Special-Report_Doing-Business-in-Uganda-East-Africa-and-Beyond_East-African-Business-Week_Trade-Report Mar. 2015 | Page 6

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SPECIAL REPORT
East African Business Week I February 23 - March 1, 2015

MINISTRY OF TRADE, INDUSTRY AND COOPERATIVES

Doing Business in Uganda, East Africa & beyond
East African Business Week I February 23 - March 1, 2015

Erasing trade barriers
Interview with Minister of East African
Community Affairs
East African Community (EAC) member states
signed the Single Customs Territory (SCT)
in 2005 to ensure free movement of goods
and services across the common borders.
The ultimate aim is to reduce the cost of
doing business in the region. SHEM BAGEINE,
Uganda’s State Minister for East African
Community Affairs, recently talked to Paul
Tentena about what has been achieved during
the past 10 years.

One of the principles agreed upon was to
establish a common tariff to expedite the
movement of goods within the region. This is
being implemented in the Customs Union, but,
to completely remove Non-Tariff Barriers, we
are going to set up a law that will completely
eliminate Non-Tariff Barriers. The law will come
with penalties and sanctions to offenders.

Well, to a certain extent, yes. When we
institutionalized the Single Customs Territory
(SCT), there were challenges in the transportation
of goods which used to take a number of days.

What are some of the unforeseen c hallenges
facing the Single Customs Territory?
The treatment of goods that were
exempted from paying duties still needs
improvement. Capacity building is still a
challenge as well as the collection and
management of revenue and taxes
being paid.

This was due to bad roads, very many road
blocks, and weigh bridges. Today, transporting
goods has improved taking fewer days.
Secondly, the other factors that hampered doing
business, like road networks have all improved.
Road blocks and weigh bridges have all reduced.
The supply of power has also improved. This has
all helped in cost reduction to doing business.

Clearing Agents blame the ever
growing network failures/
breakdowns as a new challenge
to doing business. How are you
handling this at a ministerial
level?

What has been the government contribution
towards this reduction?

Commercialization of agriculture cannot be
done through peasantry farming, but through
Private Public Partnerships (PPP). We’re also
developing agricultural infrastructure like silos
and road networks and encouraging value
addition. All these will lessen the cost of doing

Increase in traded goods

Non-Tariff Barriers?

Has the cost of doing business reduced with in
the region?

Working out determined priority projects like
improving the road infrastructure and energy.
This we think will lead to commercialization of
agriculture hence making Uganda a food basket.

50%

business.
Has the volume of trade across borders
increased?
The volume of goods being traded has definitely
increased. I don’t have figures with me right now,

but goods being traded have increased by more
than 50%.
The imports have gone down as we work on
import substitution.
How has the EAC fared in handling the issue of

Yes, we’re aware of the
failures in the networks
that delay the smooth
running of the business. We’re discussing it, but
at times some of those challenges may occur.
When change is introduced, some people may
want to fight it. But, we’re discussing it, including
complaints of extra charges and arbitrary fees
being charged.

Network failures hinder transactions
 Clearing and forwarding agents insist
network and internet failures remain a major hindrance to doing business in the region,
Writes Paul Tentena
Under their umbrella, the Uganda Clearing Industry and Forwarding Association (UCIFA), Kassim Omar the UCIFA President said there should
be strong infrastructure back-ups to limit the
frustrations caused to business people through
such failures and delays.
“This is still a very big problem as far as the
Single Customs Territory is concerned. Payments through banks credit transfers, bank

cheques/drafts, and ordinary cheques, are time
consuming. Even telegraphic transfer (TTs) consume a few days. There are quicker methods like
payment through mobile money and Electronic
funds transfers (EFTs) which can be adopted to
ease business,” he said.
There are also payments through direct debit
where customers issue “Standing Orders” to
their bank to make regular or recurrent payments to third parties with accounts. There is
instantaneous debit to the payee and credit to
the receiver.
Individuals or companies use it for payments
of salaries, loans, or utility bills, among others.

Omar said the level of human resources and
allocation should also be given priority by tripling staff working at Customs points.
“The eight hour shift is too big for effective delivery of work.
Governments must triple the number of
workers to work for shorter hours to avoid delays
and exhaustion,” Omar said.
In October 2013, Presidents Yoweri Museveni
of Uganda, Paul Kagame of Rwanda and Uhuru
Kenyatta of Kenya agreed to implement a Single
Customs Territory (SCT) between them as members of the East African Community. Tanzania
and Burundi followed suit at the Summit in No-

vember 2013.
At a stroke (of the pen), the agreement removed multiple weighbridges, police and
customs checks along the Mombasa-Kampala-Kigali route and introduced computerised
clearance and electronic tracking and other innovations that overturned many of the hurdles
to free trade or Non-Tariff Barriers (NTBs) that the
Northern Corridor was infamous for.
Omar said managing other stakeholders like
the shipping lines must be handled as they impose extra charges and arbitrary fees to their
members, hence being an impediment/ a
stumbling block to doing business in the region.