EA business lobby criticises Tanzania’s rules

Saturday July 20 2013

Workers load export products onto a ship destined for Tanzania from Kisumu pier. EABC says Tanzania continues to enforce disguised policies to protect its domestic industries from regional competition. Photo/FILE

Workers load export products onto a ship destined for Tanzania from Kisumu pier. EABC says Tanzania continues to enforce disguised policies to protect its domestic industries from regional competition. Photo/FILE Nation Media Group

By ADAM IHUCHA Special Correspondent

The East African Business Council has put Tanzania in the dock, accusing it of retaining protectionist business regulations in the region, which hinder intra-regional trade.

The business lobby said Tanzania continues to enforce disguised policies to protect its domestic industries from regional competition.

The lobby accused Tanzania Food and Drugs Authority (TFDA), Tanzania Revenue Authority (TRA) and Tanzania Bureau of Standards (TBS) of bureaucracy in facilitating intra-region-trade.

For instance, the EABC members said it takes up to nine months for TFDA to register products from EAC partner states, which goes against the country’s law that provides a maximum duration of 60 days.

The complaints by the business community highlight the challenges that continue to face EAC over the elimination of trade barriers.

These barriers have denied the region larger markets, economies of scale, and promotion of local, regional and global trade — the benefits envisaged with free trade among the nations.

A report by the EAC Secretariat released earlier this year showed that despite the target to do away with non-tariff barriers (NTBs) by December 2012 some countries have even introduced fresh ones — about 10 — while 35 remained unresolved. Only 36 have been resolved.

This means businesses will have to continue incurring huge costs arising from the NTBs — mainly weighbridges, roadblocks, poor infrastructure, unnecessary delays at border posts, lack of harmonised import and export standards procedures and documentation.

“It takes over nine months to register a product in Tanzania, whereas the same process takes less than a month outside the EAC,” Raphael Kimoni, the exports manager at Kevian (K) Ltd,  told an EABC and Tanzania Private Sector Foundation (TPSF) meeting in Dar es Salaam last week.

Mr Kimoni, whose company manufactures juice, was also concerned with the TFDA’s reluctance to share the laboratory analysis of the product it declines to register.

Richard Musani, marketing manager at Ugandan firm Movit Products, said once a standards body of any EAC partner states certifies a product, the same merchandise should be registered in the shortest period possible.

“TFDA needs to spend five to ten days to register a product from the EAC member countries since the partner states have harmonised standards,” said Mr Musani.

Director of food safety at TFDA Raymond Wigenge, blamed the delays on inadequate staff at the agency.

“TFDA has around ten staff members to deal with thousands of products waiting for registration. So the delay is not deliberate,” Mr Wigenge told the business community.

The EABC members also said the numerous licences demanded by the Tanzanian taxman was also hurting business. Tanzania transporters are compelled to have a cargo and transit licences, while those traders importing finished goods are not subjected to the same.

Pushing for amendments

EABC has been pushing for an amendment to the East African Community (EAC) treaty to push partner states to implement the Customs Union and Common Market Protocols to effectively end or reduce barriers. 

The EAC partners had, in principle, agreed to remove NTBs by December, but in the absence of a legally binding framework, the implementation largely depends on the goodwill of the countries. The business executives also complained of duplication in the checks and clearance by the agencies.

For instance, products from EAC partner states entering the Tanzania’s market are subjected to the laboratory testing, certification and licensing by both TFDA and TRA.

Clearing agents

TRA Commissioner for Customs and Excise, Tiagi Masamaki Kabisi said nearly 80 per cent of delays in clearance of cargo was caused by clearing agents.

 “We are taking the blame, but the truth of the matter is that 80 per cent of imports and exports documents are normally rejected at the first entry point due to errors” Mr Kabisi said.

He said clearance agents take long to respond to queries raised from documents they have lodged for clearance of cargo.

Volumes of trade

According to the EABC executive director, Andrew Luzze, the EAC-intra-trade at the moment stands at 13 per cent of the total trade volume, against the 87 per cent of business that the bloc offers the outside world.

“We are exporting thousands of jobs to the outside world while our own people are jobless. The public and private sector must work together to change the trend,” Mr Luzze said.

European Union, intra-trade accounts for 60 per cent of the total trade, while trade within the North America Free Trade Area (NAFTA) accounts for 48 per cent of the total trade of its member states.

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