TWO East African Community (EAC) member countries Rwanda and Tanzania have taken another important step by transforming Rusumo One Stop Border Post (OSBP) to 24 hour operation facility.
This is a milestone in scaling up the campaign on trade development, trade facilitation and investment promotion. It was all joy when the Acting Commissioner for Customs under the Tanzania Revenue Authority (TRA), George Mnyitafu launched the facility on the Tanzanian side on October 2, this year.
The Commissioner for Customs under Rwanda Revenue Authority (RRA), Raphael Tugirumuremyi, also launched the facility on the Rwandan side. Tanzania has nine OSBP facilities but only four were operating at full capacity.
They include Kabanga, Mutukula and Rusumo in Kagera Region and Holili, in Kilimanjaro Region. OSBP operating below capacity due to lack of sufficient infrastructure include Kasumuro (Mbeya), Sirari (Mara), Horohoro (Tanga), Tunduma (Songea) and Namanga (Arusha).
Speaking during the launch, Mr Mnyitafu appealed to businessmen/women to ensure tax compliance. We have to work together to find a lasting solution to economic, social and security–related matters facing people on our common borders including human trafficking and drugs trafficking.
Rwanda and Tanzania have been important trading partners and the new development will foster trade and cooperation in different aspects. He reiterated the government commitment toward strengthening relations and creating a conducive business environment to further improve trade between the two countries.
Improving business and bilateral ties between Rwanda and Tanzania will increase trade flow, will enhance economic and social development. This can be done through enhancing partnerships between business people from both countries, identifying and solving barriers faced by entrepreneurs in a timely manner, and increasing facilitation to strengthen regional trade and investment in select sectors.
Tanzania was Rwanda’s third largest trading partner in the region last year, with total trade between the two countries amounting to $68 million, down from $70.8 million in 2014. This, however, reflects a decrease of about four per cent, which experts attribute partly to challenges businesses faced while trading with their Tanzanian counterparts.
On July 1, last year President John Magufuli visited Rwanda and explained that the Tanzania Port Authority (TPA) will open an office in Kigali to promote and increase trade with Tanzania. The establishment of the Rwanda Inland Container Depot (ICD) will facilitate the handling and storage of Rwanda’s cargo, of which 70 per cent passes through the Dar es Salaam port.
During the visit, President Magufuli stressed the importance of railways for the economies of Tanzania and Rwanda. Tanzania allocated TZS1trn/- in its 2016–2017 budget for the construction of the Standard Gauge Railway (SGR) to connect the port of Dar es Salaam to Rwanda and Burundi.
The SGR is expected to further increase the cargo volume handled at the Dar es Salaam port. The railway is expected to handle minimum 8.5mt and maximum 24mt of traffic volume per year by 2029. Tanzania is Rwanda’s top export destination.
In 2014 Rwanda’s export to Tanzania amounted to USD181m, representing almost 28 per cent of the total value of Rwanda’s export. Tanzania accounts for over 4 per cent or USD80m of the total value of Rwanda’s imports.
The project for construction of Rusumo International Bridge and One Stop Border Post Facilities (OSBP), was Grant Aid from the people of Japan, as a token of friendship and cooperation between Japan and Tanzania and Rwanda.
The facilities were officially opened by President John Magufuli and his Rwandan counterpart, President Paul Kagame on April 6, last year. Dr Magufuli thanked the government of Japan through its International Aid Agency (JAICA), and the African Development Bank Group (AfDB) that financed the two projects that cost a total of 61.3bn/-on completion.
A representative of AfDB, Dr Tonia Kadiero pledged continued support to East African Community (EAC) countries for improvement of various development projects including infrastructure. She named some of the projects to include Kibuye-Mpigi road (Uganda) and Kagitumba-Rusumo (Tanzania).
The African Development Bank Group (AfDB) will support Tanzania’s economic transformation to inclusive and green growth with an indicative concessional resource assistance package estimated at over US $1.1 billion over a five-year period.
The support package is contained in the Bank’s 2016-2020 Country Strategy Paper (CSP) for Tanzania, which will guide the Bank’s operations in the country in the next five years. The CSP was approved by Bank’s Board of Directors on February 24, 2016 in Abidjan, Côte d’Ivoire.
While commending Tanzania’s robust GDP growth which has exceeded 6 per cent since 2001, the Board said future assistance would address the most pressing constraints to economic transformation and improving public sector governance to ensure value for money in public spending.
Thus, the CSP is built on two complementary support pillars– infrastructure development for inclusive and green growth; and strengthening governance and accountability for improved competitiveness.
The first pillar emphasizes support to transport and energy to promote domestic and regional transport connectivity, and improve access to reliable, affordable and sustainable electricity; while the second pillar prioritizes strengthening of financial management and improving the enabling environment for private sector investment and finance for sustainable job creation.
“Investment interventions from the Bank’s private sector window will be complementary and aimed at improving enterprise access to finance, in particular businesses engaged in smallholder agriculture, agri-business and related value-chains.
Nonlending operations will be targeted at providing capacity building, technical assistance and advisory services to improve domestic resources mobilization (DRM) and the negotiation of commercial transactions in the oil and gas sector,” according to the CSP papers presented to the Board.
In order to effectively consolidate the Bank’s contribution to Tanzania’s development, the CSP 2016-2020 introduces innovative infrastructure investments that aim at transforming operational regions into sustainable development corridors.
It also mainstreams the Bank’s 2013-2022 Ten Year Strategy priorities such as inclusive and green growth, gender equality and empowerment. It aligns the strategy with the High 5 Priorities (Light up and power Africa, Feed Africa, Industrialise Africa, Integrate Africa and Improve the quality of life for Africans) and the country’s Social Development Goals (SDGs).
Application of innovative financing instruments, such as local currency bonds and guarantees that can be used to de-risk lending to sectors like agriculture to augment African Development fund (ADF) and AfDB resources windows, also forms part of the package.
The CSP provides for a cumulative 2016-2020 indicative concessional resource envelope of US $1.1 billion (UA 791 million). Additional resources will be mobilized from the AfDB window, Africa Growing Together Fund, trust funds, renewable energy financing and co-financing with other partners.