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Comesa worry as NTBs boost low-value trade

Wednesday October 27 2021
weighbridge

A weighbridge along Mombasa-Nairobi road. A survey by the Comesa Secretariat recommended that governments consider reducing the cost of trading formally and enhance the efficiency of border controls to improve compliance with existing trade-related regulations. PHOTO | FILE

By ANTHONY KITIMO

Increasing informal trade among the Common Market for Eastern and Southern Africa (Comesa) states has resulted in 11 percent decline of the value of intra-Comesa total exports.

A survey by the Comesa Secretariat led by consultant Dr Evarist Mugisa has concluded that the increasing non-trade barriers (NTBs) are to blame for the proliferation of informal trade and the decline in value of exports to $9.7 billion in 2020 from $10.9 billion in 2019.

The 37th Meeting of the Comesa Trade and Customs Committee on October 15 heard that the low intra-regional trade was also a result of existing gaps in information on trading opportunities, regulatory requirements and factors that inform business decisions on production of goods and trade.

The survey reviewed member states’ policies related to the formalisation of the informal economy, focusing on informal trade drivers, the impacts of informality on the economy, including on government revenue and on productivity.

It also identified the policies that member States have instituted to address informality.

The study is part of the implementation of the Small-Scale Cross Border Trade Initiative funded under the 11th European Development Fund.

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Simplified Trade Regime

This project is intended to increase formal small-scale cross-border trade flows in the Comesa/tripartite region, leading to higher revenue collection for governments at the borders as well as increased security and higher incomes for small-scale cross-border traders.

The meeting identified ways on how to eliminate NTBs, implement trade facilitation measures including Comesa digital Free Trade Area, how to advance services liberalisation and build effective platforms for trade promotion and e-commerce.

The study also recommended that governments consider reducing the cost of trading formally and enhance the efficiency of border controls to improve compliance with existing trade-related regulations and addressing the implementation challenges of the Comesa Simplified Trade Regime.

Comesa Assistant Secretary General in charge of Programmes, Dr Kipyego Cheluget said; “If well implemented these could significantly increase intra-Comesa trade, reduce time and cost, increase regional competitiveness, create jobs and positively impact on living standards of our people.”

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