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Single Customs Territory to save traders Rwf45bn

Friday November 15 2013
trade

Trucks await clearance at Katuna along the Rwanda-Uganda border. Photo/File

Rwandan traders could save up to Rwf45 billion annually as clearing fees drop following speedy delivery of transit cargo from Mombasa port to Kigali.

The Single Customs Territory (SCT) has come into force after the 'Coalition of the Willing' — Rwanda, Kenya and Uganda — signed a tripartite deal to speed up movement of goods along the Northern Corridor.

The agreement was signed in the wake of a report on Northern Corridor, which revealed that the East African Community has the second highest freight logistics costs in the world, accounting for about 42 per cent of the total value of imports.

READ: EA’s Single Customs Territory system goes live in October

However, Customs agents estimate that cargo clearing costs could drop by 50 per cent driven by the expected scraping of transit bond fees along the corridor.

They observed that importers have been spending at least Rwf235,000 on transit cargo bonds along the corridor.

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In total, they have been paying at least Rwf67,000 to Customs offices in Uganda, an equal amount in Kenya and over Rwf100,000 to Rwanda Revenue Authority as transit bond.

It is estimated that over 200,000 twenty-feet containers destined to Rwanda and Ugandan are cleared annually at the port of Mombasa.

According to government and clearing agents, cargo that used to take 22 days on the road from Mombasa to Kigali is expected to be delivered in eight days.

The region has put in place measured to remove weighbridges, roadblocks, the lengthy Customs procedures and documentation.

“Since we started our electronic single windows, we have received a number of consignments cleared by both Uganda and Rwanda from the port of Mombasa.” said Richard Tusabe, deputy Commissioner General in charge of Customs at Rwanda Revenue Authority.

“At least 68 containers arrival manifests were received electronically from Mombasa and allowed clearance of goods, paid duties of Rwf47 million. In Uganda, 123 trucks have been cleared using the facility,” said Mr Tusabe.

When the region fully adopts the electronic cargo trucking system, transporters said, importation costs are likely to drop probably by 10 per cent.

“The fee is expected to reduce. The importers will only be required to pay the professional commissions. This will bring down the consignment clearing costs by 50 per cent,” said Sabin Ineza, managing partner at Smart Clearing Agency.

The electronic system will also check delays caused by repetitive checks and robberies along the corridors, to eliminate the physical escort of goods.

Turn-around time

The system has improved the turn-around times. Besides, incidences of dumping and diverting of cargo will be checked, to make it safer to transport through the corridor.

The region has interfaced their IT systems to be able to operationalise the SCT.

With the SCT, importers are able to declare and pay duties and taxes at Rwanda Revenue Authority Customs Department, using local banks. Customs sends a message to Kenya Ports Authority and Kenya Revenue Authority to release the goods.

Once the goods reach the borders of Malaba and Gatuna, they are not checked to save time and losses.