Dr Merian Sebunya, the chairperson of the Uganda National Logistics Platform, a component of the country’s Private Sector Foundation, made this appeal at an EABC-TradeMark East Africa (TMEA) online seminar on corridor performance and impact on EAC business competitiveness.
EAC transport costs are pegged at $1.8 per km per container against international best practices of $1 per km per container, she said, noting that transport and logistics costs compose 35 percent to 42 percent of product pricing, which is high compared to 8.0 percent in Asian countries.
This cost structure has negatively impacted the competitiveness of the EAC bloc and trade balance, she stated, underlining the need to improve export competitiveness and production capacities of the EAC bloc so that imported containers are returned with a massive tonnage of EAC exports.
The discussion focused on the EAC Trade and Investment Report for 2020, showing that EAC exports globally stood at $16.2bn while imports reached $35.6bn, a $19.4bn negative balance of trade.
Agayo Ogambi, chief executive officer of the Shippers Council of Eastern Africa, said Mombasa port throughput declined by 0.9-percent in 2020, with a total of 34.13m tons of cargo handled, 1.8m tons lower than the 35.9m tons attained in 2019.
Containerized cargo also declined by four percent from 1.4m tons in 2019 to 1.35m tons, to which the shipping executive appealed to government agencies to strike a balance between the services rendered and the fees charged, as outlined in Article 6 of the trade facilitation agreement of the World Trade Organisation (WTO).
Emmanuel Imaniranzi, a consultant with the Rwanda Ministry of Infrastructure working with the Northern Corridor Transit and Transport Coordination Authority said the cargo throughput at the port has increased, while the transit time in the northern corridor is recovering after the easing of Covid-19 restrictions. The use of digital certificates similarly helped but transportation costs are still high, he stated.
Data from the northern corridor transport observatory, monitoring 40 indicators of performance such as transit time, productivity and efficiency, costs, volume and capacity and intra-regional trade projects that improvement of infrastructure, automation and interconnectivity are set to reduce transport costs. Nearly 66 percent of East African cargo uses the northern corridor, he stated.
) Melchior Barantandikiye, head of the central corridor observatory, said a reduction in the number of weighbridges from nine to three and road tolls from $16 per 100 kilometers to $10 per 100 kilometers would improve the performance of the central corridor, pointing out that 80 percent of cargo in the central corridor is transported by road.
John Mathenge, managing director of the Tanzania branch of the Swiss logistics firm Viaservice Ltd, explained that logistics is a business enabler, thus the need for regional holistic approaches and vision on the competitiveness of the transport and logistics sector to reduce the cost of doing business in the EAC zone.
