The private sector of the East African Community has launched a regional trade portal for small and medium enterprises amidst grumbling against the political leadership’s failure to respond to their concerns.
Apart from the persistent presence of non-tariff barriers by different national authorities, nationalist interests have even failed initiatives like the liberalization of the air space, which the entrepreneurs say would do a lot to boost trade and travel and generally, the economic growth of the region.
But the East African Business Community-EABC says that the private sector group can only do so much to improve the business environment in the region because most of the work has to be done by the government.
The business leaders told the East Africa SMEs Summit 2022 in Kampala that the success of all the initiatives that the private sector puts in place will be hindered by the hard environment that the governments can improve. They wondered for example, why travel between Entebbe and Kisumu costs three times more than Kisumu to Mombasa which is a much longer distance.
The EABC Executive Director, John Bosco Kalisa said it all has to do with the taxes that airport authorities levy on airlines from other countries. He said under the EAC protocols, by now airlines within the region should be treated as domestic when flying between partner states.
All the East African Community countries are signatories to the Yamoussoukro Decision, a World Bank-supported initiative where the signatories agreed to have their airspaces opened or liberalized. Under this, the country’s authorities would treat airlines from other member countries as if they were local operators.
However, 24 years since the African countries adopted the now 34-year-old declaration, many have abandoned or decided to delay the implementation.
“Part of the reason for Africa’s under-served status is that many African countries restrict their air services markets to protect the share held by state-owned air carriers,” according to a statement by the World Bank.
The East African Countries agreed last year to start reviewing and harmonizing aviation regulations as a way of reducing costs and making them more predictable. The EAC Secretariat later asked airlines to submit lists of charges and taxes they incur when operating at any of the region’s airports.
However, Uganda reviewed its taxes and scrapped some on airlines operating through Entebbe Airport, which, experts say could trigger price wars for the good of the travellers. Kalisa says apart from air travel, there are a number of challenges, especially regarding taxes and transport policies that must be harmonised in trade flow to improve.
Kingsley Melita Kipury, the Director of Strategy and Partnerships at the SME Advisory Unit in the Presidency of Kenya, says there is a lot that is needed to streamline trade in the region by removing the barriers. He hopes that the portal launched will help the business community reduce the need to travel, hence save on expenses, because it gives the traders most of the required information and allows transaction settlement online, among others.
Brian Joseph Otim, the lead developer of the portal (www.myeasoko.com) says the platform does not only provide trade information but also has training manuals and information on jobs, internships and tenders among others, that the users can access freely.
Some traders questioned the effectiveness of the portal in settling a transaction where the regional gas no single foreign exchange system. An example was given of the Burundi currency where exchanging it directly into the Uganda shilling gives a different value from if it is first exchanged into another currency, like the dollars. But Otim says the portal allows the seller of a product to state the amount required for an item, in the desired currency.
Sheila Kawamara, the Executive Director of the regional women traders support group, EASSI, expressed concern that cross-border women traders, who are largely not as literate, will find it hard using the portal. She wants it to enable access through different languages, giving the example of how the smartphone has been made easy to use.
She also urged SMEs, especially women to mind the standard of their products because the portal will also be used to enforce compliance with standards. Kawamara says that traders should not dump substandard products in other markets because this can kill their businesses.
Meanwhile, EABS CEO John Bosco Kalisa urged the countries to desist from unexplainable border closures and blocking of goods. It comes on the heels of Tanzania’s announcement of a ban on the importation of day-old chicks from countries including Uganda, according to media reports there.
Earlier this year, Rwanda announced it was re-opening its border with Uganda after a three-year closure, but to date, trade remains restricted, while her border with Burundi remains closed.
Kalisa urged the political leaders in the country to ensure compliance with the EAC treaties.
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