Posted on September, 23, 2020 at 07:50 am
TANZANIA and Rwanda have committed to address trade barriers in order to strengthen bilateral and economic ties that would ultimately enhance business and competitiveness.
According to the United Nations COMTRADE database on international trade, the two East African nations have been for many years having great trade relations that accelerated investments between the two countries.
However, despite the challenges, the records show that Rwanda imports from Tanzania were 224.54 million US dollars while Rwanda exports to Tanzania were 5.1 million US dollars last year.
Based on statistics from the United Nations COMTRADE, in the period between 2009/2015, with exception of 2012/2014, intra trade between these two countries was very low averaging about 70 Millions worth of trade flows in favour of Tanzania.
In relation to the period 2012/14, the terms of trade were in favour of Rwanda exporting on average about 200 Millions of goods to Tanzania.
After 2015, trade flows began to rise however the terms of trade were tremendously in favour of Tanzania reaching an amount equal to 224.54 US dollars’ worth of exports to Rwanda.
There is a need to stimulate production in Rwanda so as to make sure the two states attain mutual or equal share of their trade relations.
Generally, intra-trade between these two countries has been increasing since 2015 but as said above, it has been in favour of Tanzania.
The Heads of the two states at one point agreed to join hands to increase intra trade between these two states.
Calling upon private sector captains in the two states to increase their investment partnerships while the two Heads of state promising to create a conducive environment to allow increased investment and trade flows between the two countries.
Rwanda uses Tanzania as the entry and exit point for most of its imports and exports. In other words the Central Corridor is key to Rwanda as it covers a shorter distance to the sea port of Dar es Salaam compared to Mombasa port on the Northern Corridor.
To increase trade flows between the two states, the Tanzania Private Sector Foundation (TPSF) has managed to do the following in advocating for port efficiency as well as improve the central corridor competitiveness.
The TPSF Policy Exert Mr Kennedy Rwehumbiza said at the presentation that the private sector body is advocating for the amendment of EAC CMA, specifically on how customs warehousing rent is charged.
In collaboration with TATOA, TPSF has submitted a position paper intending to inform the government on the effect of CWR imposition. If this issue is addressed, the competitiveness of our port as well the central corridor will highly improve.
Also TPSF and TATOA have worked closely with the GCLA to review its tariffs on fees imposed for the transportation of chemicals and successfully in 2019 new concessionary rates for bulk cargoes through GN 581 were published.
This was a milestone for logistics industry and can be noted as one of the major successes in the removal of NTBs.
Along with reviewing fees, GCLA went further and also amended various provisions in the industrial and chemical management Act to allow for re-packaging of chemical products within Tanzania which will allow ancillary services to be performed on chemical products which were previously not allowed.
Currently, TPSF in collaboration to stakeholders in the maritime transport such as CFA and shipping agencies are advocating for amendment of the Tanzania Shipping Agency Corporation Act, of 2017(TASAC), which gives the agency exclusive mandate in shipping and CFA business.
TPSF and stakeholders have developed a position paper that intends to inform the government of the effect of TASAC on this subsector.
Additionally, the paper entails recommendations that are geared towards increasing efficiency of our Dar es Salaam port and make the central corridor attractive to Rwanda importers and exporters. Our target as the private sector is to boost trade flows between these two countries.
The Foundation has been also advocating on the amendment to extend the period of charging Value Added Tax (VAT) on auxiliary transport services for transit goods (2020-21Finance Act).
Among the recorded Rwanda imports from Tanzania in 2019 are Salt, sulphur, earth, stone, plaster, lime and cement, Cereals, Edible vegetables, certain roots and tubers.
Others were mineral fuels, oils, distillation products oil seed oleagic fruits, grain, seed, fruits, Ceramic products, Fish, crustaceans, molluscs, aquatics invertebrates, Iron and steel, Beverages, spirits and vinegar, textile articles- sets and worn clothing.
Rwanda exports to Tanzania last year included electrical, electronic equipment, mineral fuels, oils, distillation products.
Residues, wastes of food industry, animal fodder, Machinery, nuclear reactors, boilers, Miscellaneous edible preparations, Furniture, lighting signs, prefabricated buildings, Optical, photo, technical, medical apparatus, Glass and glassware, Plastics, vehicles other than railway, tramway.
According to TPSF, there are areas of possible collaboration between the countries, including working closely with the Rwandan Private sector Federation to revamp peer to peer dialogues so as to address various bottlenecks on trade.
He further presented that on the other hand, Tanzanians business persons are also facing numerous trading barriers, including refusal of Rwanda to accept Covid-19 test certificates from Tanzania.
Truck drivers are also not allowed to cross Rwanda border, hence required to off load cargos at the border, the causes that delay and increase cost and time of doing business (lift on and lift off).
Despite the agreement between the countries, there are still challenges to facilitate transit of perishable, petroleum and transit goods via Rwanda.
According to TPSF, there is also a delay in payments from Rwandese clients and clearing and Forwarding Agents (through a joint venture under- since EAC - single Customs Territory), a lot of pending cases.
Responding, the High Commissioner proposed for the meeting at the end of this month, to discuss and address various bottlenecks on trade, facing the countries.
“I see the meeting is of very importance and should take place in these few coming days, involving Private Federations of both sides and other stakeholders, mostly investors.”
Mr Rwehumbiza stressed that all port, transit and borders’ trading barriers would be addressed through putting all stakeholders together; for them to have exposing challenges they face and letting the authorities of both countries seek immediate and long-lasting solutions.
There is also a need for time-to-time training to develop service providers’ capacity so as to enhance their skills, hence, smoothing the services, he further advised.
Questioned on what measures have been taken by Rwanda to improve the in-trading environments, the High Commissioner responded that making Rwanda zero corruption tolerance is among the factors.
The country has been also setting the rights laws that protect investors as well as easing service delivery through introduction and effectively running one-stop-centres.
TPSF Acting Director, Mr Zachy Mbenna commented smoothing investment environments would promote trading opportunities in both countries as each one has something important to export to another.
“The meeting therefore is of most importance, and we will do all we can to make sure that it takes place within this month. The first round will be a video conference and the second one will be face-to-face and will take place at Rwanda-Tanzania Rusumo Border,” he said.
Source: Daily News