Lower trade costs will get us to Middle Income status

How effective are East African border points?
Government of Uganda and Trademark East Africa (TMEA), with funding from Department for International Development ( DFID), have constructed and operationalised Busia (border with Kenya), Mirama Hills (border with Rwanda) and Mutukula (border with Tanzania).
Construction of Elegu (border with South Sudan) is underway and is expected to be operational before the end of this year. The parking area is to be expanded to hold large volumes of cargo to and from South Sudan and Northern Uganda.
Based on the time and traffic survey they have been conducted on the one-stop border points of Busia, Mutukula and Mirama Hills, these border points are effective because of infrastructure upgrades which ensure that clearance is once on one side of the border, with coordination of all border agencies.
At Busia, if a cargo truck or passenger bus is coming from Kenya into Uganda, the truck does not have to stop at the Kenyan side of the border; it only stops at the Ugandan side where all controls and checks are conducted by both the Ugandan and the Kenyan border officials. This is the One-Stop Border Control.
Studies indicate that a delay of one day costs private sector $400 (about Shs1.4 million) per truck.
At Busia border, clearance time has reduced by 87 per cent from an average of 2.5 days before the one-stop controls to less than one day after the controls.
At Mutukula border, clearance time has reduced from an average of 2.2 days to eight hours after the one-stop controls.
In March, which was the first month of this cross border tracking system, the best transit time recorded from Mombasa to Kampala was 18 hours, down from 18 days in 2012.

Which areas should EAC borders focus on to improve trade?
For those borders where infrastructure has been upgraded and one-stop controls operationalised, there is need to provide maintenance allocations. Where need be, these border posts should be operational on a 24-hour basis.
Mutukula is operating on a 12-hour basis. However, this may change as traffic volumes through the Central Corridor to Uganda increase. In addition, banks and forex bureaus should avail their services at these borders points on a 24-hour basis.

Why is trade facilitation important?
Trade is a catalyst for economic growth, job creation and poverty reduction. Therefore, lowering Uganda’s trade costs is key to improving our livelihoods and ensuring we get to the middle income status. The ease of trading across borders is one of the key considerations investors look at.
As Uganda moves ahead with plans for oil and gas, trade logistics management is important for moving in equipment and finished products.

Critics say more effort should be put in strengthening Uganda’s economy and the region before streamlining border operations. What is your view?
Over 60 per cent of Uganda’s exports are intra-regional exports, meaning we trade more with our land neighbours. Therefore, to strengthen our economy, we need to ensure that border operations are efficient.
Strengthening Uganda’s economy and streamlining border operations go hand in hand. A World Bank study established that a one day’s delay in trade is equivalent to a country distancing itself from its trade partners by about 70kms on average.

Despite some order at various border points, smuggling is still rife. How can the governments get traders to use designated border posts?
When border clearance procedures are streamlined, increases in costs that arise from crossing a border are eliminated and the incentive for smuggling is eliminated. The operationalisation of the Cross Border Trade Charter and the Simplified Trade Regime are key tools in this process.
The Trade ministry recently commissioned TMEA’s comprehensive Cross-Border Trade Strategy that will create simple procedures for small cross border traders and women traders and avail key trade information to this segment of traders. We hope this intervention will drastically reduce smuggling.

How much money have you injected in improving border points/posts operations?
TMEA Uganda, with funding from DFID, has supported the construction of four border posts with the Government of Uganda at a cost of about $25 million (about Shs90 billion).

What are your plans?
In our second phase of the strategy (2017-2023) we are putting more emphasis on interventions that have an impact on job creation, poverty reduction, increase in exports and government revenue.
TMEA will implement key components of the National Development Plan. We are planning some trade logistics hubs in Gulu, Kampala, Jinja and Busia with the Government of Uganda and TMEA’s donor partners.
These trade logistics hubs will be complimented with ICT for trade solutions, improve on the movement of people and goods in Uganda and the general competitiveness of our business environment.
In 2016, 82 per cent of transit cargo through Mombasa Port was destined for Uganda.