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Browsing: Non-Tariff Barriers
These foreign exchange controls and restrictions will pose challenges for international businesses and foreign investors in Tanzania.
When introducing approvals and making them necessary for just about every kind of transaction, foreign exchange restrictions add a level of complexity to investors’ business model and implementation strategy.
The Tanzania Foreign Exchange Regulations require authorisations and justifications for several areas including exporting, importing or simply where a non-resident is directly investing in Tanzania.
While there could be a problem with income being paid outside of Tanzania for activities that are taking place in Tanzania, putting foreign exchange controls rarely constitutes the answer to encourage investors to keep their funds in the country.
Because EAC products have been denied preferential market access as a result of trade sanctions, intra-EAC trade is currently at a low of 15 per cent, which will worsen employment opportunities, market access, and the economies of scale of our sectors for East Africans as a whole.
NTBs not only increase the time and cost of doing business across borders, but they also reduce the competitiveness of EAC-produced goods.
NTBs persist and grow because of the lack of an effective EAC trade dispute settlement system (the EAC Trade Remedies Committee) and the poor speed of resolution of NTBs by the EAC Reginal Monitoring Committee (EMC).
The EAC region has few harmonized regional standards, lengthy harmonization process as well as low adoption rate of harmonized regional standards coupled with varying frameworks of technical regulations across partner states.
This has led to standards related to NTBs such as costly and time-consuming re-testing processes or denial of market access for certain products.
While the African Continental Free Trade Area (AfCFTA) has become a reality, developing robust infrastructure is crucial to its operationalisation and success.
For maximum benefit, member states to the trade agreement must be connected physically and digitally through hard infrastructure and connected in the harmonisation and coordination of processes through soft infrastructure.
The pact connecting 1.3 billion people across the 55 African countries with a combined gross domestic product (GDP) valued at US$3.4 trillion faces huge challenges that need quick responses. These responses range from the dependence of African economies on commodity production and exports, the lack of diversification which has caused a mismatch between supply and demand, tariffs and non-tariff barriers (NTBs), inefficient transport infrastructure and poor trade logistics to high-security risk among others.
Economic Partnership Agreements and the Continental Free Trade Area negotiations have focused on the speed at which tariffs are removed
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The tool will help African governments monitor and eliminate challenges which slow trade costing the continent billions annually