Congo bid to join EAC a boost to West Nile trade

For generations, West Nilers bringing in cheaper commodities from the neighbouring Democratic Republic of Congo (DRC) have wrestled the taxman targeting smuggled goods.

Indeed, smugglers dread Uganda Revenue Authority (URA) enforcement teams. Nonetheless, the battles continue because the higher the business risk, the more the profits.

Smugglers in West Nile, which straddles the DRC border, prefer to call themselves cross-border traders, and some have more relatives in Congo than Uganda, underlining the thoughtlessness by colonialists in demarcating the international borders.

The commodities brought in from Congo for sale include fuel, timber, cooking oil, rice, cigarettes and textile.

And in West Nile, according to URA, it is difficult to separate genuine business people, who pay their fair share of taxes, from smugglers because in many cases either does both.

To beat surveillance, many big names businesses in West Nile towns contract tens of riders who dismantle a truckload near a border spot on Congo side and bring in the merchandise in small portions, riding away through unmanned village paths.

Once dozens of riders, some ferrying 100 to 200 kilogrammes of smuggled items, arrive at the Ugandan destination, the commodities are loaded again on another truck and driven to be offloaded at shops or outpost homes, ready for sale to middlemen and women.

URA officers know the trick and, according to some, this explains why they treat even a single rider sternly because they consider such individual one in a network of tens and working for a big-time smuggler.  

READ: One shot dead, URA office torched in clashes with boda boda cyclists

And the arrival of mobile telephones has not made things easy. For instance, a borderline farmer moonlights as an agent of smugglers to alert riders about the movement of tax enforcers.

The taxman has learnt the trick and recruits similar informers, and in this cat-and-mouse game, smugglers on occasions lose all merchandise when the taxman is tipped in time.

Nonetheless, smuggling continues, even thrives. In any case, proceeds from the illegal trade has helped in building the key towns, including Arua City.

So, what will change, hopefully for the better, is DRC which has applied to join the East African Community is admitted as the bloc’s seventh member? 

Mr John Adriko, who plies to DRC regularly, said: “If DRC is allowed into EAC, I think movement of goods would be eased because many people use illegal routes to escape taxes because most goods coming from Congo are considered smuggled goods.”

To him, an entry of Congo into the regional bloc should result in re-categorisation of goods so that URA collect taxes on them and the government excludes others.  

Ms Mercy Anguko, a Ugandan trader who visits Congo’s Duruba township every week, said: “I hope this will give opportunity for DRC authorities to transform and remove the numerous road blocks on their roads. At each road block, you pay a lot of money and at the end, you earn little money in profit. This has discouraged people from doing business in Congo.”

The East African Community in a January 17, 2022 press release quoted DRC’s Deputy Prime Minister and Minister for Foreign Affairs, Mr Christophe Lutundula Pen’Apala, as saying his country looked forward to increased trade and investment, and strengthened relations with EAC. 

“DRC was keen on cooperating with the EAC for maximum exploitation of both natural and human resources in the region. This would be the last round of negotiations before DRC is admitted into the EAC,” he said. 

Speaking at the media briefing, the Chairperson of the EAC Council of Ministers, Mr Mohamed Adan, said the EAC and DRC negotiation teams were expected to conclude their negotiations within 10 days. 

Mr Mohamed said the report of the negotiations would be presented to the Council for onward submission to the summit of EAC Heads of State for consideration. 

“The negotiations between EAC and DRC for the admission of the latter into EAC was good news for a continent that has been performing below its potential in terms of its share of global trade,” he said. 

URA optimistic

Last week, URA Commissioner General John Musinguzi said: “We need the integration [of DRC] because we are now having cordial business with South Sudan that joined [EAC block]”.

“DRC joining EAC will help in having tax uniformity where goods will be paid for at the borders. We will also prioritise a border point with DRC at Birijaku (in Koboko) because of the enormous opportunities,” he said.

One of the pillars of EAC is the Common Market that allows free movement of goods, persons, and labour, right of establishment, right of residence, and free movement of services capital.

According to information on URA website, the EAC in December 2004 enacted the East African Community Customs Management Act 2004 (EAC-CMA) that governs the administration of the East African Customs Union including the legal, administrative issues and operations.

The tax and customs regime in DRC would, therefore, come under this arrangement if the country, one of the biggest in African and among the most mineral endowed in the world, was admitted to the regional bloc.  

At present, Congo has five tax, customs and immigration bodies: Direction Generale de Migration, which applies policies and verifies documents like visas; Direction Generale des Douanes et Accises, which collects taxes and excise payable on imports and exports; Office Congolais de Controle, which verifies the quality, quantity of all goods; Direction de la Quarantaine Intenationale, which verifies documentation and checks state of hygiene of food stuffs; and, Police des frontiers, which monitors border crossing points and combats fraud and cross-border criminality.

This plethora of enforcers has, according to testimonies by Ugandan business community, bred corruption and confusion. 

Boost to West Nile?

The 2012 Survey by Rural Initiative for Community Empowerment (RICE-WN), supported by International Alert, indicates that Arua alone has about 1,394 traders.

Seven out of every 10 of these business people are women and household heads plying small cross-border trade in DRC.

The researchers noted that women who trade between Arua and Ariwara earn profit of $ 6,101 (Shs21m) and those from Ariwara to Arua earn & $8,667 (Shs30m).

For instance, since the implementation of the East African Community (EAC) Tripartite agreement, the trade flow between Arua and Ariwara town in eastern DRC intensified.

Arua traders rake in $ 88,176 (Shs308m) per month by doing business in Ariwara while import from Ariwara to Arua are worth $35,445 (Shs124m), according to the report, showing the Ugandan city benefits more than twice from the bilateral commerce than Congo’s Ariwara. This is because the goods coming from Ariwara to Arua are mainly food stuffs, fuel, cigarettes, motorcycles, sugar, timbers, gold, clothes among others while those from Arua are manufactured products like hardware items, beer, sodas, second-hand clothing and soap.

[email protected]