How to boost trade between Tanzania-Rwanda

The latest statistics show that Tanzania-Rwanda’s total bilateral trade has hit $274.6m calling for action to further address barriers that are still in existence to boost the free movement of goods and people between the two countries, the East African Business Council (EABC) has stated.

This was said last week during the public-private dialogue that gathered officials from the Ministry of EAC Foreign Affairs, Ministry of Trade and Industrialization, trade facilitation agencies, importers, exporters, transporters & freight forwarders, and women cross-border traders at Rusumo One-Stop Border Post.

The dialogue was organized by The East Africa Business Council (EABC)-the regional apex body of Private Sector associations and corporates in East Africa and Trade Mark East Africa (TMEA) to assess challenges being faced by cross-border traders.

“Prior to Covid-19, Rusumo One-Stop Border Post used to clear 400 trucks daily,” The East African Business Council (EABC) CEO, John Bosco Kalisa said.

Tanzania’s exports of goods to Rwanda have hit $269.6million while Rwanda’s exports to Tanzania have reached $5 million according to the International Trade Centre.

Kalisa urged the United Republic of Tanzania to fast-track the use of national identity cards as a travel document to ease the movement of cross-border traders across the East African Community region.

“Travelers and business people from Rwanda to Tanzania are required to have passports and laissez-passer as travel documents. Tanzania doesn’t accept national identity cards like other EAC members. This is still a barrier to the free movement of goods and people in the region,” he said, adding it is contrary to common market protocol.

The EAC Common Market Protocol was signed by the five East African Community Heads of State on the 20th November 2009 to ensure free movement of goods, people, services, labor and capital, use of a single currency for daily transactions within the Common Market, form political federation as well as the customs union.

The main objective of the Common Market Protocol is to accelerate economic development and foster social ties of the East African citizenry through the elimination of barriers to regional trade and movement of East African nationals.

Besides using IDs as travel documents when moving within EAC territory, the protocol also stipulates that an East African citizen must be able to stay in a member state without being his/her own for up to 6 months without requiring a work permit or visa.

If national identity cards are used for traveling to Tanzania, Kalisa said, it could boost trade between Rwanda and Tanzania and other countries.

Kalisa stated that Rusumo One-Stop Border Post that connects Rwanda and Tanzania is also an important gateway to the Democratic Republic of Congo which is also seeking to become a member of EAC.

Issue of single tourist Visa

Kalisa also urged Tanzania to adopt the EAC Single Tourist Visa to lure more tourists into the EAC bloc.

The Visa boosts the free movement of goods and people in the region and is meant to reduce bureaucracies involved in getting multiple visas.

Tourists can visit any member country of the East African Community (EAC) using one VISA.

However, Kalisa said that Tanzania and Burundi have not yet adopted Single Tourist Visa.

“We urge these countries to remove such barriers to boost trade and tourism in the region,” he said.

Tourism contributed to the Gross Domestic Product of the EAC Partner States by an average of 8.8 per cent in 2017.

The percentage contribution was higher than the average in Rwanda (12.7 per cent), Kenya (9.7 per cent), and Tanzania (9.0 percent).

Tourism contributes an average of 18.8 per cent to EAC total exports, although the percentage contribution was higher, in Rwanda (30.5 percent) and Tanzania (26 percent).

One network area

The other issue that needs to be addressed is the adoption of one network area– an initiative that establishes borderless mobile network coverage across the EAC region and treats subscribers moving between the EAC member states as local subscribers that can make and receive calls at standard local call rates.

“When you come from Rwanda and reach Tanzania, it is very expensive to call someone in Rwanda when you are in Tanzania because Tanzania has not yet joined the One Area Network. This is a challenge to cross-border traders between Rwanda and Tanzania,” he said.

It requires about Rwf1,000 per minute to call a person in Rwanda when you are in  Tanzania using a Rwandan Sim card.

According to Alex Mutamba- Senior Officer in charge of EAC and Eastern Africa Region desk at Ministry of Foreign Affairs Cooperation and East African Community said that every year barriers are recorded despite the common market protocol.

“There is a slow pace in harmonization of domestic laws in the East African Community, charges of Visa and work permits for EAC citizens and persistent non-tariff barriers. Members have to work together to address the barriers that impede trade flows,” he said.

James Tayebwa, CBT Policy Specialist from the Ministry of Trade and Industry Rwanda said that Tanzania and Rwanda signed MoUs on the promotion of cross-border trade and elimination of NTBs and invited traders to take part in the upcoming joint border committee to discuss and formulate a concrete action plan on MoU.

Happiness Ruangisa,  Chargé d’Affaires a.i at Tanzania High Commission to Rwanda said that Covid-19 disrupted global supply chains hence the need to facilitate intra-EAC trade amid the pandemic for the resilience of our economies.

She said the issue of using national identity cards as travel documents for people going to Tanzania, Single Tourism Visa, and One Network area is still being discussed at a high level in Tanzania.

Charles Omusana, Principal Economist from the EAC Secretariat added, “Improving trade facilitation is key to catalyzing the EAC Common Market and Customs Union.”

Traders’ wishes

Besides the request to comply with common market protocol, traders have said there are other challenges that need to be addressed to boost trade in the region.

Editha Paschal, Board Member of Tanzania Women Chambers of Commerce in Tanzania urged the Government to enable cross-border women to acquire equipment to reduce post-harvest losses, access affordable loans from East African Development Bank, roll out sensitization on product standards, and establish child-day care services near the border.

Rusumo border is currently open for truck drivers and cargo-only and truck drivers have appealed to the Government of Rwanda to stop the mandatory Covid-19 rapid re-testing for drivers entering Rwanda via the border.

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