Kenya, Uganda traders’ deal cuts transport costs

A group of cross- border small scale traders have come together to share the cost of transporting goods to various towns in the interior parts of Kenya and Uganda using hired trucks.

The move has seen individual traders pay depending on the quantity of the load instead of shouldering the all cost of hiring trucks.

Previously trucks would charge about Sh30,000 to transport goods regardless of the volumes and the destinations. After coming together, the traders who deal in small quantities of goods, now pay Sh250 per 90kg load without necessarily having to fill a truck.

“These traders deal in goods not exceeding $2,000 (Sh200,000) at a go and given their smaller volume of trade, they found it difficult to hire trucks for transport,” said Charles Achieng, Chairman of Busia Cross Border Traders Associations who is also in charge of BusiaTrade Information Desk.

About 40 trucks transport the traders’ goods to Kisumu, Eldoret, Nakuru, Nairobi or into Uganda, daily. The trucks carry about 120 bags of goods weighing 90 kilos each at a go, with a bag costing about Sh250 to transport from Busia to most destinations in Kenya.

After coming together, traders are now required to pay according to offload points along the transportation route.

“Initially, this was so costly for the traders who do not have the potential to trade in bigger volumes of products that can fill the trucks. They would be required to pay the full cost even when the trucks are half full,” said Mr Achieng.

Major goods of trade among the cross-border traders along the Northern Transport Corridor are mostly agricultural produce such as maize, beans, groundnuts, bananas, fruits, carrots, French beans, mangoes, pineapple, watermelon, Irish potato, French beans, fish and animal feeds.

They also deal in products such as timber, plastics, tiles and clothes, unprocessed rice, shoes, groceries, cosmetics, bed covers among others.

Currently, the group has about 10,000 registered members from affiliate groups and work jointly with 50,000 other small scale traders who enjoy their cross-border trade services such as document facilitations.

By consolidating the goods, the groups’ cross-border trade is now made much easier. This is helped by Trade Information Desk at the One Stop Border Post, as well as simplified customs documentation process, including quick provision of certificate of origin. The information desk collaborates with revenue authorities and standard bodies. Other import or export procedures have also been simplified.

“Most of the members of this group are not well educated or conversant with customs and immigration procedures. They therefore need assistance in such processes which ensure that no counterfeit, illicit or unauthorised goods are moved across the border,” said Mr Achieng.

The group established in 2009 works with the customs department to ensure that the consignments are moved across the border legally.

According to a 2016 research by United Nations Conference on ‘Trade and Development on Border Agency Effectiveness’, transport connectivity, quality of logistics services and border management play important roles as determinants of international trade flows.

President Uhuru Kenyatta and his Ugandan counterpart Yoweri Kaguta Museveni launched Busia One- Stop Border Post (OSBP) last year in February to enhance cross-border trader. The border post, which combines the traditional two stops for border processing into one, is also aimed at enhancing immigration clearance to ease movement of people.

“Today we are enjoying the ease of trading across the border. The time taken by traders to move goods across the two countries has tremendously reduced,” said Mr Achieng.

The OSBP, he noted, has reduced the cost of doing business, promoted cross-border trade through an improved working environment and coordinated working relationships with all border agencies and adjoining states on issues of security, standards and quality and revenues among others

The installation of non-intrusive drive-in inspection (scanner) has further cut time taken to verify goods to less than one minute, further enhancing compliance, security and eliminating damage on goods as happens during physical verifications and inspections.

"We are happy that promotion of small scale cross-border trade and regional integration is getting immense political support from the region and entire Comesa and EAC economic communities,” said Mr Achieng.

The completion of Kisumu-Busia-Kampala road, which is under rehabilitation, is expected to further cut transport costs and improve on truck turnaround time. The road is mainly used for import and export between Uganda and Kenya.

Despite the strides made in enhancing cross-border trade between Uganda and Kenya, there are still hurdles that need to be knocked down. These include lack of funding and facilitations for cross-border structures and value chain. However, efforts are being made to address the challenges.

Comesa member States under The Great Lakes Region are setting up cross-border trade structures including trade information desks.

"It is important that governments and development partners look into options of facilitating cross-border trade information desk and committee to enable them continue guiding and providing relevant trade information and services to traders,” said Mr Achieng.

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