Removal of Non-Tariff Barriers contributed to 20% reduction

EAC Elimination of NTB Act cited as landmark milestone supporting the progressive elimination of NTBs within the EAC, NTB Act a first in Africa.

A recently conducted independent evaluation of the Non-Tariff Barrier (NTB) to trade programs in East Africa indicate that removal of key NTB’s have contributed to a 14 per cent reduction in time taken to import goods from each East African country.

Further, it has contributed to a 20 per cent reduction in time taken to export goods from each EAC country (from 33 days to 26 days).

The independent evaluators based the report on NTBs programmes valued at US$ 7.89 million across East African Community Partner States and supported by TradeMark East Africa.

The programme had identified 112 NTB’s and had resolved 87 of those by the time of the evaluation.  NTBs present a serious challenge to trade with an EAC wide cost estimate of NTBs (2010) being approximately US$490 million. Elimination of NTB’s to trade remains priority for TMEA in reducing the costs of trade in EAC and increasing efficiency of EAC corridors.

The NTB program has not been implemented in isolation but has complemented other efforts TMEA and other development partners are undertaking to increase EAC transport and economic corridors efficiency which includes automation of services, port improvements and border development programs.

A closer examination of the report indicates that the reduction of transit transport time has led to reduction in cost of transport. NTBs reduction has contributed to the reduction in cost of transporting a 40 foot container from Mombasa to Kigali, from US$6,500 in 2011 to US$4,800.

Evaluators estimate this generated a saving (at constant volumes) of approximately US$7 million on the Mombasa-Kigali route alone. Similarly, inland transportation times from Dar es Salaam to Kigali have dropped considerably, now to 3.5 days.

Burundi tops the list of the East African countries that has witnessed the highest import reduction time – at 28 per cent (from 30 days to 43 days).

The time taken to export from Uganda has successfully reduced from nearly 35 days in 2010 to less than 30 days in 2015.

Other areas that have witnessed great progress include – Tanzania which has witnessed a 99 per cent reduction in application time (5 days to only one hour) for getting an electronic certificate of origin.

There has been significant progress in the number of NTBs that have been identified (112) and resolved (87) through the EAC Time Bound Programme on Elimination of Identified NTBs supported by TMEA – in a large part due to work undertaken by the National Monitoring Committees (NMCs) and EAC Secretariat since the onset of TMEA support in 2011.

A significant result of the NTBs programme has been the enactment of The EAC Elimination of NTB Act. The NTB Act aims to give effect to the second clause under Article 13 of the Customs Union, by establishing a legal mechanism for identifying and monitoring the removal of NTBs.

A great value of the NTB Act is the possibility for the Council of Ministers to recommend to the Summit the imposition of sanctions against a Partner State, which fails to comply with any directive, decision or recommendations of the Council. The NTB Act remains a landmark milestone in the work in support of the progressive elimination of NTBs within the EAC.

“This is a significant milestone in the growth and development of EAC. Non-Tariff Barriers remain an obstacle in growing prosperity in the EAC region. TMEA invested around US$7.89 million in the NTBs project and total programme benefit is expected to be in the range of US$35-45 million at constant trade volumes. A reduction of NTBs will invariably lead to more trade in the region, which is ultimately our goal, of growing prosperity through trade,” said Frank Matsaert, CEO, Trade Mark East Africa.

This comes at a time when elimination of Non-Tariff Barriers remains a teething challenge to not only regional trade and integration but also a subject that partner states grapple with in the quest of growing trade within the EAC bloc.

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