WTO-SYMPOSIUM ON TRADE FACILITATION FOR AFRICAN COUNTRIES 13th-15th Nairobi, Kenya “Best Practices in TF” By James S. Kuleiye East African Community Secretariat

Scope : Introduction to EAC: Quick Facts about EAC, EAC Treaty EAC Customs Union: Objectives and legal instruments Regional Trade Facilitation initiatives Comparative TF Indicators Challenges of TF in the EAC

East African Community

Quick Facts about EAC Indicators BR KE RW TZ UG EAC 8.4 40.5 10.6 44.8 Population (in mill) 8.4 40.5 10.6 44.8 33.4 137.8 GDP per capita (2010) in current US $ 192 795 530 524 509 576 Total Imports (2009) mill.$ 345 10,202 1,112 6,531 4,247 22,437 Total Exports (2009) mil. $ 113 4,463 261 2,982 1,568 9,387 Share of total EAC imports, 2009 2% 45% 5% 29% 19% Share of total EAC Exports, 2009 1% 48% 3% 32% 17% Source: World Bank: “World Development Indicators” (data base accessed June 2012)

EAC Treaty The Treaty for the Establishment of the East African Community, was signed on 30 November 1999 and came into force on 7 July 2000, with membership being: United Republic of Tanzania, Republic of Kenya and Republic of Uganda. Burundi and Rwanda joined the Community on July 1, 2007 The Broad objective of the Community shall be to develop policies aimed at widening and deepening cooperation among Partner States in the political economic, social research and technology,defence, security and legal and judicial affairs, for the their mutual benefit.

EAC’s journey…..Art 5(2) Partner States undertook to establish: Customs Union 2005 Common Market 2010 Monetary Union 2012 ??? Political Federation ? Customs Union 2005 Common Market 2010 Monetary Union 2012 Political Federation ?

EAC Customs Union Established under Article 75 of The EAC Treaty. the entry point to economic integration process concluded and signed in March 2004 Ratified in December 2004 Commenced 1st January 2005 progressive in the course of transitional period of Five years which ended in 2009 A decision on the Single Customs Territory was made by the Summit in 2010 and process is going on!

Objectives of the EAC CU Further liberalisation of intra-regional trade in goods. Promotion of efficiency in production within the Community; Enhancement of domestic, cross-border and foreign investment in the Community; and Promotion of economic development and diversification in industrialisation in the Community.

Trade Facilitation …. (Art.6 & 7) Under the CU, Partner States agreed to initiate trade facilitation by: Reducing the number and volume of documentation Adopt common standards of trade documentation and procedures Ensure adequate co-ordination and facilitation of trade and transport activities Review procedures adopted in international trade and transport facilitation in order to simplify and adopt them in the EAC

Cont……. Collect and disseminate information on trade and trade documentation Promoting and development and adoption of common solutions to problems in trade facilitation Establishing joint training programmes

Regional Initiatives on TF Adoption of the regional of customs laws and regulations since 2004 which are applied uniformly. The CMA contained a number of TF measures. Development and adoption of the harmonised EAC customs procedures with reduced and standardised customs forms, to ensure standard practices. C17A for ASCUDA and C17B for SIMBA

Cont.... Interconnectivity of customs systems Project being funded by ADB to build on the RADDEX Project. Sharing experience on Reforms and Modernisation through the Committee on Customs. Application of risk management in customs operations Partial Application of the Authorised Economic Operators scheme (AEO) which is being scaled up to the regional level under the WCO-EAC Project

Cont..... Establishment of One Stop Border Posts (OSBP) to reduce delays in clearance of goods at border posts as part of the IBM Strategy. The OSBP Bill has been finalised and is to be tabled in the Regional Parliament (EALA). Programmes to enhance integrity and fight corruption in customs- a regional framework of cooperation on customs integrity matters in line with WCO’s Arusha Declaration has been developed.

Cont…. Harmonization of Business Hours and attempt to operate on 24 hours in some borders stations Strengthen the NTB’s monitoring mechanisms in each Partner State: Program on elimination of NTB is implemented and coordinated by EAC. The Regional Law to address NTB is being developed. Use of the EAC Passport to facilitate ease cross borders movement . Time Release Study- to measure the bottlenecks in the supply chain and to develop measures to addressed them.

Cont… Strengthen the mutual recognition of harmonized EAC Standards certificates. Harmonization of Transport regulations and standards (weighbridges, axle loads etc) to reduce delays and cost of doing the business. The Load Control Bill has been finalized and is waiting enactment by EALA. Consolidation of the gains recorded in the EAC-COMESA-SADC TF negotiations (trade documents and procedures)

Comparative TF indicators: Logistics performance index scores Burundi Kenya Rwanda Tanzania Uganda Benin Singapore Efficiency of Customs Procedures 1 ( worst) to 5 (best) 1.67 2.08 2.27 2.65 2.82 2.59 4.13 Percentage of Cargo inspected 60% 25% n/a 35%+ 11% 1% Documents needed for imports 10 7 8 6 9 4 Docs for Exports Days to import 54 24 31 34 32 Days for exports 35 26 29 18 37 30 5 Source: World Bank “ Logistics Performance Index” 2010-12 and World Bank Doing Business Report 2012

What does the tables tell us… Each PS faces unique challenges in improving its trade and Transport facilitation. EAC requires large number of trade documentation Low level of the application of Risk based inspections systems hence high level of inspection of imported goods. Take off from the Port ….very slow due to cumbersome procedures, poor infrastructure and insufficient equipment!

Survey of WTOs TF A quick survey conducted by EAC on WTO’s TF measures under negotiations suggests that Partner States are implementing some of the elements of TF at different paces. Some measures like advance rulings, requires both Policy and legal framework Capacity Building is needed to consolidate some of the existing TF measures such as Risk Management, AEO and Post Clearance Audit (PCA).

But We still have a lot of work to do! Consolidation and develop Regional trade facilitation instruments based on the WTO’s TF measures. Harmonization of Customs and non customs procedures though an integrated Border Management framework. Finalize the interconnectivity of Customs Systems from RADDEX to a more vibrant and integrated systems Development of legal framework to address NTBs across the supply chain that will impose sanctions and penalties. Fully employment of Risk Based Management System in Customs Process

Cont…. Implementation of SAFE framework of Standards under WCO-EAC Project Develop mechanism for implementation of the Single Customs Territory! [Revenue Management, Free Circulation of Goods and Legal and Institutional Framework of the SCT] Accelerating trade and transport facilitation in Infrastructure ……supply side constraints! Investment in infrastructure is key to unlock the potential of the EAC!!

But we have our own challenges 22

TRUCK “GUIDED” BY RUTTING ……. and at considerable cost TRUCK “GUIDED” BY RUTTING 23

…. With devastating consequences 25

Thank you for your attention