Barriers hurting cross-border trade

Friday February 24 2017

The Rusumo border post. Neighbouring countries have been accused of not complying with cross-border trade pacts. PHOTO | FILE

Non-compliance of regional trade agreements by Rwanda’s neighbours is taking a heavy toll on the nation’s earnings from cross-border trade.

Legislators are concerned that informal trade with Burundi, Tanzania as well as the Democratic Republic of Congo, faces multiple barriers resulting in low export volumes to these strategic markets.

A report tabled last week by parliament’s Standing Committee on Trade and Economic Affairs shows that while trade with DR Congo suffered as a result of the instability in the Kivu Province, Burundi and Tanzania have imposed restrictions intended to block Rwandan traders from accessing their markets.

The highlighted practices are contrary to the provisions of the East African Community Customs Union as well as other trade agreements with regional trading blocs such as the Economic Community Great Lakes Region (CEPGL), which brings together Rwanda, Burundi and DR Congo.

“We want the concerned authorities to address the issues we found,” said MP Adolph Bazatoha, who leads the committee that carried out an assessment at different borders.

Mr Bazatoha said the issues had been forwarded to the Ministry of Trade, Industry and East African Community Affairs.


Burundi is Rwanda’s second largest cross-border trade market after DR Congo, with agricultural and livestock products being the major commodities traded in informal transactions.

However, trade with Burundi is carried out illegally after the government imposed trade restrictions with Rwanda.

Worsening diplomatic relations with Burundi led to the closure of the border with Rwanda in July last year. Ties between the two countries deteriorated in 2015 after Burundi accused Rwanda of having a hand in its internal instability, allegations Kigali denied.

The report also accuses Tanzania of imposing visa requirements for Rwandan traders and also requiring them to have businesses registered in Tanzania that also include local shareholders.

READ: Report blames Tanzania for increase in non-tariff barriers

According to Central Bank data, Burundi and DR Congo accounted for more than half the total formal and informal cross-border exports, but those to Burundi accounted for only 7.8 per cent in the first half of 2016.

Data from the National Bank of Rwanda had showed that owing to the decline in exports to Burundi, Rwanda’s total cross-border exports within the EAC fell to $100.5 million in 2015, from $107.5 million in 2014.Cross-border exports to Burundi alone had declined by 27.2 per cent in 2014.

According to Trade Ministry officials, the rampant barriers in cross-border trade could derail the achievements of the five-year national cross-border strategy, which is ending this year.

The strategy was expected to help the country’s exports to the region grow by 31 per cent on an annual basis until 2018 owing to bilateral and regional trade pacts.

MPs said issues to do with non-compliance of trade agreements by some countries needs to be addressed at the EAC, Comesa and CEPGL levels.

“Can something be done about these countries that refuse to abide by the protocols they signed?” asked MP Jean Thierry Karemera.

MP Karemera said trade with Burundi and DR Congo has  faced challenges even after the heads of state resumed CEPGL activities in August 2010, years after the bloc was dormant.

Beside complications in cross-border trade with individual countries, gaps were raised with regard to Rwanda’s capacity to meet the growing demand in neighbouring markets.