Non-Tariff Barriers hindering EAC trade with Germany

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East Africa’s apex body representing businesses in the bloc EABC,have co-organised a dialogue seeking to create business synergies in various sectors while showcasing the EAC as an ideal business destination for trade and investment.

The dialogue dubbed the East African Community-German Business and Investment Expert Dialogue which was also organized by the German-African Business Association at the EAC Headquarters in Arusha, Tanzania.

The Executive Director of the East African Business Council, Mr Peter Mathuki said it is with no doubt that if all Non-Tariff Barriers (NTBs) hindering trade within the  EAC Common Market  are removed, the domestic demand and market of over 150 million people from the six EAC partner states will attract  investments from Germany and all over the world as it will be more economically viable for all Investors to invest in the EAC.

In his remarks read by EABC Manager Policy and Standards, Mr. Lamech Wesonga, Mathuki said EABC  will continue to ensure that the agenda of the Private Sector is well articulated and received by the policymakers in order to promote a business environment conducive to business formation, growth, expansion.

Addressing the forum on behalf of the EAC Secretary General, Amb Liberat Mfumukeko, the Deputy Secretary General in charge of Productive and Social Sectors, Hon. Christophe Bazivamo, said the draft EAC Investment Policy which is currently under consideration by the Council of Ministers, envisages a transformed upper middle-income EAC that is a competitive common investment area with a more liberal, predictable and transparent investment environment. Mr Bazivamo told the participants that the investment policy lays ground for Partner States to cooperate in investment promotion, facilitation, liberalization and protection of cross border investment.

“Partner States are to streamline and simplify administrative procedures related to investments, promote and maintain dialogue with the private sector and exchange business information,” he said.

He disclosed that at the regional level, through the Consultative Dialogue Framework, EAC has developed an open channel where the private sector, civil society and other interest groups interface with the Secretary General.

He reaffirmed the Secretariat’s role in advocating for a better and conducive climate investment in the region.

Germany’s ties with East African Member states.

The Exchange has segmented trade ties with each of the East African Community partner state with Germany. Here is the breakdown:

Kenya

A big percentage of the imports of Kenyan products into the German market enter the country through third countries in the European Union, especially the Netherlands, where specialised import and auction houses are well established. Such exports include cut-flowers, tea, fruits and vegetables, which come into Germany through their agents or suppliers in the Netherlands and France.

German exports to Kenya are high value technological and industrial products ranging from plant and equipment, chemicals, electrical, telecommunication and automobiles and parts thereof. These high valued products compared to Kenya’s low valued agro-based raw material products result into big balance of trade in favour of Germany. The deficit level has been aggravated by the low world prices of agricultural products and the maintenance of the farm subsidies by Europe and other developed countries. Germany in general has limited trade with Africa. Trade with Africa accounts for about 1% of the country’s total trade volume. The major trading partners to Germany include the Netherlands, France, the UK and the USA.

Tanzania

For Tanzania, German is expected to invest in the construction of what is to become Africa’s largest fertilizer plant. Such an investment is inline with Tanzania’s bid to industrialize and move from a low income state to a middle income economy by 2025.

Tanzania’s national Vision 2020 prioritizes modernization of agriculture through processing of agro-products as the vehicle to drive economic growth and foster social development. Already the country’s economy is growing at an unprecedented 7% annually and is projected to only get higher.

The Association of German Chambers of Commerce and Industry (DIHK) In April this year also opened an office in Dar es Salaam dubbed ‘AHK Services Eastern Africa Ltd’ in a bid to promote and facilitate business relations between Germany and Tanzania

Rwanda

Rwanda Imports from Germany was US$67.08 Million during 2016, according to the United Nations COMTRADE database on international trade.

According to the Official Rwanda Export Website, coffee was introduced to Rwanda by Germans in early 1900s. It has traditionally been the country’s most important export. Rwanda coffee plays a major role in the economy of the earnings and to the monetization of the rural economy, contributing significantly to foreign exchange

Currently, 400,000 small holder farm families produce it and depend on it for their livelihoods. 97% of Rwandan coffee production is arabica mainly bourbon type while robusta accounts for 3%.

Uganda

According to data from trading economics, Uganda Exports to Germany was US$88.09 Million during 2017, according to the United Nations COMTRADE database on international trade.

Burundi

For Burundi, at present it does not a significant trade partner for Germany, ranking 176th out of 234 trading partners. In 2009, imported goods from Burundi (mainly tea and coffee) were worth 18 million and German exports to Burundi were worth 10.1 million. This is according to German-Burundi Relations.

German ties with EAC

However, according to dw.com, trade relations between Germany and East Africa are generally good. West Germany was the first country to recognize Kenya after it gained independence from Britain. German President Joachim Gauck visited Tanzania in 2015. Germany and Tanzania are traditionally close. Before the end of World War I, mainland Tanzania was a German colony. In 2015, former German foreign minister Frank Walter Steinmeier also visited Kenya and Uganda and Development Minister Gerd Müller was in Kenya last year. There have also been official visits in the other direction. Last year Uhuru Kenyatta became the first Kenyan president to make a state visit to Germany since 1999. Ugandan President Yoweri came to Germany on a private trip during which he participated in a German-African Economic Forum.

The Chief Executive Officer of the German-African Business Association, Mr. Christoph Kannengiesser, said the dialogue provides an opportunity for networking and supports information exchange as well as better mutual understanding.

He urged the EAC to prioritize collaborative approaches that will see supply chains strengthened across borders and Governments laying the groundwork for the ease of movement of goods and people in the region.

The Dialogue brought together Policy-makers, experts, private sector representatives from East Africa and Germany.

“I take this opportunity to thank our partners Afrika Verein and EABC for continued good working relationship and request for further collaboration in supporting the private sector to achieve the business goals and promote the region as an ideal place to invest and do business,” said Hon. Bazivamo.

Also Read: Germany, Tanzania push for closer economic ties

Yvonne Kawira is an award winning journalist with an interest in matters, regional trade, tourism, entrepreneurship and aviation. She has been practicing for six years and has a degree in mass communication from St Paul’s University.

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