Theodore Murenzi’s truck ground to a halt in Rwanda. So did the business it was supposed to be doing, hauling stone and earth to feed the appetite for construction that is changing the face of East Africa.
It needed brake linings, oil and fuel filters and new clutch plates to get back on the highway and earning money. All the parts were readily available, in a warehouse in the Ugandan capital, Kampala, a couple of hundred miles away.
A few years ago that might have meant being off the road and out of action for days, even weeks, locating the parts, ordering them, paying for them, getting them cleare
d at two customs posts and delivered to his yard
in Kigali, the Rwandan capital.
But in December 2012, thanks to a systematic campaign by Rwanda to overturn the Non- Tariff Barriers (NTBs) to trade with its East African Community (EAC) Partner States, the whole process took less than 24 hours.
“I ordered them in Kampala, paid for them by Western Union, filled out a simplified declaration form, went up to the border at Katuna, paid my V.A.T. and had a cup of tea with the police there while my stuff was loaded onto another truck. The truck was back in business the next day.”
Theodore speaks not just for his own business. He is head of the Long Distance Truck Drivers Association of Rwanda, which has 4,700 members and plies the two main corridors on which landlocked Rwanda, Burundi and Uganda depend for exports through Kenya and Tanzania’s ports of Mombasa and Dar es Salaam.
The key to the ease of the operation was a simple piece of paper created to avoid small cross-border transactions getting choked in the paperwork of major cross-border commerce.
It was developed as part of a campaign, supported by TradeMark East Africa ( TMEA ), to help East African countries stop talking about NTBs and actually start removing them.
“We used to go to EAC meetings and the same list of NTBs across the region kept coming up again and again,” explains Kaliza Karuretwa, Director-General of Trade and Investment in the Rwandan Ministry of Trade and Industry. “Nothing actually happened. Nothing changed.”
“So we decided not to wait for this to happen but to make it happen. We made bilateral agreements with Uganda and Tanzania to get things changed, and in so doing, I think we became the first country among the Partner States to actually start turning NTBs over.”
TMEA helped revamp the National Monitoring Committee for the elimination of NTBs. A website was established to register complaints online and an advocacy strategy was adopted.
“We managed to get 38 NTBs dismantled since 2008 and eight domestic NTBs last year,” says Vincent Safari, the NMC coordinator. “That leaves 36 still, but some are easier to remove than others. We are making terrific progress.”
Under the bilateral agreements the threshold for clearing goods at Rwanda’s borders was raised from US$ 1,500 to between $3,000 and $4,600, depending on the border crossing. This was the procedure that put Murenzi’s truck back on the road so quickly.
The working hours of customs and other officials at the main crossings were increased from 12 to 16 hours a day, largely eliminating the need for truckers to sleep in their cabs at night.
As well, the main clearing office will soon become a 24-hour operation.
East Africa’s borders are shop windows for small traders on either side and another NTB that was removed was the need for a complex certificate of origin. This was simplified altogether by raising the threshold for the need for such a document to the equivalent of $2,000, allowing food sellers and small traders to do business without bureaucracy.
Truck drivers take such well-oiled formalities for granted in the European Economic Community (EEC), which has decades of a head start on the rest of the world in fine-tuning the bureaucracy of economic integration and smooth trade.
“It used to take 48 pieces of paper to move a truckload of paint from the Netherlands to Spain,” Deanne de Vries, of Agility Logistics told a recent Economist Unit EAC summit in Kigali. “Now, thanks to EU integration, it takes one.”
The EAC still has a long way to go to rival such ease of doing business, she said. But Rwanda is proud that it has made a big start and may even be showing other EAC Partner States how to go about it: bilateral agreements founded on solid evidence, then action.
“We know that other EA Partner States are already looking at what we have done, and wondering how they can do the same. I think we have shown the way.” Kaliza Karuretwa, Director-General of Trade and Investment, Rwanda Ministry of Trade and Industry.