Transporters say Northern Corridor is a non-trade barrier
Saturday September 11 2021
The Northern Corridor, a lifeline of the region, is continuously facing challenges that affect cross border trade, slowing down commerce and causing shocks to economies struggling to recover from effects of the pandemic.
South Sudan, Uganda and Kenya are still working through the recent resumption of cargo trucks movement to Juba following weeks of blockade. But just as soon, this month, South Sudan asked the Uganda Revenue Authority to start implementing the Electronic Cargo Traffic Note Certificates (ECTN), adding another layer of costly regulation to be borne by importers and transporters, increasing the cost of using the Northern Corridor.
This means all goods destined for South Sudan and the DR Congo from either the port of Mombasa or Dar es Salaam through the border points of Kenya and Uganda will have to be issued an Electronic Cargo Traffic Note Certificates at a minimum cost of $75 for both exports and imports.
The fee ranges from $75 to $100 for vehicles, 20ft containers will cost $80 while those of 40ft will be $110. Truck drivers who violate this order will be fined between $10,000 and $500,000 depending on the nature of goods in transit.
The charges are contained in a circular dated December 18, 2020, signed by South Sudan’s Minister of Trade and Industry Kuol Athian Mawien.
It reads, “All transporters, companies, shippers and freight forwarders, road carriers, importers and shipping lines, airlines and other involved into the transport either for goods import/export or in transit from and to South Sudan will have to comply with all requirement of the trade facilitation system implemented by South Sudan.”
“The entities concerned are required to ensure the strict application of this circular/letter. If the ECTN is not presented and failing to comply you are exposed to the sanctions provided by South Sudan regulations and in this regard, fines from $10,000 to $500,000.”
Kenneth Chemase, a liaison officer and agent for Kenya International Freight and Warehousing Association at the Malaba-Kenya-Uganda border, said the implementation has caught transporters by surprise. “That is a report we received from Uganda Revenue Authority that they will soon start implementing the ECTN and some fees will be paid. But we are yet to be told how much the fee is and when it will be implemented. That is new information that we have just received. Actually the implementation is yet to start.”
Cargo clearing agents at the Malaba-Kenya-Uganda border, too, said they were not aware of the new conditions to South Sudan.
When contacted, the East African Business Council chief executive John Bosco Kalisa said the ECTN was already being implemented in the region and that only South Sudan and the DR Congo were yet to implement it.
“We are planning to hold discussions with all the stakeholders including the revenue authorities and the freighters to educate the truck drivers on the need to implement it,” said Mr Kalisa.
“So the truck drivers should continue with their work as we wait to meet all the partners involved in the matter.” Mr Kalisa was clarifying what appears to have been a verbal order by the URA to border officials to implement the ECTN.
“DRC is already on cargo tracking. But South Sudan has been having challenges given the connectivity issues. That is why there has been a strike (truck drivers),” said Mr Kalisa, in reference to complaints of delays by truck drivers.
“While the system has been in place, it has not been effective given the challenges in South Sudan including insecurity, lack of electricity, and lack of internet network. But the idea has been embraced by South Sudan but the issue is the usability given the infrastructure challenges.”
He clarified that the ECTN is not a trade barrier. “The purpose is to prevent diversion of cargo and smuggling of goods because it monitors how the cargo is moving if there are roadblocks and if there are issues related to an NTB,” said Kalisa.
He said the tracking system enables traders to monitor the movement of their goods from the port of entry (Mombasa) to the final destination.
“Once you are enrolled into the system, the importer and owner of the cargo, as well as the tax authorities are able to track where the truck is. There is that element of protection of revenue as well as prevention of diversion of cargo.”
But the ECTN is coming at a difficult time amid insecurity concerns at the Uganda-Kenya-South Sudan border. Recently, insecurity on the Nimule-Elegu border route to Juba saw over 1,056 trucks stranded at the Elegu border crossing, risking loss of goods and the spread of Covid-19.
The EABC estimates that each day a truck is stranded, the transporter and client incur losses of about $1,000.
“Furthermore, the release costs for truck drivers who have fallen victim to the insecurity assaults range between $10,000 and $20,000 and sometimes their life,” said Mr Kalisa.
“Businesses can only reap the benefits of the EAC Common Market if peace and security is guaranteed and flourishes.”
Increasing cost of business aside, insecurity affecting commerce in South Sudan has dogged regional business people for a while now with no solution in sight as the government there is blaming armed groups which they are accusing of disrupting trade with its neighbours.
This week proved just how much it is costing the region to conduct trade with South Sudan when Uganda’s Information, Communication, National Guidance Minister Dr Chris Baryomusi said President Yoweri Museveni and his South Sudan counterpart agreed to deploy drones along the highway to Juba.
This is on top of Juba’s deployment of its army and police as the government seeks to end armed attacks on the Nimule-Juba highway. The Sudan National Police Service (SSNPS) and South Sudan People's Defence Forces (SSPDF) have been deployed on the Juba-Nimule highway.
“The government is committed to provide security and safety to truck drivers along Nimule-Juba road,” says a Note Verbale the South Sudan Ministry of Foreign Affairs and Co-operation sent to the Ugandan embassy in Juba dated September 6.
The note seen by TheEastAfrican, also assured drivers that all obstacles causing delays on the Nimule-Juba will be removed. This includes clearing overgrown roadside bushes.
“I have spoken with three drivers returning from Juba who told me that besides the armed security escorts from Nimule-Juba there is also a permanent presence of police and army at every black spot on the highway,” a Ugandan security officer speaking to The EastAfrican said. However, as the highway is secured, Ugandans living near the South Sudan borders are seeking assurances as the state of lawlessness in South Sudan spills over.
On August 29, the Ugandan parliament was told that two boys and a girl were shot by unknown gunmen in attacks at Ewafa Parish, Alibabito sub county in Moyo district.
And as governments in Kampala and Nairobi are working with Juba for lasting solutions to the highway insecurity, South Sudan's main opposition group National Salvation Front (NAS) has denied allegations it was behind the mayhem and looting of cargo on the country’s major highways.
In an interview with The EastAfrican on Thursday, NAS spokesperson Samuel Suba described the claims as false, saying, “These are just allegations, we are not working or doing such operations and we don’t have any intention for that particular strategy.”
Speaking on the problem, East African Community Secretary General Dr Peter Mathuki said despite the challenges facing Rwanda, and South Sudan and its EAC neighbours, efforts are ongoing to ensure the free movement of goods, people and services.
“The secretariat wrote a letter to President Salva Kiir and by Thursday, the trucks were moving to South Sudan,” he said.
“The EAC Secretariat has been engaging the governments of Rwanda, Uganda, and Burundi too to resolve the issues affecting movement goods. Sometimes we engage bilaterally,” he added.
He, however, attributed the failure or slow movement of goods to a number of factors including the effects of the Covid-19 pandemic and internal political challenges.
“Covid-19 adversely affected the region between 2020 to early 2021 but there is a rebound and intra-regional trade has increased immensely, particularly between Tanzania and Kenya,” said Dr Mathuki.
Differences between Rwanda and Uganda have seen their common border at Gatuna, the main transit point for the flow of goods and people between them, remain closed since February 2020.
The movement of goods between Burundi and Rwanda has been slow since the former president Pierre Nkurunziza accused Rwanda of backing the failed 2015 coup. But diplomatic engagement between the two countries has improved the situation immensely.
However,Tanzania has resolved challenges facing free movement of goods to Kenya, Uganda, Rwanda and Burundi.