DOING BUSINESS ALONG THE NOTHERN CORRIDOR : NTBs AND OTHER CHALLENGES

José MacielDirector, Trade Facilitation (Non-Transport)

TradeMark East Africa20th November 2012

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THE NORTHERN CORRIDOR

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THE NORTHERN CORRIDOR

• Within EAC, the corridor begins at Mombasa port to Bujumbura via Uganda and Rwanda, covering 1,970 kilometres

• Outside EAC, connects to South Sudan, Democratic Republic of Congo, and Ethiopia

• On average 600 trucks use the corridor daily

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DOING BUSINESS ALONG THE NORTHERN CORRIDOR: NTBs

1. Behind-the borderA. Police road-blocks

a) Kenya: 24 (Business Climate Index Survey, 2011)b) Uganda: 21c) Burundi: 4d) Rwanda: 2

B. Weigh-bridges (1-3 hours spent on each weighbridge): a) Kenya: 12 weighbridgesb) Uganda: 5c) Rwanda: 2

C. Corruption

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DOING BUSINESS ALONG THE NORTHERN CORRIDOR: NTBs

2. At the BorderA. Lack of mutual recognition of standards

marks and retesting of goods; additional time to reach the market and costs associated with retesting goods

B. Multiplicity of regulatory bodies; NSBs, SPS authorities

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NTBs – Impact Study EAC & COMESA, 2009

• On average, NTBs added >5% to landed cost of goods.• On average 20% of annual shipments faced some

form of NTBs. For some companies it was 100%.• Average direct additional cost of NTBs per shipment

was US$3,500 – excluding bribes!• It was often taking an average of 6 days to clear goods

through Customs.• Average cost of border delays (where experienced)

was 11% of landed cost• Companies spend approx US$145,000 per month on

employees time and accommodation costs due to NTBs and delays.

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NTBs: TMEA INTERVENTIONS

1. Legally binding mechanism with possibility of sanctions: draft law with the EAC now

2. Bilateral negotiations3. Survey of NTBs along Northern Corridor

(Mombasa-Kigali) for production of a documentary film

4. Strengthening NMCs5. Online monitoring system6. Regional harmonization of standards7. EACQIS7

Asanteni Sana!

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