Breakthrough as EAC sets up new portal for SMEs to sell products in the region
State Department of East Africa Community (EAC) Principal Secretary, Dr Kevit Desai , (Standing, left) looks on as Trademark East Africa Chairman Erastus Mwencha (seated Left) and Finnish Ambassador to Kenya, Erik Lundberg, sign a Sh1.4billion financial agreement at the Kenya Ports Authority on March 2 this year. The funds are to boost trade in the region.
Small and Medium-sized enterprises will soon be able to leverage the East African Community Buyer-Seller Platform to post their goods and access the regional market online.
The e-commerce platform, which has been developed but is yet to be operationalised, will contain an integrated database of manufacturers, producers, SMEs and wholesalers and their respective products, as well as logistics and service providers, and respective services. It seeks to promote intra-EAC trade and investment.
“The government in collaboration with the EAC Partner States is finalising the E-commerce strategy which will streamline movement of online traded goods across customs, harmonise payment platforms and offer regulatory support to ensure security of online transactions for SMEs,” said principal secretary in the state department of East African Community, Dr Kevit Desai in an interview with Powering SMEs.
The platform is an extension of the Common Market Initiative, established in 2010 to promote free movement of goods and people across the region. SMEs are urged to register and formalise their businesses to benefit from the platform as well as the common market.
Through the Common Market, Kenya’s exports to EAC partner states have increased by almost 25 percent in the past three years from Sh100 billion to Sh125 billion. EAC remains the largest market for Kenya’s exports in Africa and even the rest of the world. In 2020, the value of Kenya’s exports to EAC were more than twice her export value to the rest of Africa.
Busia Jumuiya market
“The Common Market has seen the establishment of common trade centres at border points which are really boosting local traders. For example, the Busia Jumuiya market, currently undergoing construction with phase 1 set to be complete early next year, will have a holding capacity of 10,000,” noted Dr Desai, adding that the EAC partner states are currently working on reviewing the EAC Common External Tariff (EAC CET) to increase duty on finished goods from 25 percent to between 30 and 35 percent to promote locally manufactured goods.
He says the review will also align the tariff structure and rates to respond to the current economic environment in EAC.
Desai notes the government has also beefed up efforts to address non-tariff trade barriers which are a big impediment to cross border trade. Such NTBs manifest themselves in form of prolonged clearance procedures, delays at the ports of entry/exit, delays at weighbridges and numerous road blocks, delays in ferrying of cargo by transit vehicles, non-recognition of EAC certificates of origin, non-recognition of quality marks issued by EAC Bureaus of Standards, re-testing of products, delays by statutory boards in releasing the results of analysis of samples and issuance of import licenses among others.
“Kenya is using mechanisms available in the community, such as NTB monitoring, to solve trade issues with partner states. In the Regional NTB monitoring committee held in October 2021, South Sudan announced a waiver of visa requirements for all East Africans, allowing Kenyans to travel to South Sudan freely for personal and business engagements,” noted Dr Desai.
The government has also adopted a schedule of quarterly bilateral meetings with Tanzania, through which 46 out of 64 contentious trade issues between the two countries have been resolved, and while it is the government’s mandate to facilitate cross border trade, the private sector will also need to play its part in ensuring it benefits from government initiatives, perhaps by creating structures that will facilitate further engagement with the public sector on a collective level.
“There is limited understanding of what EAC integration is all about, for example, many Kenyans do not understand what the Customs Union, Common Market and Monetary Union is all about. With respect to Common Market, some people think they can cross borders to sell or visit without relevant travelling or business documents,” noted Dr Desai.
“The huge market that exists should compel the private sector to create leadership structures. Yes, we have the East African Business Council but it cannot cover the entire private sector. We’ve also tried to rejuvenate the East African Manufacturers Association but they must take responsibility to ensure they create the structures for a larger market,” he added.
