Support of Regional Business Organisations in East Africa (SRBO-EA) - a GTZ Project

1. Support of Regional Business Organisations in East Africa (SRBO-EA) - a GTZ Project Non-Tariff Barriers Monitoring Mechanism – A Regional Level Action Programme for BIC Reform GTZ Workshop Magaliesburg, South Africa, May 24, 2006

2. Overview • SRBO-Project Overview & Achievements • Non Tariff Barriers Monitoring Mechanism Process • BCI Survey Main Findings • Monitoring & Complaint Mechanism Approach • Operational Aspects • Lessons Learnt

3. SRBO-GTZ project Objectives • Institutional strengthening of EABC internal: administration, planning, management external: Positioning & PR set up • Awareness building: influence public perception on regional integration • Issue management: establish think tank and core lobby functions

4. SRBO-EA Achievements • EABC: until 2003 a one-man show with 19 fee-paying members, 20,000 US$ income p.a. • now 55 members (20 associations and 35 corporations); income 90,000.- US$ p.a. • Communication: Website, newsletters, Information dissemination to 2000 executives (leave us your business card to be included in our database) • Sensitization Roadshows on Customs Union (1500 business people) • Regular national/regional events/2 major conferences • Top Level Lobbying (meetings with Heads of State) • Munich Trade & Investment conference (75 participants from EA) • Non-Tariff Barriers Monitoring Mechanism (NTB MM)

5. Approaches to Policy dialogue at EABC • Big themes (research/working groups, lobbying, evaluation) • CU, NTB‘s, Competitiveness Alliances • Individual member issues • Regulatory process at EAC • ad hoc fire fighting & damage control • Media, EAC secretariat, national governments

6. Non Tariff Barriers Monitoring Objectives • Evidence on non-tariff barriers in day-to-day cross border trade • Perceptions on business climate in East Africa on a continuous basis • Create powerful PR instrument for benefit of EABC • Engage corporations, the public sector and the media into a continuous dialogue on business conditions in East Africa.

7. NTBs in trade – „Compensation measures” EABC has opened public debate on NTB’s in trans-border trade in a critical moment: (Customs Union started in 2001) • NTBs as “Nationalistic Compensation measures” • customs, immigration, administrative procedures and regulations, licenses, weighbridges, police roadblocks • All other factors affecting the business climate in general such as infrastructure

8. NTB MM Process

9. BCI Coverage (1) Coverage • 584 companies operating in the East Africa Region of which 195 from Kenya, 140 from Tanzania and 249 from Uganda • 62 government ministries, departments and agencies(“private sector is part of the problem”) Overall response rate • 78% (business response being 77% and government 82%) Position of respondents • 84% at the levels of senior and top management.

10. BCI Coverage (2) Sectoral Distribution of Businesses:

11. BCI Main Findings Part I(Example No. 1)

12. Main Findings Part I (Example No 2) Time for Registration & Licencing

13. Main Findings Part II (Example 1)Perceptions on Business Climate The Improvement Index EAC Comparison

14. NTB Monitoring mechanism (MM) EABC has been asked to establish an effective mechanism for the elimination of NTBs in East Africa (with respect to those identified in the BCI study and others that will come up in the future) Two elements • Agreement on NTBs as outcome of BCI and their elimination based on benchmarks • to establish an effective mechanism for channeling of company complaints, monitoring and elimination of NTB’s

15. NTB MM Approach • Consolidate baseline data • Buy-in from national level agencies: • National Plans (problem, impact, responsible, approach, benchmarks, bottlenecks, solutions) • Action planning with governments at national level (TOR, Structures, Set up, Financing) • EAC proposal adopted • Implementation started • BCI Survey No. 2 in 2006 to check on progress

16. ACKNOWLEDGED LIST OF KEY NTBS • Customs and administrative documentation procedures • Immigration procedures • Cumbersome inspection requirements • Police road blocks • Varying trade regulations among the three EAC countries • Varying, cumbersome and costly transiting procedures in the three EAC countries • Duplicated functions of agencies involved in verifying quality, quantity and dutiable value of imports and export cargo • Business registration and licensing

17. Businesses Business association of chamber of commerce National Monitoring Committee Line ministry or agency responsible for taking action on an NTB EAC Secretariat EABC EAC Sectoral Committee on Trade, Industry and Investment The EAC Co-ordination Committee NTBs reporting flow EAC Trade Remedies Committee EAC Council of Ministers NTBs feedback flow INSTITUTIONAL SET-UP FOR REPORTING AND GIVING FEEDBACK ON PROGRESS OF NTBS ELIMINATION

18. YARDSTICKS TO MEASURE IMPACT OF NTBS • Official payments • Non-official payments • Other expenses (e.g. staff costs, storage costs, etc) • Quantify lost business opportunities • Value of product waste (eg perishable goods) • Cost of time lost in understanding and complying with un-transparent procedures

19. Lessons • Regional integration: competition is key • International Benchmarking is basis • Need Credible Survey as basis (high coverage, be specific on problems, limit agenda) • NTBs: Private Sector is part of the problem • Public & Private sector as partners • NTB MM is powerful PR instrument for benefit of business associations • Overall Business climate monitoring is an attractive addition to NTB MM • NTB MM has helped to stimulate policy dialogue

20. Thank you for your attention! Busso von Alvensleben ICON GmbH Advisor, East African Business Council Support of Regional Business Organisations in East Africa (SRBO-EA) - a GTZ Project bva@eabc-online.com www.eabc-online.com