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Kenya-Tanzania border trade picks after Covid-19 crisis

Kenya’s cross-border trade with Tanzania is on unprecedented upward trajectory as the economy rebounds from the devastating effects of Covid-19 pandemic with latest economic data between the two East Africa’s nations showing trade volumes in excess of Sh40 billion for the year 2021.

The East Africa Business Council (EABC) disclosed that from January to November of 2021, Kenya exported goods worth Sh40 billion to Tanzania. During the same period, the country imported goods valued at Sh50 billion from Tanzania. This is the highest traded value of goods and services between the two countries since 2018.

The Chief Executive Officer of EABC Mr. John Bosco Kalisa said the value of trade between the two counties indicated laudable resilience of the economies. This was supported by strengthened ties amongst traders in the two countries.

Kalisa noted that such a growth was enabled through commitment to make work the instruments governing the East Africa trade protocol.

“The volumes and values traded is an indicator of the true resilience of the business environment between the two countries,” he said.

The CEO was speaking on Saturday during a trade facilitation forum at the Holili One Stop Border Post (OSBP) in Tanzania.

The Principal Secretary (PS) for Kenya’s Ministry of East Africa Community (EAC) Dr. Kevin Desait chaired the forum.

Stakeholders in the regional and cross-border trade present included customs officials from both countries, clearing and forwarding agents, large-scale importers and exporters, representatives of Kenya Private Sector Alliance (KePSA) and officials of cross-border women traders from Kenya and Tanzania.

Mr. John Bosco Kalisa, CEO for East Africa Business Council, addressing stakeholders at the trade forum at Holili. Photo by Wagema Mwangi

The PS stated the main aim of having cross-border traders’ fora was to strengthen the partnerships and collaborations between EAC governments. This would enhance the creation of a conducive environment for small-scale traders who were the backbone of trade in the economic bloc.

He further pointed out that facilities like OSPB were designed to be promoters of trade by enhancing efficiency and eliminating delays in clearing of goods at the border.

He disclosed that the backbone of cross-border trade was the small-scale traders who traded in small volumes on a daily basis thereby strengthening the EAC ties at both social and economic level.

“The people and traders are the true assets in enhancing the trade ties amongst partners in the EAC. This is why the governments keep on engaging to streamline their working conditions and reviewing regulations that might create bottlenecks to smooth trading,” said the PS.

Statistics from the OSBP at Holili show a significant rise in the number of trucks being processed at the facility.  In 2018, 23, 500 trucks passed through the OSBP. This number went up in 2019 when 26,000 trucks were cleared. In 2020, the number dipped to 19,000. The drop was attributed to the stringent Covid-19 containment measures put in place by individual governments to curb the spread of the virus.

However, in 2021, the numbers recorded at the OSBP leapt to unprecedented 33,300 trucks making it the busiest year since 2017.

EABC said trade data showed resurgence in trade between Kenya and Tanzania with the balance of trade oscillating over the years. In 2018, Kenya earned Sh29 billion from her exports while paying Sh17 billion for imports. In 2019, Kenya earned Sh33 billion from exports while Tanzania got Sh27 billion.

In 2020, the values of trade fell to less than ten billion. This would however rise to over Sh40 billion in 2021.

The PS expressed more optimism on robust trade. He said that one of the most significant achievements for EAC is the inclusion of Democratic Republic of Congo (DRC) into the EAC economic bloc. He explained that DRC had a population of 200 million and was endowed with vast resources making it a major attraction to traders in partner states of EAC.

“The people are the market. DRC presents the EAC with an opportunity to trigger more business and trade that will spur economic growth in the region,” he said.

He further added that DRC is a vital link to connect EAC member states along the Indian Ocean to the Atlantic Ocean.

The PS disclosed that the bloc was working closely on refining trade tariff requirements that would allow goods and services from EAC to access Africa Free Trade Area.

While hailing the progress made in the EAC border trade, traders called for a more robust approach to trade facilitation with special preference being given to perishable goods and goods traded in small volumes.

Neema Chao, a director of Taha Fresh; a fresh-produce export company in Tanzania, said delays at the clearance were affecting the quality of produce going to the international market.

She proposed a special pass that would allow perishable goods to be processed quickly through the customs.

“We are asking for preference to be accorded to fresh produce like fruits at the OSBP. They should not be held up like maize and other non-perishable goods,” she said.

Ms. Selina Cholo, the chair of Taveta Cross-Border Traders, said artisanal traders should not be subjected to the same stringent measures given to large-scale exporters. She pointed out that her members traded in small volumes that should not attract delays.

“We are very many of us who buy and sell in small quantities. We are asking for special consideration to be allowed to access markets in both countries without hindrances,” she said.

The EABC called for merging or restructuring of some agencies at the border post that were not enhancing the efficiency of trade.

Kalisa stated that while the essence of OSPB was to streamline trade activities, some agencies had become obstacles by subjecting traders to excessive red tapes. This affected the trade adversely.

“While Kenya and Tanzania Revenue Authorities and customs agencies are easing the trade barriers, we have other agencies at OSPB that delay the clearance process. These agencies need to conform to the objective of OSPB and stop being obstacles,” he said.

The PS conceded that the traders’ concerns were legitimate and would be looked into. He said that the trade protocols governing the bloc would be rechecked to accommodate emerging realities of cross-border trade.

He also asked the EABC to hold sensitization forums for customs officials at OSBP to create awareness on Simplified Trade Regime (STR) after differences emerged in understanding on what STR entailed.

There are also plans to have a EAC Health Pass; a uniform integrated health management system for the member states to avoid double testing of traders for Covid-19 which is creating delays in trade.

By Wagema Mwangi

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