Tanzania, Uganda in search of trade barriers cure

Dar es Salaam. Tanzania and Uganda yesterday agreed to iron out all tariff and Non-Tariff Barriers (NTBs) to trade that were impeding trade between the two East African countries.

The barriers, which were affecting trade between the two parties include, Dar es Salaam port low capacity, delay in cargo clearance, red tape, inefficient of the Central Railway from Dar es Salaam to Mwanza, unfriendly taxation system and infrastructure problem and corruption.

The commitment to address the challenges was made by the Heads of State from the two parties during the first Tanzania-Uganda Business Forum held here in the city.

The main agenda of the joint business forum, which brought together over 1,460 participants from the two countries, with Uganda accounting for 312, was the question on how to improve bilateral trade between the two.

President John Magufuli said trade volume between the two countries was not that strong despite the available plentiful opportunities.

“Despite a 207 per cent increase to Sh388.5 billion in trade volume between Uganda and Tanzania in 2017/18 financial year compared to the preceding year, the performance is still lower compared to the available opportunities,” noted Dr Magufuli.

He said Uganda’s registered companies in the country were only 22 valued at $143 million (about Sh328.9 billion) in investments, with a number of generated employments standing at 2,230.

The figure for the number of Uganda’s companies registered here, is far below compared to 504 Kenyan companies present in the country.

He also said out of 7.1 million Uganda’s cargo in transit, only 167,000 passed through the Dar es Salaam port. “We need to ask ourselves why there is low trade volume between the two countries,” opined President Magufuli.

He said due to infrastructure challenge there had been high reliance on road transport, which is not in favor of cutting costs of doing business.

“Heavy dependency on road transport is not only costly, but also unsustainable,”

Magufuli said to improve business environments, Tanzania has taken a number of measures such as improvement in infrastructure such as the expansion of the Dar es Salaam port at a value of over Sh1 trillion, increasing the port’s efficiency, and opening the border post at Mutukula for trade in a fresh bid to facilitate flow of goods and service, SGR and aviation.

For his part, president Museveni said public servants were to blame for barriers to trade. “They don’t know the fact that for the country to survive trade must be there,” he said.

“In their mind they think there is other way for the country to develop.”

Mr Museveni said it is high time the two countries harmonised regulatory issues, standards and strategies, to cut bureaucracy and costs of doing business.

“For us to cut costs of doing business, railway, electricity and development finance should be accessed at a low price. These areas are not for profit making but are the bone marrow for the prosperity of the economy,” said President Museveni.

The Tanzania Private Sector Foundation (TPSF) chairman, Mr Salum Shamte, said, “…with abundant opportunities that the two countries have, we have all what it takes to double trade volume in future,” he said.”

Some of the highlighted opportunities are from manufacturing sector, agriculture, tourism, extractive industry, among others.

He said investors from the two parties should partner to set up businesses in both countries.

“It is more convenient to have partnership with investors who are familiar with the area you are investing,” noted Mr Shamte.

The board member of Uganda Private Sector Foundation, Ms Merian Sebunya, who was speaking on behalf of the chairman said, “We need to iron out all NTBs and not introduce others, with a view to making the economy be driven by the private sector.”