Rwanda Strategizes to Eliminate NTBs to Lower Cost of Doing Business

Non Tariff Barriers (NTBs) are hinderences to Trade that are not linked to tariffs (taxes). They manifest in different ways. They can be administrative—meaning the way trade facilitators go about their routines—can be a barrier to business (e.g. Bureacratic procedures causing delays in service delivery, poor infrastructure, corruption , Or it can be Regulatory—meaning unfreindly trade laws, policies, strategies and regulations.

Monitoring the elimination of NTBs is done at national and regional levels. It iinvolves monitoring the (NTBs) along the Northern Trade Corridor (Bujumbura-Kigali-Kampala-Nairobi-Mombassa which is over 1800kms and the Central Corridor (Bujumbura-Kigali-Dodoma-Dar el Salaam which is over 1700kms from Kigali.

Why is it important to eliminate NTBs anyway?

Rwanda is landlocked country and highly rely on the Ports of Mombassa and Dar el Salaam for her Imports and Exports. Therefore, both the efficiency and cost of trade facilitaion along both corridors have a direct impact on the cost of doing business. And, for Rwand to be a condusive place to invest, the cost of doing business must be lower than it is today. Being perfect at fighting corruption and promoting investment opportunities cannot  deliver the “safe heaven for investments” that the region, Rwanda in particular, crave for.

Numerous studies show  that the high cost of doing business in the region is largely attributed to the multitudes of NTBs along both corridors. This confirms an unfortunate  situation that: It is cheaper to transport commodities within the developed world of Europe and Aisa than it is in poor African economies. For instance, transporting a 40ft container from Mombasa to Kigali costs over US$4500, as reported by World Bank. Yet, shipping the same container from (the farther) Asia, Europe or USA to the the Port of either Mombasa or Dar el Salaam is only between US$1500-US$2500.

Findings indicate that what importers and exporters actually do is to factor in all NTBs-related costs in the final consumer prices. This points to fact that Rwanda, as generally regarded, is  one of the most expensive in the EAC.  Remember (Rwanda) is mass importer.

The real story or experience (of NTBs) is better told by Truckers and Traders who ply these trade routes day-in-day-out.

Thus, it is in the interest of Rwanda, a landlocked, to aggressively fight NTBs if she is to remain competitive and more importantly; attract more investments.

It  is against this background that the Minisry of Trade and Industry (MINICOM) and Private Sector Federation, with support of Trade Mark East Africa (TMEA) developed a National Strategy to Eliminate NTBs back in September 2011. A year down the lane, we take stock of the evolvements in the implementation of the Strategy—discussing the gaps and progress made thus far.

Over the last 5 years, numerous studies have confirmed that Non Tariff Barriers (NTBs) act as the major hinderence to the prosperity of regional trade.

At policy level, there is committment to eliminate NTBs as evidenced in the EAC Protocol, where Article 13(1) stipulates that member countries must agree to eliminate NTBs and not to impose new ones. And, Article 13(2) which provides that Partner States shall formulate a mechanism to identify and eliminate such NTBs.

Based on Article 13 (2) of the EAC Protocol, the National Monitoring Committees (NMCs) were established in the five member states, responsible for expediting the elimination of NTBs as guided by the EAC Time-bound Implementation Programme.

On NMC (Committee) all relevant institutions in eliminating NTBs are representated, including Government (Public Sector Organisations-PSOs), Private Sector Organisations (PSOs), Civil Society Organisations (CSOs). The Trdae and Industry Ministry (MINICOM) serves as the lead Ministry in fostering the activities of NMC. The National Coordinator of Rwanda NMC is housed at and is monitored by MINICOM.

The main role of NMC Coordinator is to implement a Time-Bound Program to eliminate NTBs. Among the NTBs (addressed in the Time Bound Program) that have to be eliminated include; Harmonization of Regulations and Standards on Testing (mainly export products), Elimination of most Weighbridges (leave only 2—at border point of entry and exit): These arem fertile sources for Delays and Bribes/corruption, Interfacing of Customs Clearence Systems—through the One Border Stop Program (OBSP)—to simplify and fasten customs clearence, Harmonizing Port Proceudures and Fees: Mombassa, and Dar el Salaam, Harmonizing Working Hours at Border Posts (Open all Border Posts 24hours), and Eliminate corruption along central corridor and northern corridor among many others.

September 2011 saw Rwanda launching a National Strategy for Eliminating NTBs aimed at addressing the critical issue of low capacity of the national institutions, private sector and other stakeholders in Rwanda for effective elimination of NTBs.

It is well documented that the functioning of these EAC NMCs has not been very effective in the national or regional context and the list of main NTBs registered in Time Bound Programme for Elimination of NTBs, has not recorded much progress since Rwanda joined the EAC in 2007.

The main reasons for the lack of progress in the NMC’s work have been the lack of authority, coordination, structure and resources, lack of analytical capacity to address priority NTBs in a meaningful way, insufficient representation and contribution of the private sector to its operations, insuffi cient regional cooperation between the NMCs and lack of a strategic planning approach to monitoring and elimination NTBs.

Thus, the aim of the Strategy is to strengthen Rwanda NMC, enabling it to become the driving force of the NTB elimination process at the national and regional level.

The Strategy is built around three strategic outcomes, each contributing to important capacity issues and processes in the NTBs monitoring and elimination. These include; building the institutional and organizational capacity of NMC, strengthening the advocacy function for removal of NTBs and initiation and support the government to actively and efficiently engage in bilateral and multilateral negotiation on NTBs removal.

Trade Mark East Africa (TMEA) is the lead supporter of the implementation process of the Rwanda Strategy  on Elimination of NTBs.

Capital Talk, your favourite weekly business talkshow brings you four important personalities; Mr. Safari Vicent, National Coordinator National Monitoring Committee (NMC) on Non Tariff Barriers, Dr. James  Ndahiro, Member of Parliament East Africa Legislative Assembly (EALA), John Bosco Kalisa, Senior Programs Manager, Trade Mark East Africa (TMEA) and Mr. Hannington Namara, CEO Private Sector Federation (PSF) to discuss the progress and gaps in implementing the National Strategy on Eliminating NTBs.

Tune in 87.6fm Radio 10 this suturday, 12:30-2pm to follow the debate. You can follow and participate through Live Streaming: www.radio10.rw,  Facebook: hoperwanda, capital talk/radio10,  Twitter: #capitaltalkrwanda/mansurkakimba,   SMS:   3010 or 123 or Call in directly : 3010.