The Influence of East African Community’s Cargo Clearance Procedures on Trade Facilitation in Rwanda

Trade facilitation is any process involved in the reduction in trading costs associated with enforcement, regulation, and administration of trade policies. This process intended to lower the related transaction costs for firms in global commerce thereby enabling continued growth in cross border trade in goods and service. Trade facilitation is a diverse and challenging subject with potential benefits for both private business people and governments at national, regional and international levels. Governments initiated a trade facilitation reform programme following complaints about widespread corruption and poor administrative practices. The reform programme included the implementation of single-point clearance and mechanism, the introduction of risk assessment procedures and the publication of customs nights and responsibilities in export clearance. The empirical literature indicates that, none of the study has been conducted in Rwanda to assess how the EAC custom union procedures improved the trade facilitation in Rwanda. To conduct this kind of study is very important because it helped to describe the extent at which cargo clearance procedures, tariff charges and other institution factors influence the trade facilitation in Rwanda. Rwanda is a land-locked country, facing tremendous difficulties in accessing major markets in the regional as well as in the rest of the world. These difficulties emanated from high transport costs owing to the fact that she has no direct access to the sea. Rwanda has been continually showing deficit in export and imports compared to other neighbouring partner states in EAC. Since there is no data about the procedures and systems applied by the individual partner around the boarders/Customs in Rwanda, the study therefore intended to analyze the influence of customs union on trade facilitation for Rwanda resulted from regional integration signed by the East Africa community. The results from the survey show that 0.83% strongly disagreed, 2.51% disagreed, 0.83% was not sure, and 42.3% agreed that they appreciate the cargo clearance procedures at the customs and 53.53% strongly agreed. The results from the survey revealed that majority of the respondents appreciate the cargo clearance procedures. The results further revealed that, the few cases where there is delay in the clearance originates mainly on the description on the rules of the origin. This is because to some products it becomes hard to determine the proportion of imported material in the mixture of the manufactured products. The results from the survey revealed that before EAC, each country used different clearance documents with different way of clearing the goods and description of the goods, but ever since the establishment of the EAC, all countries use the documents and same description of the goods. This helps in simplifying the clearance procedures of the goods since every trader knows what is required. The Partner States agree to simplify their trade documentation and procedures in order to facilitate trade in goods within the Community. The results from the survey revealed that the level of bureaucracy in the clearance of goods is low as evidenced by the majority of the respondents. This helps in reducing the time traders spends at customs during clearing and hence enhancing trade within the member state.