Bribes demanded by regulatory authorities contribute to increased cost of doing business along East Africa trade corridors

                                                  PRESS RELEASE

Official Launch of the TI Report - From Left - Right, David Stanton, Deputy CEO TMEA, Lisa Karanja, Director PSO/CSO TMEA, Samuel Kimeu, Executive Director, TI Kenya, Richard Sindiga, Director, Economic Affairs, MEAC, Deus Ngerageza, Representative ABUCO, Burundi(Photo by Trade Mark)

A survey by Transparency International Kenya and Trade Mark East Africa (TMEA) reveals that regulatory authorities in East Africa demand the highest amount of bribes from transporters and drivers along the transport corridors.

According to the report titled Bribery as a non-tariff barrier to trade; a case study of East African trade corridors, Tanzania’s regulatory authorities ranked worst at USD 12, 640 (Kshs. 1,074,400) followed by Kenya at USD6, 715 (Kshs. 570,775), Uganda was third at USD3, 672 (Kshs.312, 120) while Rwanda ranked fourth at USD 679 (Kshs. 57,715) and Burundi had the lowest at USD293 (Kshs. 24,905).

 The survey conducted in collaboration with Transparency  International  chapters in Burundi, Rwanda, Uganda  and  the  Transparency  forum  in  Tanzania  further indicates that bribery  costs  in Tanzania per  year  consisted  of  about 18.6% of the value of goods transported.

Speaking during the launch, Mr. Richard Sindiga the Director of Economic Affairs in the EAC Ministry, said: “By reducing or eliminating tariffs and working to minimize non-tariff barriers across the EAC, the governments in partner states can ease the flow of people and goods across borders.  This will create larger markets, enable economies of scale, and promote local, regional, and global trade, which, in turn, will foster a dynamic environment for economic growth across the entire region from which Kenyan and East African businesses will benefit. However, the problem of non-tariff barriers in the EAC is widespread and requires joint effort to eliminate them.”

   

Mr. Sindiga said that the Kenyan Government is doing everything possible to eliminate the barriers but also concedes that the war is far from being won. He said the ministry is finalizing a survey to find out, why NTBs persist even after the council of ministers had directed partner states to eliminate them and also get the opinion of the stakeholders on what could be done to eliminate the persisting NTBs.

Transparency International Kenya Executive Director, Samuel Kimeu commented on bribes as a non-tariff barrier to doing business in the region. “Corruption serves as an unnecessary cost of doing business and as an additional burden to the consumer. Left unchecked, the vice will make this region uncompetitive.” He also noted that the full benefits of integration will not be achieved unless decisive efforts are put in place to confront corruption in the trade and transport sectors.

TradeMark East Africa which funded this study was represented by Lisa Karanja, Director of Private Sector and Civil Society.  “Regional integration is gaining pace but existence of non-tariff barriers continues to be a deterrent in the full implementation of the various protocols. TMEA commissioned this study with a view to enhance the advocacy for the elimination of non-tariff barriers. We expect a comprehensive dialogue between state and non-state actors to address the key issue highlighted by this report. A resolution of the identified issue will lead to a more competitive business environment which will result in increased trade and ultimately prosperity for East Africans”.

 

Follow the link below to access the report from the TradeMark East Africa website:

http://www.trademarkea.com/wp-content/uploads/2012/11/Bribery-as-a-Non-Tariff-Barrier-to-Trade.pdf