protocol,” John Bosco Kanyangoga, an independent consultant in trade policy issues noted.This has further strengthened regional business with most manufactured goods from Uganda and Kenya entering Rwanda through the Gatuna border with Rwanda’s exports mainly in form of agricultural products making their way to the seaport of Mombasa.Imports declined by 18.7 percent to $10.48 million in first half of 2012 from $12.89 at the same period last year, according to Central Bank statistics.The Governor Central Bank, Claver Gatete, says the performance has led to an improvement in the country’s positive informal trade balance that is worth $40.56 million with neighbouring countries.Nevertheless, challenges hindering the effectiveness of cross border still linger, a situation experts say needs to be addressed.For example, lack of a common EAC Value Added Tax model, harmonisation of tax bases, unharmonised rules and practices for the VAT refunds and a need to equalise the administration and the tax procedures in all Partner States as stated in Article 83 of EAC Treaty.“There are considerable differences in the definitions of the tax bases, the tax rates as well as schedules in the EAC which lay ground for potential harmful tax competition in the region and require harmonisation,” Angello Musinguzi, a Tax Manager with KPMG Rwanda observed.In addition, there is need for effective implementation of the common market protocol that attempts to establish a legal framework for the free movement of capital, goods among others.Effective implementation of the EAC Common Market Protocol requires a number of policy measures that are yet to be worked on, Kanyangoga addsHe says that abolishing Non Tariff Barriers along the trade corridors, harmonisation of various laws; and mutual recognition of academic and professional qualifications would greatly improve cross border transactions.Experts are optimistic that through public private partnerships, the region’s infrastructure would be improved which is critical towards facilitating trade.