Trade within East Africa is expected to receive a boost as new plans are underway to bring in Rwanda, Burundi and South Sudan into a regional payments structure, as Tanzania pushes for a cargo clearing system for the Central Corridor.

Currently, the East African Payments System (EAPS) is operational in Kenya, Uganda and Tanzania.

The expansion of the payments system is one of three initiatives announced this week that will open up regional economies for trade between each other, and ease the cost of doing business in the region.

The payments system, aimed at accelerating funds transfer and transactions across the region, was officially unveiled on May 16 in Nairobi by central bank governors and officials of the regional trading bloc, but it went live on November 25, 2013 for testing.

Also, Tanzania and Burundi are following in the footsteps of Kenya, Uganda and Rwanda in launching the Single Customs Territory (SCT) from July 1, which is expected to open up trade through the Central Corridor.

Meanwhile, Kenya, Uganda and Rwanda have announced that steel, edible oils, confectioneries and milk would be added to the list of goods cleared under the new arrangement, allowing for joint collection of Customs dues in the region. Cement, cigarettes and neutral spirits were the first products to be handled under the SCT, which took effect on April 1.

The additional range of products covered under the SCT scheme will benefit big Kenyan firms such as Bidco Oil, Brookside Dairies and Devki Steel Mills, which have a presence in the regional market. Steel, cement and edible oil are among the most heavily traded products in the bloc.

“This is a positive step because it will help improve competitiveness in terms of more efficient trade logistics,” said Narendra Raval, managing director of Devki Steel Mills.

Additional goods

The Kenya Revenue Authority Commissioner of Customs Services, Beatrice Memo, said exports of the additional four products were being processed under the SCT system since May 19, raising hopes of improved flow of goods and curbing of dumping. Ms Memo, however, warned that shipment of all products covered under the SCT scheme would only be done using specialised trucks.

“Only trucks fitted with ECTs (electronic cargo tracking systems) shall be allowed to transport exports cleared under the SCT procedure,” she said.

The ECT system enables the owners of transit goods as well as the KRA to track the movement of goods in real time via a computer, once they have been collected from the port of Mombasa or from the point at which they were loaded for export.

The system is also expected to curb losses. Governments have been losing money as transit goods on which duty had not been charged were being diverted into the country. Some cargo owners have also lost goods or received their cargo with broken seals.

Source: The East African

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