Kenya, Uganda and Rwanda are considering building a superhighway from Mombasa to Kigali, to facilitate trade, parallel to the planned standard gauge railway.
According to regional trade lobby TradeMark East Africa, which will be facilitating the project, it is expected to have a six-10 lane road, and construction is scheduled to start in 2016.
Inspired by the N1 highway that runs from Cape Town in South Africa to Harare in Zimbabwe, the proposed road is intended to ease the movement of cargo, thereby reducing the cost of doing business and increasing intra-regional trade.
Expenditure on transport in the EAC countries accounts for 45 per cent of the total cost of goods. This is 30 per cent higher than in Southern Africa, making commodities produced in the region uncompetitive.
John Byabagambi, Uganda’s Junior Minister for Works who is chairing the Standard Gauge Railway Committee, said that TradeMark was doing feasibility studies for a dual carriage highway that forms part of plans to expand the Northern Corridor because the current single carriage system is too narrow and fraught with inefficiencies.
Allen Asiimwe, the TradeMark East Africa country director for Uganda, said the superhighway will have no weighbridges or roadblocks.
This means that once the goods are loaded onto a truck at the Port of Mombasa, there will be no stops until the final destination. Weighbridges and roadblocks are among major hindrances to trade in the region.
Ms Asiimwe added that the road, the facilitation of the revenue authorities of Rwanda, Uganda and Kenya to acquire the latest software known as Automated Systems for Customs data (Asycuda), plus a $50 million investment in the port of Mombasa, will ensure that cargo moves fast and that it is constantly monitored.
“Investment in a regional asset like the Mombasa port will reduce the time for clearing goods from 18 to five days,” she said.
The software enables Customs officials from the three countries to use the electronic tracking system to monitor the trucks.
The software will also boost the EAC Customs Union since revenue authorities will be able to assess and collect taxes at the first point of entry. This means that once a trader has paid his taxes for goods bound for say Uganda, there will be no need to pay a refundable bond to Kenya. This has been the practice due to the fear that goods could be dumped in Kenya.
As the cost of doing business in the region drops, intra-EAC trade, which currently stands at $3,800.7 million or just 13 per cent of the total trade volumes in the region, is expected to increase.
Experts warn that intra-EAC trade is well below the standards of any functional common market.
“Intra-regional trade should account for at least 25 per cent of the total trade volumes in any functional common market,” said Rashid Kibowa, commissioner for economic affairs in Uganda’s Ministry of East African Community Affairs.
In the European Union, intra-regional trade accounts for 55 per cent of total trade while it stands at 40 per cent in the US.