Opening Borders for East Africa’s Traders – and Doing It Sustainably

Improving intra-African trade is increasingly on the radar as a crucial factor in the continent’s sustainable development, and donors are getting involved to support public-private dialogue and provide technical assistance. We hear from TradeMark East Africa’s Annette Mutaawe Ssemuwemba on reducing barriers to trade, ensuring sustainability, and the impact this work is having on women traders.

It used to take an incredible 45 working days to transport goods from the Kenyan port of Mombasa to Rwanda, passing through Uganda, a distance of approximately 1,450 kilometers. “You can imagine how expensive that was,” said Mutaawe, Chief Strategy and Results officer at TradeMark East Africa (TMEA). She has dedicated her career to trade facilitation, working on the public, private and donor sides of the issue, and has seen some dramatic improvements. That shipment time is now down to eight days and counting.

This makes a huge difference for traders in delicate or perishable goods which were getting damaged or ruined in transit. “And think of the difference for businesses who were having to ensure sufficient inventory as you wait for your shipment to come through; and the cost of people working across the chain, just following up on the shipment,” said Mutaawe. For more information on the EU’s investment in the Northern Corridor, click here.
 

The improvement is also due to the hard and soft infrastructure improvements supported by TMEA. Named for Trade and Markets, the agency is funded by the EU plus six member states, the US and Canada with a pot of $560 million for 2010-17. It focuses on improving trade competitiveness and expanding domestic and regional markets for the East African Community. “We have projects that are aimed at increasing physical access to markets; ensuring infrastructure is in place; that ports are working efficiently; to improve the capacity of ports, their entrance and exits,” said Mutaawe.

That route from Mombasa to Rwanda used to include eight weigh-bridges and various roadblocks where consignments could be held up. Now the roadblocks are gone, and only one weigh-bridge remains. “All that is history now, as a result of all the work we supported through partnerships with the government and private sector,” said Mutaawe.

Just as significant are the improvements to soft infrastructure, such as setting up single windows at customs that allow traders to access and supply information in one place. “They’re low value programmes, but very high impact,” said Mutaawe. “Usually after setting up the system and getting users trained, the maintenance costs are low, and it’s easier to ensure the system remains running efficiently.”

Lessons learned – starting with sustainability

TMEA has branches in the five East African Community countries, Kenya, Uganda, Tanzania, Burundi and Rwanda. “We don’t work from headquarters, we go down to the ground, we get involved,” said Mutaawe. And that, she believes, is one of the key factors in the initiative’s success, encouraging ownership and buy-in from all the stakeholders from the outset.

Interventions, such as reducing transit time from the port, begin by defining the needs of each country, and the region as a whole. “We brought together stakeholders in discussions to define the needs together. That’s the beginning of the ownership process. Then allocating responsibility; who would do what for certain changes that had been defined,” said Mutaawe. “As the partners that brought financing, we came in to support a process the partners already owned, and that really helped. We work closely with border agencies and revenue authorities, and the main users of these facilities, to deepen that sustainability and help them manage these facilities,” said Mutaawe. “We’ve learnt that defining the right partnerships is key to success.”

One important factor is working with partners which have their own funding sources in place, such as government agencies, so they can continue running into the future. When TMEA invests in hard infrastructure such as roads, they never provide 100% of the funding. For a recently-built road between Rwanda and Uganda they went half-half with the governments, which ensures the road is part of their national road development networks. “That means it will continue to be publicly maintained into the future,” said Mutaawe.

When TMEA provides funding to partner organisations, “we might stagger our financing, starting with more in the first year then less the next year, encouraging the institution to develop its own way to raise revenue.”

In terms of the sustainability of ‘soft’ interventions, TMEA encourages capacity-building programmes within teams. “When we do technical assistance, we ask for a mentorship programme with young professionals, which means they can learn from experts and can take on responsibilities,” said Mutaawe. “We also challenge business membership organisations to develop sustainability plans and to show us how they are being implemented.”

Three more lessons learned were the importance of political will, accountability and understanding the change process. A key part is “speaking to politicians; explaining the need and making sure everything we did was aligned to the national development plans of the countries,” said Mutaawe.

Then, “every so often we go back to explain the improvements that are happening; and the tangible impacts; taking people to the border posts to show them the changes that have happened.”

Finally, “you must understand the political economy of the environment in which you’re operating, and define the measurement of results – we’ve learnt you have to define, and be clear about the change you want to see; as a change process is complex and takes time, but the resources we get are meant to be utilized within a defined period, so how you understand that change over time is very important.”

Next steps

TMEA’s Strategy One is coming to an end, but Strategy Two is likely to receive the requisite funding to continue from 2017-24. “That’s exciting for us, as it allows us to have a deeper impact in the region, and tackle issues that add to what we’ve done in Strategy 1; and generally to keep the region vibrant and more competitive,” said Mutaawe.

She pointed to non-tariff barriers as a key area in need of more creative thinking (“eight days is not acceptable; we must work even harder”), as well as standards and harmonization. Infrastructure to connect the trade corridors is also high on the list. “There’s still a lot to do to reduce the costs of doing business, and reducing the time as well,” said Mutaawe.

Then the success will be down to the response from the private sector. “It’s one thing to have these infrastructure facilities in place, but if there’s no goods going through, we haven’t gone our job well,” said Mutaawe. The end result should be “more commodities on the market in East Africa; more people joining business and trade; and reducing our trade deficit, having more exports and less imports coming in.”

TMEA has been described as the largest and most effective Aid for Trade programme, and is already sharing its expertise and best practices with other regions. “We had a mission from West Africa, which came to East Africa to understand the interventions, the governance structures, helping them to make it happen for their own region,” said Mutaawe.

“We were the first kind of programme that pulled resources together from various donors, and we’re now an example of a successful initiative through donor coordination, and we hope we can share our lessons and learning with a global audience,” said Mutaawe.