WHY NON- TRADE BARRIERS IN EAC

NTBs are often justified on four main reasons:

1. To safeguard health, safety, and security of human beings, animals and plants, and

against environmental pollution.

2. To protect home industries and consumers

3. To safeguard national security

4. To safeguard against revenue loss

3.2 Non‐Tariff Barriers to Trade in EAC

NTBs in EAC, like in any other region, result in delays and increased costs which ultimately

hinder the free movement of goods and services. Removal of NTBs is much more effective in

boosting intra‐regional trade that the method of tariff liberalisation. This is to say that,

returns in terms of welfare gains, growth, employment generation and poverty reduction

are more likely to be realised by addressing NTBs, than through tariff liberalisation.

(Odhiambo, W. 2010).

In 2005, the East African Business Council (EABC) launched a major initiative in efforts to

eliminate the existing NTBs in East Africa by commissioning the Business Climate Index

Survey (BCI). The main aim of the survey was to identify the nature and scope of NTBs that

are experienced in the day‐to‐day business within the region. Broadly, NTBs in East Africa

are rooted in a variety of causes that can be labeled as ‘structural bottlenecks’. These

include inadequate government structures/procedures; mismanagement; erratic application

of rules; and bureaucratic staff attitude coupled with low staff morale. For the private

sector, NTBs represent an additional cost factor and sometimes even lead to complete loss

of markets or customers.

Non‐Tariff Barriers on intra‐EAC trade are categorised under the following categories:

• Customs and administrative documentation procedures – Which include varying systems

for imports declaration and payment of applicable duty rates; limited customs working

hours; varying interpretations of the Rules of Origin; application of discriminatory taxes and

other charges on EAC originating imports; cumbersome procedures for verifying

containerised imports; unfair competition from counterfeit products, and diversion of

transit goods into the region.

• Immigration procedures – Which include varying application of visa fees and work

permits; cumbersome and duplicated immigration procedures, and lack of an East African

Passport by many citizens who cross borders in search of business opportunities.

• Cumbersome inspection requirements – Which include procedures on Gross Vehicle

Mass and axle load regulations, costly quality inspection procedures, cases of lack of

recognition of inspection certificates issued by accredited laboratories, cases of lack of

mutual recognition of quality certification marks and test certificates issued by EAC

Standardisation Bureaus, varying quality inspection and testing procedures which aintroduced without prior discussions and consensus and varying procedures for issuance of

export certification marks.

• Police road blocks – Which involve police officers stopping commercial vehicles at

various inter‐country road blocks and at border crossings even where there is no sufficient

proof that goods being transported are of suspicious nature.

• Varying trade regulations among the three EAC countries – The most notable one

different axle loads and different specified maximum Gross Vehicle Mass (GVM) for

commercial vehicles. Also EAC countries have varying parameters on weights, labeling, and

quality, tolerance in measurements, and technologies used in packaging, which limits ability

of goods to cross borders.

• Varying, cumbersome and costly transiting procedures in the EAC countries – Which

include varying requirements on commercial trucks used in transit traffic, bottlenecks in

offloading imports at the Port of Mombasa and Dar‐es‐Salaam Port, unrealistic grace period

on imports before application of demurrage, and application of insurance bonds even on

goods traded within the region

• Duplicated functions of agencies involved in verifying quality, quantity and dutiable

value of imports and exports – Which include numerous agencies involved in import and

export inspection, and in certifying compliance to procedures; resulting to duplication of

effort and wasted business‐time. Also, many inspection bodies have not established

laboratories at major entry and exit points.

• Business registration and licensing – Which includes Varying business registration

procedures and lack of preferential treatment to EAC originating businesses versus foreign

originating businesses, which makes cross‐border registration of business a difficult process,

cumbersome and expensive manual processes used in business names search, registration

and payment of relevant charges, multiplicity of licenses used in production, and

distribution and sale of goods, resulting to duplication and inhibitive cost of doing business

in the region. (East African Business Council)

Behind all these mentioned categories, there lies corruption. Corruption is another

important issue that has implications on the economies of the EAC member states, as well

as in affecting the trade flows. As per Walter Odhiambo (2009), the recent Transparency

International2

(Kenya) survey on corruption shows that, among the original EAC member

states (that is Kenya, Tanzania and Uganda), Kenya is the most corrupt country within EAC,

followed by Uganda and then Tanzania (Table 8 below). But with the addition of Burundi

and Rwanda, Burundi has registered the highest corruption index within EAC, followed by

Kenya, Uganda, Tanzania and Rwanda respectively. The survey as well depicts that, among

the institutions identified as being involved in corruption are the police (in all countries), the

Revenue Authorities and Customs (of which all these institutions play a great role in the

facilitation of trade in the region).

Taking into consideration that TI takes into consideration a number of variables apart from just introduced without prior discussions and consensus and varying procedures for issuance of