Uganda and Tanzania are locked in a dispute over road user fees for trucks headed to the Dar es Salaam port, with Kampala threatening to retaliate against “unfair” charges imposed on its transporters that are higher than those applicable to Rwandan shippers.
Kampala has filed a complaint with the EAC Council of Ministers, accusing Tanzania of breaching the Common Market Protocol by imposing different road user charges to partner states in the same trading bloc.
Escalation of the dispute could hit over $171 million worth of trade between the two East African neighbours, and inflict more damage on the fragile regional integration process.
At the centre of the dispute is a $500 fee that the Tanzanian government charges Ugandan trucks traversing its territory, compared with $152 charged on Rwandan trucks.
The fee is collected to repair and maintain Tanzania's road infrastructure, which keeps the landlocked neighbours connected to the Indian Ocean sea ports.
Uganda argues that this fee is unfairly high, creates an uneven playing field, and goes against the efforts of promoting EAC as a single investment destination.
"It doesn't create a fair playground and we have made appeals of this to the EAC Secretariat through their Council of Ministers, and even our members of the East African Parliament have been raising this issue.
“It does affect trade, because someone has to think twice to get goods through Tanzania because of these charges. They make trade with Tanzania very difficult, and this is not fair play because whatever the charges they must be uniform," Uganda's Minister of Works and Transport Katumba Wamala, told The EastAfrican.
According to Mr Wamala, Uganda prefers dialogue for now, as it sees retaliation against Tanzania being likely to jeopardise trade between the two countries and the region's integration process.
"I think it is a matter we can sort out and agree on," he said.
Tanzanian Minister for Works, Transport and Communications, Isack Aloyce Kamwelwe said the process of reviewing and harmonising the toll charges across the region is currently under way.
"We are reviewing the document. We want to standardise the charges because we are charging $16 per 100 kilometres. I don't know the exact price. My permanent secretary is working on the matter," said Mr Kamwelwe.
"The tarmac also wears out like your clothes, and that is why we have the road tolls. I'm not sure why they set that charge … but I need to get the technocrats so that they can respond," he added. The complaint regarding the road user charge was first raised by Uganda to the EAC Sectoral Council of the Ministers of Trade, Industry, Finance and Investments (SCTIFI) in 2017.
During the Council of Ministers meeting held on September 11, it was noted that the matter has taken long to be resolved despite three bilateral meetings and interventions by the Heads of States.
Tanzania proposed to have another bilateral meeting to resolve the matter. However, Uganda said at the meeting that it was going to apply similar charges to what Tanzania is charging Ugandan trucks entering Tanzania, arguing that Kampala did not see the value in any other bilateral meeting.
The meeting noted that charging of different rates to partner states is against Article 18 of the EAC Common Market Protocol's treatment of Most Favoured Nation .
The meeting agreed to escalate the matter to the policy level for guidance, but Tanzania proposed that the complaint should be referred to the Sectoral Committee on Transport for resolution.
Tanzania also informed the meeting that a similar complaint was reported and is yet to be resolved, in which Uganda does not recognise calibration certificates from its Weights and Measures Authority.
In 2018, Tanzania’s exports to Uganda increased to $105.7 million from $ 27.5 million in 2017, with significant increase recorded in exports of cosmetics, maize, petroleum oils, paper products and paperboard and rolled iron or non-alloy steel.
Uganda’s exports to Tanzania also grew, by 33.1 per cent to $ 66.3 million from $49.8 million in the same period. Key commodities exported to Tanzania included iron and steel, tobacco and electricity.
Impact of NTBs
At its meeting of May 2019, SCTIFI, adopted the terms of reference to conduct a study to measure the impact of non-tariff barriers (NTBs) in the region.
The EAC Secretariat, in collaboration with TradeMark East Africa, commissioned a study to, among other issues, measure the impact of selected NTBs in the EAC. The study would generate analytical tools for measuring the impact of NTBs including actions leading to the development of an EAC-wide NTB SMS/online reporting system, NTB toolkit and fact book.
The EastAfrican has also learnt that the process of contracting the consultancy firm to undertake the study is in its final stages. The study is expected to commence in October, and take about 12 months.
So far there are 17 outstanding NTBs in the region, while two new ones have been reported.
About 10 NTBs have been resolved since November 2019, while cumulatively 188 NTBs have been resolved since 2007.