World Trade Organization (WTO) Director-General Pascal Lamy said East African governments must improve roads, ports and trade procedures if the region is to meet its full economic potential. He said specifically that border administration must be improved and there has to be cross-border recognition of technical standards.
The call of the WTO chief comes as trade partners across the globe meet in Geneva to negotiate a new World Trade Organization agreement that will harmonize and streamline customs operations.
Speaking to reporters in Nairobi Thursday, WTO Director Lamy said the five-nation East Africa Community is doing well in facilitating trade, but that the cost of moving goods across borders is too high.
“There is a huge amount of work to do, when you look at the cost of moving a container from Mombasa to Kigali or from Dar es Salaam to DRC [Democratic Republic of Congo] and you measure the relative cost, transport moving along borders. Still there is a huge amount of efficiency to gain, which will directly benefit to the development of these regions," he said.
Frank Matsaert, head of Trademark East Africa, a regional trade organization, acknowledged the cost of transporting goods across regional borders must be brought down.
“The big challenge for us in east Africa is reducing the high cost of doing business across our borders and we at Trademark East Africa are very committed to bringing down those costs by 15 percent and increasing trade," said Matsaert.
According to Tanzania Economic Update published by the World Bank, Tanzania and Kenya could boost their annual gross domestic product by up to $1.8 billion and $830 million respectively by taking measures to improve the efficiency of the ports of Dar es Salaam and Mombasa.
However, WTO Director Lamy said upgrading of ports might not improve trade if the roads are bad.
“It’s fine to improve the operation of the port of Dar es Salaam or Mombasa, but if upstream road transport is clogged it won’t have any impact on trade and it’s great to do both a port and upstream road link," he noted.
Apart from needed infrastructure improvements, east Africa states have historically been reluctant to surrender their nation’s interest for the greater interest of the East African Community.