Traders concerned about tracking cost

Nairobi. High cost of additional equipment for tracking and tracing goods has hampered smooth implementation of the Single Customs Territory (SCT), according to the business fraternity.

The system was rolled out by the East African Community (EAC) last year to enable faster clearance of goods and reduce the cost of doing business in the region.

Under SCT, vehicles carrying imported goods from the point of entry to the destination within the region have to be tracked using electronic devices to ensure security and tax compliance.

SCT is based on destination model and under it, goods are cleared at the first point of entry into the community and taxes are assessed and paid in the destination country. Business leaders say the system has eased cross border movement of goods in the region and that by December last year, all goods were rolled onto the SCT. However, the business leaders in Tanzania are concerned that drivers carrying goods beyond the country’s borders have to buy other tracking devices.

“This is due to the fact that the Tanzania Revenue Authority (TRA) covers for transit goods only within Tanzania,” said Frank Dafa, a trade policy specialist with the Confederation of Tanzania Industries (CTI).

He said the drivers taking goods to Kenya, for instance, have to buy new tracking devices from the Kenya Revenue Authority (KRA), which are said to cost up to $1,000 (about Sh2.3 million). He made the remarks in Dar es Salaam last week when briefing journalists from the six East African Community (EAC) member states on snags hampering cross border trade and investments in the bloc.

The problem has been compounded by lack of interface between the electronic cargo tracking system between the central and northern corridors.

Tanzania and Burundi, which are in the central corridor, are using TANCIS and ASYCUDA electronic cargo tracking systems while Kenya, Uganda and Rwanda use RECTS.

Mr Dafa said besides lack of harmonised cargo tracking systems among the EAC countries, there was also a limited scope in the application of SCT where cargo is transported through multi model systems.

He cited cargo going to land-locked Burundi through railway, road and lake transport, which according to him, took longer to obtain an SCT clearance.

Speaking in Nairobi on Friday, the chairman of the East African Business Council (EABC), Mr NIcholas Nesbitt, admitted the two ‘incompatible’ systems were posing problems for smooth trade.

He said IBM Digital Network Africa was ready to assist to roll out a new technology that would lead to interface of the two systems in order to enhance flow of trade.

CTI says although the SCT system has reduced cost of transporting goods across the region, its implementation has also been hampered by lack of connectivity among the customs systems of different countries.

Also experienced are abrupt changes of customs procedures resulting into imposition of trade bans and other non-tariff barriers.

This led to, among other problems, the temporary ban of liquiefied natural gas products and rice from Tanzania to Kenya, a few months ago.