Fix non-tariff barriers to reduce cost of trade

Friday August 16 2019

Intra-EAC trade continues to face a number of

Intra-EAC trade continues to face a number of challenges with some countries blocking entry of particular goods. FILE PHOTO 

By Editor

Non-Tariff Barriers (NTBs) have a huge bearing on the cost of doing business not only in Uganda but also the entire East African (EAC) region.
NTBs are restrictions that result from prohibitions, conditions or specific market requirements that make importation or exportation of products difficult and/or costly.
The EAC Elimination of NTB Act, 2017, defines NTB as laws, regulations, administrative and technical requirements other than tariffs imposed by a partner state, whose effect is to impede trade. Uganda loses about $827m (about Shs3.1 trillion) annually in logistics inefficiencies in import and export of goods. Yet logistics costs account for between 18 and 20 per cent of the sale price of goods sold in Uganda, according to National Logistics Platform.
Currently, logistics bottlenecks and inefficiencies are present at multiple stages in the supply chain, including loading, delivery and warehousing, packaging and waste management. Traffic congestion along key transport corridors, roadblocks and checkpoints only push up time and costs of logistics, which are passed onto the shippers, but the consumers ultimately pay the price.
Other challenges include absence of synergies within ministries, departments and agencies of government, insufficient information on trade and services, undefined taxes, challenges around Pre-Export Verification of Conformity and absence of Small and Medium Enterprises database, plus the high cost of finance.
The 2018 port transit report places Uganda as the biggest user of the Mombasa port with about 82 per cent of her cargo passing through it. But Ugandan traders also lose their cargo more often whenever they dock at Mombasa port. This is coupled with high demurrage fees.
Since both Kenya and Uganda are key to trade facilitation across the Northern Corridor, they must continue working together. There is also need to increase manpower to ensure seamless movements of cargo.
But there should be synergies among regional member states to implement the trade policies that promote efficient border management and increase regional trade. Additionally, several national laws are yet to be amended to conform to the Common Market Protocol provisions. By 2018, more than 100 laws in the six partner states’ national legislations had not yet been reviewed to conform to the EAC Common Market Protocol. Regional states should also design tangible proposals which mitigate challenges hindering fulfillment of obligations under Trade Facilitation Agreements.
Regional states should move faster in adopting to new technologies to quell NTBs. Information and Communication Technology can create an infrastructure that is open, transparent and reliable.
If this is done well, NTBs affecting imports and export trade would be wiped out.