EA region must talk over its now endless trade tiffs then act on them
Saturday April 01 2023
The 11th Joint Rwanda-Uganda Permanent Commission that convened in Kigali over three days from March 22, can be described as the most cordial encounter between the two neighbours in a long time. Coming on the back of a thaw in relations after a tense five years, the meeting was watched with high expectations by the region business community.
Yet in typical diplomatic fashion, the agenda and language looked far removed from the most pressing needs for business. Unpredictable rules and seeming deviations from the provisions under the East African Customs Union continue to irk many. Ugandan traders still accuse Rwanda of cherry-picking which products it allows into its market, imposing heavy losses on exporters of perishables. A mutual recognition agreement for the quality marks of sister standards bureaus appears to be regularly flouted by Rwanda customs.
Despite a one-stop border facility, travellers can lose as long as three hours clearing entry procedures. The effects of this harmony are very visible. Once a vibrant frontier town, the border town of Katuna on the Uganda side of the border, is a forlorn shell of its former self.
Trade between Uganda and Rwanda fell so sharply with Kampala taking the hit, while Rwandan consumers suffered higher prices for basic consumer goods because of longer supply chains. A cross-border transporter that used to deploy 20 buses a day is lucky to manage five today. While Ugandan manufacturers have been able to mitigate part of the losses by opening new markets, this has been at a higher cost of doing business.
Figures released by the Uganda Tourism Board this week show that Rwanda, one time the leading source of visitors to Uganda, has lost that position to Kenya. Even with improved relations, last year, only 158,000 Rwandans visited Uganda compared to 376,000 Kenyans. The untold story is how many breadwinners have fallen out of employment.
While the foundational issues such as security, politics, and infrastructure which appear to be closer to the hearts and minds of bureaucrats are important, they are more difficult to achieve and sustain without buy-in from the wider publics.
A cross-border trader who suffers losses because of a shift in goalposts, is unlikely to be objective or endeared to the person he or she sees as the primary obstacle to free commerce.
Common tool in diplomacy
Trade sanctions are a common tool in diplomacy but they need to be predictable, in order to minimise collateral damage. Non-tariff barriers are worse than sanctions because unlike the latter, they can be fluid and more difficult to plan for.
Way beyond Uganda and Rwanda, NTBs remain a problem. And contrary to the self-adulation that often graces regional meetings, they refuse to go away. The net impact of such a status quo is that it obscures the true potential of regional trade.
The full scale of the losses Rwanda and Uganda have suffered during their political standoff may never be known. But even the tip that has been visible to the public should be lesson enough that dialogue might be the stitch in time that saved nine.