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Covid testing: Non-tariff barrier killing EAC trade

An aerial view of trucks queuing at the Malaba border. [Mumo Munuve, Standard]

Multiple barriers continue to stand in the way of Kenya and Tanzania fully exploiting the potential for cross-border trade between the two countries.

While relations have eased and trade picked up following a meeting between the countries' presidents in 2020, businesses say the movement of goods and people remains restricted by what they term unnecessary requirements.

The latest of these barriers that has significantly slowed clearance of cargo and people at the border posts is Covid-19 testing.

“In view of the Covid-19 pandemic, the business community is facing challenges in relation to unharmonised Covid-19 testing charges, and the validity as well as mutual recognition of Covid-19 certificates,” said a brief on regional trade by the East African Business Council (EABC).

It is not just the Namanga border where Covid-19 testing is increasingly adding to the time that truckers take to clear at the border. Businesses trading across the Kenya and Uganda border have been experiencing a similar challenge in the recent past.

In mid-January, the road to Malaba was at a standstill as thousands of truck drivers awaited their turn to clear at the border. The Covid-19 testing was blamed for taking much of the time needed to clear.

The traffic snarl-up, which lasted for weeks and stretched for kilometres, resulted in essential products failing to reach the Ugandan market on time. These included fuel, with Uganda importing most of its petroleum products through Kenya.

The country experienced a major fuel shortage in January and with the prices unregulated, the oil marketing companies which still had the product increased retail prices to well over Sh200 per litre of super petrol from about Sh143 per litre earlier.

Covid-19 tests are in addition to other challenges that businesses have always cited as making regional trade costly and slow.

These include lack of mutual recognition of product standards, system failures leading to delay in issuance of clearance documents, multiple roadblocks on both sides and cargo scanner failures leading to cargo trucks traffic jams.

Freight companies urged for the separation of the Import Declaration Form (IDF) from the Integrated Customs Management System (ICMS) of Kenya and the setting up of a permanent cargo scanner at the border to facilitate trade.

Kenya International Freight and Warehousing Association Chairman Daniel Wainaina said the clearing cost of cargo on the Kenya side has increased by 70 per cent due to multiple processes and departments.

He said that for a 20-tonne truck, the clearing cost is approximately $200 (Sh22,730), resulting in uncompetitiveness.

EABC noted that the region had started to show signs of recovery from Covid-19, going by the uptick in trade.

Trade between Kenya and Tanzania particularly posted major growth to hit Sh90.6 billion for the period between January and November 2021, according to the Central Bank of Kenya.

This was a 57 per cent increase compared to Sh57.5 billion in 2020.

“The economies of the EAC partner states had manifested resilience to the Covid-19 and are recovering from effected of the pandemic," said EABC Chief Executive John Bosco Kalisa.

"Tanzania exports to Kenya have been increasing with Tanzania registering favourable balance of trade with Kenya.”

Kenya has traditionally dominated trade between the two countries but Tanzania tipped the scales last year, with trade between the two countries being in its favour.

The country doubled the value of exports to Kenya to Sh50.16 billion over the period between January and November 2021 compared to exports worth Sh26.16 billion in the year to December 2020.

Kenya, on the other hand, exported goods worth Sh40 billion to its southern neighbour between January and November 2021, also an increase compared to exports of Sh31.29 billion in 2020.

the station manager of Namanga One-Stop Border Post Kenya said signs of increased trade included the facility clearing 250 trucks daily, a three-fold increase compared to May last year.

Covid 19 Time Series

 

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