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Breaking News

Improve Domestic Trade to harness Cross-Border Achievements

Ezra-RubandaThe last two business years have witnessed a couple of initiatives geared at improving cross- border business.

Indeed, concerted efforts of EAC regional government, member states, the private sector and development partners have yielded some achievements to reckon with.

Improvement on inland port facility and Mombasa port as well as accessing cheaper alternative route through Dar es salaam has since 2011 reduced average freight costs by sh 112,043  per tonne in northern corridor and sh. 750,800 per tonne in central corridor.

Midlevel assessment of One Stop Border Post pilot (OSBP) project at Kabanga – Kobero reveals a fundamental time saving from 24 to 2 hours of border clearance. Use of advanced electronic customs system has enhanced cross- border safety and transit truck monitoring.  Subsequently, according to URA Truck transit time from Mombasa to Kampala has reduced from 21days to 6 days

Once the anticipated post pilot 13 OSBPs funded by Trademarks East Africa (TMEA) come to completion, crossing time cost is projected to drop by 30 percent.

Strict supervision and professionalizing of staff is gradually eroding the hitherto vice of deliberate delays and complicating of procedures on intent to attract illegitimate payments from disparate cross- border traders.

Subsequently EAC cross-border trade is growing on an average of 14 %.  Thanks to integration efforts and TMEA funding.

However the fear is, to a retail storekeeper at Kijujubwa trading center deep in Masindi District upon listening to such cross- border story would just say thanks and wait to reproduce the ‘hear-say’ tale to his drink pot pals. Truth be propagated, the retailer has no business feel yet.

The pace of cross-border business growth is not matching with intra country domestic trade. Systematic and broader business analysis needs to view business barriers beyond Non- Tariff Barriers in the export- import chain.

Saving time and reducing cost of transportation is not just arrival to capital cities. Enjoying Business is not how much is in stock but how fast each individual in the product chain will realize their return to effort and value for money. For instance it is less astonishing that, ‘goods on order’ transported for 6 days from Mombasa to Kampala   is most likely to take 11 more days before reaching a retailer in Mukono town.

Some example, If a truck approaches Kampala by Jinja road after 8; 00 am it is likely to park at lower Bweyogerere until 10; 00 pm to be able enter Kikubo. In kikubo where offloading can only be done by human beings (kanyamas), is preferably during the day. It will start at 7; 00 am and end anytime of convenience since the track has to station until late night to negotiate its way out. If the container is a co- hired, then it will move to 1 to 3 other business stores. Good practice in transport co-carriage is that when deliveries are made to first destination, one should not unwrap until other cargo deliveries are made and certified by all. By this level 3 to 4 days are already spent.  Internally there has to be some sorting, assembling and stocktaking processes most likely to take some 3 to 4 other days.

In such instance, strategic efforts need to focus on establishing business terminals that are functional 24 hours with easy access and departure linkages to all upcountry townships. Well facilitated business hubs at the 5 entry points into Kampala will not only decongest the city but will create niche market centers of products from greater hinterland these routes serve.

In the government setting, business voice and representation dwindle out as the local governance structure draws down to village level. Who represents the voice of the business community in the local system structure now that vision 2040 hinges on private sector led economy? Lack of appropriate representation at such policy and legislative functions could explain the current key infrastructure facilities like electricity and rural roads allocations that are skewed more to political connation than business growth.

Just to illustrate, the first question by a police man on any Uganda highway to a loaded lorry driver is 97% more likely to be about driving permit or road license, than if the transit was safe.  Police should be more enabling than penalltive.

By the way ask, a reverse question; how long does it take a truck carrying tea from Fortpotal to Mombasa, -is it also 6 days? Expounding question; how about rice crossing from Karagwe in Tanzania to Masaka? Intriguing question; why is it smoother driving to Jinja and so bumpy on the way back?

The bottom line principle for international and regional trade is always clear; aspire for exports to exceed imports. Let’s embrace it in all domestic business efforts and re-sight it again and again in celebration of cross- border achievements.

 

 

Ezra Rubanda

Head of Policy, Trade & Advocacy

Uganda National Chamber of Commerce & Industry

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