RESEARCH - koboi Emmanuel

i
UGANDA CHRISTIAN UNIVERSITY
MUKONO
THE IMPACT OF NON TARIFF BARRIERS ON SMALL SCALE
AGRI-CROSS BORDER TRADE
BY
KOBOI EMMANUEL
S13B24/358
A RESEARCH REPORT SUBMITTED TO THE FACULTY OF BUSINESS
AND ADMINISTRATION IN PARTIAL FULFILLMENT OF THE
REQUIREMENTS FOR THE AWARD OF BACHELOR’S DEGREE IN
PROJECT PLANNING AND ENTREPRENUERSHIP AT UGANDA
CHRISTIAN UNIVERSITY MUKONO
JANUARY 2016

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DECLARATION
I, KOBOI EMMANUEL, declare that this is my original research report that has never been
submitted to any other institution of learning for any award.
Signed: …………………………………………… Date: …………………………
KOBOI EMMANUEL

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APPROVAL
I certify that this report was prepared by KOBOI EMMANUEL under my supervision and is
ready for submission with my approval.
Signed: …………………………………….. Date: ……………………………………..
MR. SSENYONDWA ALLAN
(SUPERVISOR)

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DEDICATION
I dedicate this research report to my parents Mr. &Mrs. Matsyetsye, my sisters Namono Janet,
Kibone Judith and Wolayo Joyce plus my nephew and nieces also to my friends like raighton,
Mukisa joy Nyombi, Benjamin Roy for their tireless financial, physical and moral support given
to me towards my education and to the completion of this research work in general. May God
bless them abundantly?

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ACKNOWLEDGEMENT
I take this opportunity to thank all people who made a contribution in my academic life so far. I
would like to express heartfelt gratitude to my supervisor, Mr. SSENYONDWA ALLAN whose
tireless efforts have made this dream a reality. Mr. Ssenyondwa often restored hope in me when
I felt hopeless, you invoked the hitherto hidden abilities in me; a reason I will always walk with
my head high. No amount of words can express my sincere gratitude for your unending support
during the research period. May the Lord reward your efforts? I am greatly indebted to my
colleagues and classmates; the lecturers in the faculty of Business and Administration, and the
entire staff of Uganda Christian University Mukono and to my many student colleagues (BEPP 3
2016) for your unending support in this journey.
I would like also to extend my sincere appreciation to the people who assisted me in different
ways in preparation and production of this report. Without their physical, material and moral
inputs, I would not have done much.
Finally, I also recognize the efforts put in by my family members, relatives and friends for their
moral support, financial assistance and encouragement they have always given me towards the
accomplishment of this research report.
May the Almighty God reward them all!

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LIST OF ABBREVIATIONS
ASYCUDA Automated Systems for Customs Data
COMESA Common Market for East and Southern Africa
CU Customs Union
EABC East Africa Business Council
EAC East African Community
EAGC Eastern Africa Grain Council
FAO Food and Agriculture Organization of the United Nations
GDP Gross Domestic Product
MDG Millennium Development Goals
NMC National Monitoring Committees in EAC
NTB Non-Tariff Barrier
NTM Non-Tariff Measure
OECD Organization for Economic Cooperation and Development
RATES Regional Agricultural Trade Expansion Support (USAID) Project
RATIN Regional Agricultural Trade and Information Network
ReSAKSS Regional Strategic Analysis and Knowledge Support System (ILRI) Project
SIMBA Similarity Based Complex Analysis System
TBT Technical Barriers to Trade
WTO World Trade Organization

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LIST OF TABLES
Table 1: Categories of Small & Medium Enterprises (SME's).................................................... 18
Table 2: Resource Materials to used by the researcher................................................................. 32
Table 3: the current NTB's of SMAE'S in EAC ........................................................................... 36
Table 4: The effects of Non Tariff Barriers.................................................................................. 38

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TABLE OF CONTENT
DECLARATION............................................................................................................................ 1
APPROVAL ................................................................................................................................... 2
DEDICATION................................................................................................................................ 3
ACKNOWLEDGEMENT.............................................................................................................. 4
LIST OF ABBREVIATIONS......................................................................................................... 5
LIST OF TABLES.......................................................................................................................... 6
ABSTRACT.................................................................................................................................. 10
CHAPTER ONE........................................................................................................................... 12
1.0 Introduction ...........................................................................................................................12
1.1 Background of the study.................................................................................................... 12
1.2 Statement of the problem................................................................................................... 15
1.3 General objective of the study ........................................................................................... 15
1.4 Specific objective of the study........................................................................................... 15
1.5 Research questions.................................................................................................................15
1.6 Scope of the study.............................................................................................................. 16
1.6.1 Subject scope .....................................................................................................................16
1.6.2 Time scope.........................................................................................................................16
1.7 Significance of the study.................................................................................................... 16
CHAPTER TWO .......................................................................................................................... 17
LITERATURE REVIEW ............................................................................................................. 17
2.0 Introduction ...........................................................................................................................17
2.1 Definition and Status of small scale agri cross border trade within EAC ......................... 17
2.1.1 An Overview of the Agricultural regional cross border blocs and Associations. ..................18
2.1.2 The East African Community (EAC)..................................................................................20

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2.2 The non-tariff barriers that affect agricultural trade in the East African Community....... 20
2.3 How non-tariff barriers influence small cross border trade in the East African Community.
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CHAPTER THREE ...................................................................................................................... 31
RESEARCH METHODOLOGY ................................................................................................. 31
3.0 Introduction........................................................................................................................ 31
3.1 Research design ................................................................................................................. 31
3.2 Data sources....................................................................................................................... 32
3.3 Data presentation and processing ...................................................................................... 32
3.4 Data Analysis..................................................................................................................... 33
3.5 Data quality control ........................................................................................................... 33
3.5.1 Validity and reliability........................................................................................................33
3.5.2 Coding ...............................................................................................................................33
3.6 Ethical considerations........................................................................................................ 33
3.7 Limitations of the study and resolutions............................................................................ 33
CHAPTER FOUR......................................................................................................................... 35
PRESENTATION OF RESULTS AND FINDINGS................................................................... 35
4.0 INTRODUCTION ............................................................................................................. 35
4.1 The status of small scale agri cross border trade ............................................................... 35
4.2 The types of non-tariff barriers that affect small scale agricultural cross border trade..... 36
4.3 The effects of non-tariff barriers on agricultural cross border trade.................................. 37
CHAPTER FIVE .......................................................................................................................... 39
SUMMARY, CONCLUSION AND RECOMMENDATIONS................................................... 39
5.0 Introduction........................................................................................................................ 39
5.1 Conclusions........................................................................................................................ 39
5.2 Recommendation ............................................................................................................... 40

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5.3 Recommendation for Future Research .............................................................................. 41
REFERENCES ............................................................................................................................. 42

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ABSTRACT
The study was undertaken to find out the impact of non-tariff barriers on small scale agri-cross
border trade. The East African Community (EAC) committed to elimination of non-tariff barriers
(NTBs) in order to realize the benefits of a single economic market, following gradual removal
of tariffs on intra-regional trade by signing and ratifying the EAC treaty and customs union
protocol. However, since its re-launch in 1999 numerous sources of non-tariff trade barriers
persisted to impede trade among the EAC Partner States thereby defeating the purpose and spirit
of regional integration. This study examined the impact of NTBs on cross border trade in
agricultural commodities but also most traded agricultural commodities that contributed
significantly to income generation for rural households. This study was carried out through
analysis of existing secondary data.
The objectives of this study were; to identify the status of small scale agri cross border trade, the
Non-Tariff Barriers that affect agri-cross border trade within the EAC, evaluate the how Non-
Tariff Barriers affect trade in the East African community. The results of this study identified
twelve types of NTBs and the three main ones ranked according to their statistical significance
levels were; road blocks, unclear and cumbersome documentation required of the traders and
other stakeholders as well as the unclear and varying trade regulations such as measures,
certificates, and standard and axle load requirements. It revealed that over 95 percent of
agricultural trade was carried out through informal channels due to prevalence of NTBs. This
therefore implied that NTBs caused 95 percent trade loss to the EAC region. The potential
benefits that the region stands to gain with reduction and eventual elimination of NTBs in the
region was estimated to be US dollars 20.41 trillion worth of annual trade in agricultural
subsectors.
The main causes of persistent NTBs in the region were: firstly, at regional level they include lack
of harmonized standards, lack of enforcement mechanism for harmonized issues and lack of
sufficient will power by Partner States to implement harmonized policies. Secondly, at national
level the main factors were provision of inadequate public facilities, insufficient technically
qualified staff, inadequate power supply and inappropriate clearance technology.

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Finally, the study provided trade policy recommendations to improve trade among EAC Partner
States as well as the livelihoods of the EAC citizens. The main recommendation provided was
that the Governments of the five Partner States should endeavor to enhance their will power and
commitment towards regional integration of the EAC. They should endeavor to invest in
streamlining trade and sensitization of the stakeholders since reduction and eventually
elimination of NTBs identified in this study were paramount and would reduce the costs of doing
business and contribute to the realization of increased revenues. There is need to simplify
business registration and improve the efficiency of transit agricultural goods clearance at border
points. Customs requirements should be made more transparent and clear while information
flows should be made more easily available to all stakeholders by embracing modern
technologies like ICT. Lastly, it recommended fast-tracking elimination of NTBs along major
transit routes in the EAC region and improve the efficiency aspects to facilitate trade flows in the
region by hastening the harmonization process of key trade policies.

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CHAPTER ONE
1.0 Introduction
This section discusses the background of the study, statement of the problem, purpose of the
study, objectives of the study, research questions, scope of the study, significance of the study
and conceptual flame work.
1.1 Background of the study
According to the EAC facts & figures 2014, the East African Community (EAC) is focused on
widening and deepening the integration process among the five Partner States. The entry point of
the integration process of the East African Community is the Customs Union which commenced
in 2005. The EAC entered into a fully-fledged Customs Union in January, 2010 and commenced
the implementation of the Common Market in July, 2010.
Earlier on, the EAC Heads of State at the extra ordinary Summit held in November 2007directed
the EAC Secretariat to develop a strategic framework to fast track the achievement of the
monetary union by 2012. In response to the Summit directive, the EAC Secretariat
commissioned a comprehensive study on the establishment of the East African Monetary Union
(EAMU). That study was completed in January 2010, and negotiations for the EAC Monetary
Union Protocol commenced in January, 2011. The negotiations were finalized in September,
2013, and the Protocol establishing the EAMU signed by the EAC Heads of State in November,
2013. (Ackello-Ogutu, 1996)
According to (Analysis of cross-border trade in agricultural products, Nile basin) the various
bodies in charge of cross-border trade, levy a number of non-tariff fees on agricultural products.
The fees include: value added tax (VAT); pre-shipment inspection fees; warehousing fees;
various development levies that are commodity/institution specific (e.g. for sugar, roads, and
local authorities and Kenya Airports authority in the case of Kenya). In addition, there are
several unofficial fees payable to several government officials in the form of “goodwill” (or
simply, corruption).

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The aspiration of developing countries, especially those from Africa to attain economic
development through sustainable growth, employment generation, reduction in income
inequality and poverty is linked to their interaction and integration to the global economy.
Integration of poorer countries into global market offers the opportunity and potential for rapid
growth and reduction in poverty (Martinez and Poole, 2004). Recognition and acknowledgment
have been accorded to trade as a veritable channel through which countries can interact
economically. Generally, trade has been acknowledged by many theorists; especially the
orthodox ones, to have been beneficial and countries could gain from their participation. These
theorists based their propositions on the premise that there will be trade flows among
participating countries. However, in reality, this is often not the case as there are various trade
barriers to some key exports, especially those that developing countries and particularly Africa,
has comparative advantage. As a result of these trade policies, Africa in particular, found it
difficult to take full advantage of the opportunities embedded in global trade. Among these trade
policies that inhibit trade flows among countries are the non-tariff barriers (NTBs). These non-
tariff barriers could be used in different forms depending on the wish of the trading country in
line with the World Trade Organization (WTO) requirements.
The incidences of non-tariff barriers are said to be on the increase in recent time (Martinez and
Poole, 2004; Carrere and De Melo, 2009; Kareem, 2010; World Bank, 2012, etc.). However, the
frequency of the incidences of these barriers would greatly influence the flow of goods and
services to the country.
The classical trade theories advise countries to specialize in order to realize gains from trade.
Africa’s exports during the 1950s and 1960s performed relatively well in terms of the volume
and the number of products, while the issue of trade barriers, especially non-tariff barriers to
their exports in the markets of their trading partners did not arise. As a result, Africa’s
comparative strength lay in the production of crude products that in these times attracted fewer
restrictions in the developed nations’ markets (especially in the markets of the former colonial
powers). However, from the 1970s until 2000, most of the countries of Sub-Saharan Africa
(SSA) – except for the Republic of South Africa, which faced a politically motivated trade

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embargo – experienced decades of stagnation. The tightening of internal agricultural policies that
subsidized farming in the United States, and the expanding of the European Union undermined
Africa’s comparative advantage in agricultural products in these regions of the world.
The majority of traders engaging in informal cross-border trade are women operating mainly as
small scale traders. Lack of use of formal trading systems/platforms has resulted in insignificant
impact on trade over the last decade and this has not been influenced by the regional trade policy
initiatives like EAC Customs Union Protocol. Most of the women traders do not have any
knowledge of the existence of the customs union protocol. The few who have some knowledge
on the protocol do not have confidence that it will assist them. Rather they feel that formal trade
will attract high taxation which will reduce their profits.
According to (annual cross border survey 2014) During 2014, the combined cross border trade
earnings (formal and informal) amounted to US $ 2,676.6million, of which, formal exports were
worth US $ 2,262.0 million, while informal exports accounted for US $ 414.6 million. The
overall export earnings declined by 5.4 percent in 2014, after a marginal increase in 2013 of 0.6
percent. Informal exports receipts reduced by 1.6 percent compared to a decrease of 7.2 percent
registered in 2013.
According to the EAC trade report 2014, EAC total trade with the rest of the world has been on
an upward trend and registered a growth rate of 6.5 percent to US$ 55,906.4 million in 2014
from US$ 52,501.6 million in 2013, driven by increased levels of both imports and exports.
During 2014, the EAC countries recorded a trade deficit of US$ 23,688.0 million compared to a
trade deficit of US$ 22,559.0 million in 2013.
However, the value of intra-EAC trade is reported to have decreased to US$ 5,632.9 million in
2014 from US$ 5805.6 million recorded in 2013. The composition of intra-EAC trade was
mainly dominated by agricultural commodities and manufactured goods, as has been observed
over the years.
Going forward, world merchandise trade is forecasted to grow by 3.3% in 2015 in volume terms
as output picks up slightly in both developed and developing countries.

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1.2 Statement of the problem
Economists generally agree that Non-Tariff Barriers (NTBs) are detrimental to regional trade.
NTBs diminish the potential benefits that could be derived from the trade preferences offered
through regional trading arrangements. These trade preference benefits include better access to
partner country markets, increased export volumes and prices, improved economic welfare,
creation of more jobs, and attainment of higher rapid economic growth.
Moreover, NTBs are a serious impediment to the growth of intra-regional trade and the
associated benefits (Karugia et al., 2009). However, despite the efforts of the East African
Community and customs union protocol, little has been done to assess the economic effect of the
existing NTBs on Small scale Agro-Enterprises which are engaged in East African Community
cross border trade. With this study, it could be used in policy making by government and private
sector in promoting Agribusiness trade in East Africa Community region.
1.3 General objective of the study
The purpose of the study is to find out the impact (implications) of non-tariff barriers on small
scale agri-cross border trade.
1.4 Specific objective of the study
i. To identify the status of small scale agri cross border trade
ii. To identify the non-tariff barriers that affect cross border trade in the East African
Community.
iii. To examine how non-tariff barriers, influence small scale cross border trade in the East
African Community.
1.5 Research questions
i. What is the status of small scale agri cross border trade in the East African Community?
ii. Which non-tariff barriers affect small scale agri-regional cross border trade in the East
African Community?
iii. How do non-tariff barriers influence small scale agricultural cross border trade in the East
African Community?

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1.6 Scope of the study
The study involves a geographical scope (case study area), subject scope and time scope as
explained below.
1.6.1 Subject scope
The study covers non-tariff barriers as an independent variable and small scale agri-cross border
trade as a dependent variable.
1.6.2 Time scope
The study is carried out for a period of four months starting in January to April, for collecting,
analyzing and evaluating data in relation to the topic of study.
1.7 Significance of the study
The study will be utilized in the following ways;
 The research acts as a pre-requisite for each of the researchers at the University for
attaining the award of a bachelor’s degree of project planning and entrepreneurship at
Uganda Christian University.
 The study may also enrich the work of future researchers as it could be used as a
reference source to build on their work so as to come up with better information.

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CHAPTER TWO
LITERATURE REVIEW
2.0 Introduction
This chapter presents reviews, findings from different authors, publications, websites, and other
sources as the basis foundation for this research study. It includes definition of the key variables
of the study in relation with the research objectives and questions generated for the study as
shown below.
2.1 Definition and Status of small scale agri cross border trade within EAC
Small and Medium agro enterprises are a form of business organization with different levels of
the total number of employees, the total investment and sales turnover which, according to the
SME’s Policy of (2002), are categorized into micro enterprises which either engage up to 4
people, (in most cases family members) or employ capital amounting up to shs.5.0 million.
Majority of micro enterprises fall under the informal sector. Small enterprises are mostly
formalized undertakings which either engage between 5 and 49 employees or have capital
investment of between shs.5 million and shs.200 million. Medium enterprises which either
employ between 50 and 99 people or use capital investment of from shs.200 million to shs.800
million. In this context, the study adopts the definition that Small and Medium Agro Enterprises
(SMAEs) are the type of enterprises that deal with agricultural products from post harvesting to
the market.
The types of employees involved in this kind of enterprises are temporary employees specifically
used to load and unload bags of agricultural goods, packing, and driving trucks.

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Table 1: Categories of Small & Medium Enterprises (SME's)
Category No of Employees Capital investment in Machinery
Micro enterprise 1-4 Up to 5 mil.
Small enterprise 5-49 Above 5 mil. to 200 mil.
Medium enterprise 50-99 Above 200mil. to 800mil.
Large enterprise 100+ Above 800 mil.
Source: URT: Small and Medium Enterprises Development Policy. 2002
2.1.1 An Overview of the Agricultural regional cross border blocs and Associations.
There are three important regional blocs in Eastern and Southern Africa: the Common Market for
Eastern and Southern Africa (COMESA), the East African Community (EAC) and the Southern
African Development Community (SADC), which have significant differences in terms of
market integration. Recently, the COMESA customs union entered into force in June 2009.
However, the EAC members of COMESA (Kenya, Uganda, Rwanda, and Burundi) did not join
the union, stating they have not yet agreed to join the customs union and still need more time to
consult. Once again the problem here is duplication of membership. As the EAC has already
established a customs union in 2005, it is not possible to join another customs union (unless the
tariffs are the same). 11 SADC member states, including Tanzania, launched the SADC Free
Trade Area (FTA) in 2008. The FTA aims to abolish customs duties on 85% of all goods by the
end of the year; duties on the remaining 15% are due to be eliminated by 2012. However, out of
SADC’s 14 member states, the Democratic Republic of the Congo and Angola are not part of the
free trade zone.
On 22 October 2008, EAC, SADC and COMESA held a summit in Kampala, at which a
resolution was passed, creating a free trade zone consisting of member countries of all three
blocks. The proposed free trade zone would comprise 527 million citizens in 38 countries and
extend from the Mediterranean to the Cape of Good Hope. The three blocs have since set up a
Tripartite Task Force to spearhead all coordination processes. The removal of non-tariff barriers
to trade is a key component of this new initiative. Other areas of cooperation for the three blocks
are in sectors such as infrastructure development, energy, investment promotion and air transport
liberalization. This recent initiative was developed to tackle the problem of multiple

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memberships of individual countries in different regional organizations, a prime factor that is
currently hampering the integration process. Of the 26 member states of COMESA, EAC and
SADC, 13 are members of two organizations. However, membership in more than one customs
union is by definition not possible, unless the different customs unions agree upon common
external tariff rates.
The negotiations with the European Union (EU) to create Economic Partnership Agreements
(EPAs) make the issue more complex, since the EPA country groups are not identical to the
regional organizations. The EAC is the only REC in Africa to have concluded an EPA with the
EU. However, this is not a fully-fledged EPA and is confined to issues of market access and
investment and is still subject to additional negotiations. The development dimension that was
originally part of the EU’s EPA concept is to be incorporated as part of these additional
negotiations. (Christoph Pannhausen, 2010)
An important factor to be considered when assessing the volume of agricultural trade within the
region is its high level of informality. According to estimates by ministries and industry
associations, about 80% of trade 2 in agricultural produce and food in the region is informal and
not statistically recorded. For example, 400,000 head of livestock are apparently traded
informally each year between Kenya and Tanzania. This informal trade is known in the region as
‘Panya Road’ (mouse road). The main reasons for it seem to be the complicated approval
procedures, poor management of transport and logistics infrastructure and border controls that
make official trading practically impossible, particularly in the case of small consignments of
goods or perishable products. Statutory regulations, standards and harmonization efforts within
Regional Economic Communities (REC) do not apply here.
There are efforts to establish regular monitoring mechanisms to estimate the volume of the
informal trade of grains in East Africa. It is estimated that the informal maize trade from Uganda
and Tanzania to Kenya was 170,000 tons from January to July 2009. Moreover the Ugandan
informal trade of beans to Kenya is significant, estimated at about 83,000 tons in the same period
(EAGC-RATIN 2009).
Maize trade, the main staple food in the region, evens out the different production potentials in
the regions. For instance, Kenya receives large shares in ‘normal’ years from its neighbors
Tanzania and Uganda (FEWSNET 2009). However, the situation differs due to changing
climatic or political circumstances.

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2.1.2 The East African Community (EAC)
The East Africa Community (EAC), is an intergovernmental regional body comprising of five
countries with a combined population of more than 130 million and average annual growth rate
of 2.6% according to the facts and figures of the East Africa Community Secretariat
(EAC, 2012).The main agenda of EAC is attainment of economic, social and political
integration, this market provides the opportunity for the countries of Eastern African
region to exchange their locally produced goods and services so as to scale up regional
development and alleviate poverty. The EAC Development strategy (2001) identified non-
tariff barriers (NTB’s) related to administrative and bureaucratic inefficient, standards and
technical requirements as the major impediments to trade within the region; other factors include
poor infrastructure and communication networks. As for trade restrictions, the EAC committed
itself to promoting projects and strategies that would lead to the elimination of these obstacles
to trade (Hangi, 2010).
As part of the process of realizing full benefits of economic integration, in 2005, the EAC
became a customs union, a free trade area with common external tariffs, but allowing
member countries to use different import quotas. The main instrument for trade liberalization
provided under the customs union is the elimination of tariffs and non-tariff barriers (NTB),
within the partner states in order to increase economic efficiency and create political and
cultural relationships among the partner states (Okumu et al., 2010).However Africa has
the lowest levels of formalized intra-regional trade in the world, estimated at only 10 %.
Addressing this by building on current regional integration agendas to facilitate cross-border
trade, develop regional infrastructure is important to build a sustainable agri-food sector
that is responsive to regional demand (European Union, 2013).
2.2 The non-tariff barriers that affect agricultural trade in the East African Community
According to EABC (2010), WTO (2010), Mehta (2009), Beghin (2006), Fugazza and Maur
(2006), (Deardorff, 1997) Non-Tariff Barrier refers to a wide and heterogeneous range of policy
interventions, other than border formal tariffs, that negatively affect and distort trade of goods,

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services and factors of production. This includes quantitatively calculated restrictions and
specific limitations that act as obstacles to trade, restrict trade flows at local, national and
international levels. In essence a Non-Tariff Barrier means any import and export trade
restriction barrier. A barrier means prevention of something – in this case trade prevention while
on the other hand, trade measure refers to any policy that distorts trade in both positive as well as
negative ways. Mehta (2005) illustrates that export subsidies and agricultural production
subsidies do not prevent trade and therefore cannot realistically be termed as barriers although
they distort it in an asymmetrical positive tilt to cause an unfair competitive edge for increased
production. This is therefore not an NTB but a trade measures.
Jensen and Keyser (2010), (sandre, 2008) and Mehta (2005) in their analysis demonstrated that
even though there was no single internationally agreed list of NTMs (or NTBs) they had become
the subject of increasing attention and interest among policy makers and trade negotiators. NTBs
targeted public policy intervention directed at protecting domestic industries, national health,
safety and security as well as revenue sources. (Melo, 2009), Summer et al., (2001) postulated
that NTBs were often applied along the transit route and at border posts, often for purposes of
revenue collection, safe guarding health, security purposes, protection of local producers against
foreign producers, and environmental concerns. They included but not limited to quotas, levies,
embargoes, sanctions that restrict smooth flow of goods and services between the provider and
the consumer. They commonly appear in the form of rules, regulations, laws, practices and
requirements that negatively impact on trade.
According to Okumu and Nyankori (2010), the main features of Non-Tariff Barriers were that
they generally discriminate against foreign competitors in favor of domestic industries; they had
the potential to increase the price or cost of imports and cross-border trade transactions there by
affecting the demand and supply of goods, efficiency of operations and the welfare of the
consumers; unlike tariffs, the impact of Non-Tariff Barriers on prices and quantity was difficult
to discern; and that not all Non-Tariff Barriers were necessarily illegal since some of them were
justified for purposes for which they were meant to achieve namely; health, safety and security
of animals and humans or environmental protection. For such cases, rules and guidelines were
necessary to define the conditions under which such trade-restrictive measures were allowed. An

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important observation to note was that NTBs were frequent and often found in different forms all
over the world.
Okumu and Nyankori (2010) and WTO (2010) argued that both global trade between countries
and economic integration have been increasing and likewise the number of NTBs have been
increasing. Scholars adopted a classification of NTMs proposed by the World Trade
Organization that consisted of seven broad categories: Government Participation in Trade,
Customs and Administrative Entry Procedures, Technical Barriers to Trade, Sanitary and Phyto-
Sanitary Measures, Charges on Imports, Specific Limitations and many others. NTBs (otherwise
also known as NTMs) were often defined by what they were not (i.e. as all measures except
tariffs). They were broadly defined as any measure that causes trade distortion but was not a
tariff whereby a distortion existed when the domestic price differed from the border price. These
included export restrictions and export subsidies and any other distortion. If the measure was
imposed explicitly to protect domestic industry by restricting import demand, it is known as a
Non-Tariff Barrier (NTB). They also include internal(behind the border) measures such as
production subsidy and the many jurisdiction and administrative measures covered under the
Trade Facilitation negotiations of the WTO DohaRound. (Okumu, 2014)
Sandreyet al., (2008) argued that increasingly, NTBs replaced tariff barriers particularly among
trading countries involved in regional integration when tariffs were eliminated because this
causes increasing attention among policy makers and trade analysts. This is due to the fact that
elimination of tariffs imposed economic costs to exporters whereas NTBs increased import costs
to the country of consumption. Moreover, they were a source of legal controversy among trading
partners due to their implications on trade as well as their legitimacy. As trade regulations, other
than tariffs, which informally restricted international trade, NTBs were reported to fall in three
broad categories, namely: Trade policy NTBs which include broader policy measures such as
import licenses, import quotas, trade remedies and subsidies; Health, safety and environmental
NTBs which includes sanitary and phyto-sanitary standards and export bans; and administrative
NTBs that includes customs clearance delays, bureaucratic and arbitrary documentation
requirements, and high transport charges. Unlike formal trade tariffs, NTBs were often more
difficult to detect because they were “hidden and unwritten,” initiatives, rules and practices that

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had a perfectly legitimate objective. Depending on the nature of trade, commodities involved and
trading partners, different NTBs had different implications and therefore the best approach to
analyze their impact was to embrace their diversity. (sandre, 2008)
The NTBs comprise a wide range of trade policy practices applied by governments, whose main
aim is usually to restrict trade flows in order to achieve specific aims such as protection of infant
industry, reduction in domestic supply of staple food stuff such as maize, or consumer
protection. The main convenience of NTBs is that they can be imposed and removed simply
through gazette notices or through executive pronouncements and their contestations for example
from those who stand to lose (either within the country or from trading partners) is quite often
futile as the strategies can readily be justified from the point of view of the country imposing
them or they can easily be disguised. Furthermore, NTBs, as demonstrated below, can arise from
unofficial actions of public officials (due to inefficiency or corruption in administration of
customs duties) or from the state of technology (e.g. inability to innovate in terms of
telecommunication and management and information systems) or simply due to poor roads and
marketing infrastructure.
Currently, there are four border points from Uganda to Kenya in the trade of beans, potatoes,
maize and fruits and vegetables. They include Suam in Kapchorwa, Lwakhakha in Mbale,
Malaba in Tororo and Busia border. (Nile Basin Initiative Analysis).Several non-tariff barriers
(NTBs) continue to persist in the Nile Basin despite efforts of the regional economic
corporations (RECs) aimed at fast-tracking customs unions. The NTBs comprise a wide range of
trade policy practices applied by governments, whose main aim is usually to restrict trade flows
in order to achieve specific aims such as protection of infant industry, reduction in domestic
supply of a staple foodstuff such as maize, or consumer protection. The main convenience of
NTBs is that they can be imposed and removed simply through gazette notices or through
executive pronouncements and their contestations for example from those who stand to lose
(either within the country or from trading partners) is quite often futile as the strategies can
readily be justified from the point of view of the country imposing them or they can easily be
disguised. Furthermore, NTBs, as demonstrated below, can arise from unofficial actions of
public officials (due to inefficiency or corruption in administration of customs duties) or from the

24
state of technology (e.g. inability to innovate in terms of telecommunication and management
and information systems) or simply due to poor roads and marketing infrastructure.
Due to these characteristics of NTBs their existence can easily defy the efforts aimed at freeing
cross-border trade and this is proving to be a major challenge for policy makers and small traders
who often lack the clout necessary for seeking redress for the implied high transactions costs and
reduced gains from trade.
cross-border trade and this is proving to be a major challenge for policy makers and small traders
Beans traders pay high clearance fees which force most of them to resort to informal crossing
routes. At Busia border point, customs officials have gone even further to impose local taxes at
these informal crossing points thus increasing trading costs for small traders. Along DRC–
Rwanda border traders dealing with fruits and vegetables are faced with a problem of multiple
tax collectors most of whom do not issue receipts and if they do they are fake hand written
papers to justify payment. Women are the majority of people who trade along this border and
they are usually exposed to discrimination and harassment from officials: delays, sexual
harassment, acts of violence, rude behavior and threats of undisclosed fines.
The current tariff barriers refer to category B products(i.e. products that are considered
particularly sensitive to competition from other countries, including for example agricultural
products and various manufactured goods), which were granted asymmetrical tariff liberalization
among the EAC partner states, that is, Uganda and Tanzania on Kenyan products. Regional
economic communities are bent on pursuing integration through free trade and developing
Customs Unions, Monetary Unions and Markets (Anyanwu, 2014).

25
2.3 How non-tariff barriers influence small cross border trade in the East African
Community.
Non-tariff barriers are instruments of trade policy measures that are used to regulate the flow of
trade in trading countries. They are non – price trade policy instruments. The incidences of non-
tariff barriers are said to be on the increase in recent time (Martinez and Poole, 2004; Carrere and
De Melo, 2009; Kareem, 2010; World Bank, 2012, etc). However, the frequency of the
incidences of these barriers would greatly influence the flow of goods and services to the
country.
Integration of poorer countries into global markets offers the opportunity and potential for rapid
policies that inhibit trade flows among countries are the non-tariff barriers (NTBs). These non
The classical trade theories advise countries to specialize in order to realize gains from trade.
Africa’s exports during the 1950s and 1960s performed relatively well in terms of the volume
and the number of products, while the issue of trade barriers, especially non-tariff barriers to
their exports in the markets of their trading partners did not arise. As a result, Africa’s
comparative strength lay in the production of crude products that in these times attracted fewer
restrictions in the developed nations’ markets (especially in the markets of the former colonial
powers). However, from the 1970s until 2000, most of the countries of Sub-Saharan Africa
(SSA) – except for the Republic of South Africa, which faced a politically motivated trade
embargo – experienced decades of stagnation. The tightening of internal agricultural policies that

26
subsidized farming in the United States, and the expanding of the European Union undermined
Africa’s comparative advantage in agricultural products in these regions of the world.
In the 2014 world trade organization report, different economies by size of merchandise trade
indicated that developing countries (economies) had a 41% share of world merchandise trade and
34% of total trade in commercial services.
Currently, there are four border points from Uganda to Kenya in the trade of beans, potatoes,
maize and fruits and vegetables. They include Suam in Kapchorwa, Lwakhakha in Mbale,
Malaba in Tororo and Busia border.(Nile Basin Initiative Analysis).Several non-tariff barriers
(NTBs) continue to persist in the Nile Basin despite efforts of the regional economic
corporations (RECs) aimed at fast-tracking customs unions. The NTBs comprise a wide range of
trade policy practices applied by governments, whose main aim is usually to restrict trade flows
in order to achieve specific aims such as protection of infant industry, reduction in domestic
supply of a staple foodstuff such as maize, or consumer protection. The main convenience of
NTBs is that they can be imposed and removed simply through gazette notices or through
executive pronouncements and their contestations for example from those who stand to lose
(either within the country or from trading partners) is quite often futile as the strategies can
readily be justified from the point of view of the country imposing them or they can easily be
disguised. Furthermore, NTBs, as demonstrated below, can arise from unofficial actions of
public officials (due to inefficiency or corruption in administration of customs duties) or from the
state of technology (e.g. inability to innovate in terms of telecommunication and management
and information systems) or simply due to poor roads and marketing infrastructure.
cross-border trade and this is proving to be a major challenge for policymakers and small traders
According to (Analysis of cross-border trade in agricultural products, Nile basin) the various
bodies in charge of cross-border trade, levy a number of non-tariff fees on agricultural products.
The fees include: value added tax (VAT); pre-shipment inspection fees; warehousing fees;
various development levies that are commodity/institution specific (e.g. for sugar, roads, local

27
authorities and Kenya Airports authority in the case of Kenya). In addition, there are several
unofficial fees payable to several government officials in the form of “goodwill” (or simply,
corruption).
Beans traders pay high clearance fees which force most of them to resort to informal crossing
routes. At Busia border point, customs officials have gone even further to impose local taxes at
these informal crossing points thus increasing trading costs for small traders. Along DRC–
Rwanda border traders dealing with fruits and vegetables are faced with a problem of multiple
tax collectors most of whom do not issue receipts and if they do they are fake hand written
papers to justify payment. Women are the majority of people who trade along this border and
they are usually exposed to discrimination and harassment from officials: delays, sexual
harassment, acts of violence, rude behavior and threats of undisclosed fines.
The aspiration of developing countries, especially those from Africa to attain economic
development through sustainable growth, employment generation, reduction in income
inequality and poverty is linked to their interaction and integration to the global economy.
Integration of poorer countries into global market offers the opportunity and potential for rapid
policies that inhibit trade flows among countries are the non-tariff barriers (NTBs). These non

28
The incidences of non-tariff barriers are said to be on the increase in recent time (Martinez and
Poole, 2004; Carrere and De Melo, 2009; Kareem, 2010; World Bank, 2012, etc). However, the
frequency of the incidences of these barriers would greatly influence the flow of goods and
services to the country.
The majority of traders engaging in informal cross-border trade are women operating mainly as
small scale traders. Lack of use of formal trading systems/platforms has resulted in insignificant
impact on trade over the last decade and this has not been influenced by the regional trade policy
initiatives like EAC Customs Union Protocol. Most of the women traders do not have any
knowledge of the existence of the customs union protocol. The few who have some knowledge
on the protocol do not have confidence that it will assist them. Rather they feel that formal trade
will attract high taxation which will reduce their profits.
According to (annual cross border survey 2014) During 2014, the combined cross border trade
earnings (formal and informal) amounted to US $ 2,676.6million, of which, formal exports were
worth US $ 2,262.0 million, while informal exports accounted for US $ 414.6 million. The
overall export earnings declined by 5.4 percent in 2014, after a marginal increase in 2013 of 0.6
percent. Informal exports receipts reduced by 1.6 percent compared to a decrease of 7.2 percent
registered in 2013.
According to the EAC trade report 2014, EAC total trade with the rest of the world has been on
an upward trend and registered a growth rate of 6.5 percent to US$ 55,906.4 million in 2014
from US$ 52,501.6 million in 2013, driven by increased levels of both imports and exports.
During 2014, the EAC countries recorded a trade deficit of US$ 23,688.0 million compared to a
trade deficit of US$ 22,559.0 million in 2013.
However, the value of intra-EAC trade is reported to have decreased to US$ 5,632.9 million in
2014 from US$ 5805.6 million recorded in 2013. The composition of intra-EAC trade was
mainly dominated by agricultural commodities and manufactured goods, as has been observed
over the years.
Going forward, world merchandise trade is forecasted to grow by 3.3% in 2015 in volume terms
as output picks up slightly in both developed and developing countries.

29
The key theme of the workshop on the “Use and Impact of Trade and Domestic Policy
Interventions on Cereal Value Chain Stakeholders in Eastern and Southern Africa” organized in
Jun 2009 in Dar es Salaam by the Eastern Africa Grain Council (EAGC) in collaboration with
FAO and the Swedish International Development Agency (SIDA). Six country studies
commissioned by FAO during 2008 (South Africa, Zambia, Kenya, Malawi, Tanzania and
Mozambique) were presented at the meeting. These studies reviewed trade and other associated
policies in the six countries and one of the main findings was the predominant role of “pricing
and marketing policies” as the most widely used instruments to encourage production of, and
influence trade in maize. These policies were seen as increasing uncertainty and reducing
incentives for stakeholders to invest in and use alternative market based risk management
mechanisms.
It is therefore not surprising that governments may wish to supplement such informal risk
management mechanisms (non tariffs) with national policies – developing countries are no
different in this regard from developed ones. However, countries that cannot afford to maintain
expensive safety nets (like the European Union’s Common Agricultural Policy) instead tend to
rely on border measures – in particular, trade measures such as the discretionary use of import
licensing and export bans – as well as marketing board interventions. The latter, though they
were extensively curtailed under the Structural Adjustment Programs of the 1990s, appear to
have grown in scope and influence since the turn of the millennium.
Due to under-resourcing of statistical and monitoring agencies, these trade measures have often
not been supported by sound intelligence on the actual state of grain markets, and more
importantly, are often based on a poor understanding of grain market functioning. Several
researchers have argued that such interventions can be counter-productive, exacerbating the risks
faced by participants in the grain value chain, not to mention consumers – especially the poorest
amongst them.3 Evidence from various East and Southern African countries shows that maize
prices are generally more unstable in countries that pursue interventionist policies and restrict
grain trade than in those with open borders.4 Similarly, maize prices are less predictable where
countries apply restrictions to grain trade, as compared to countries with open border policies.
This indicates a prima facie case for improving government-private sector coordination to
improve market functioning and reduce price instability.

30
The urgency of improved policy in this regard is heightened by the rising food prices of late.
These have been a major cause for concern as these impinge on food security. A sudden surge in
food prices has increased the number of poor people globally, though the impacts have differed
across various countries. A recent study5 estimates that between June and December 2010, the
average poverty changed by 1.1 percentage points in low income countries and 0.7 percentage
points in middle income countries and there was a net increase of 44 million people falling below
the US$ 1.25 per day extreme poverty line. The achievement of the Millennium Development
Goals will remain a dream if food insecurity continues worsening.
Generally, the average retail market prices for maize flour, rice and beans declined while that of
beef increased by 3.0 percent in 2014. Notably, the average price of maize flour for all Partner
States dropped from US$ 0.76 in 2013 to US$ 0.63 in 2014 as indicated in Table 4.1C. EAC
facts & figures 2014

31
CHAPTER THREE
RESEARCH METHODOLOGY
3.0 Introduction
This chapter includes the description of how the study was conducted. It highlights the research
design, focus population, sampling design and size, data collection instruments, data analysis,
interpretation and limitations of the study.
3.1 Research design
The aim of this study is to determine the impact of non-tariff barriers on small scale agri-cross
border trade. The researcher used a descriptive and analytical study design, where qualitative and
quantitative approaches were applied cross section ally. The descriptive approach was used to
identify and lay down the current phenomena of NTBs across EAC borders and to obtain
information on characteristics of participants/small scale agri-traders. The researcher will use the
content analysis research design since it focuses on a particular problem within a limited time
frame and will help to locate any other factors that may affect small scale cross border trade.
Content analysis has been defined as a systematic, replicable technique for compressing many
words of text into fewer content categories based on explicit rules of coding (Berelson, 1952)
Content analysis will be used because it is a reliable method of analyzing cognitive schemes and
lastly it will enable the researcher to construct large samples. Qualitative method will be used to
focus on people’s attitudes, perception, opinions and feelings about the problem whereas
quantitative method will be used to obtain and analyze numerical data and to quantify other
variables.
The researcher will determine the authorship and one way of doing that will be through
compiling a list of suspected authors, examine their prior writings, and correlate the frequency of
nouns or function words to help build a case for the probability of each person's authorship of the
data of interest. Additionally, content analysis provides an empirical basis for monitoring shifts
in public opinion. Data collected from the mission statements project in the late 1990s can be

32
objectively compared to data collected at some point in the future to determine if policy changes
related to standards-based reform have manifested themselves in school mission statements.
3.2 Data sources
Only secondary data will be used. This is the type of data that has been already collected and
readily available from other sources.
The researcher will read internal reports and manuals from Ministry of East African Community
Affairsrecords, text books , journal news papers, and un published research reports to get
secondary data more so she will also rely on internet for data. This literature will be found in
libraries at the University. This will be considered in order to bring about a comparision between
the past researchers and the researh in question.
The researcher will consider a number of articles and pdfs to use as listed below;
Table 2: Resource Materials to used by the researcher
Materials Number
Books 2
Pdfs 15
News papers articles 2
Organization articles 2
Total 21
3.3 Data presentation and processing
Data was edited, coded and tabulated for completeness, accuracy, easy interpretation and
understanding of the findings. The researcher transformed the available information into a more
presentable form through presentation of data in either tables or charts in order to number and
identify the data for easy interpretation. The researcher used tabulation in order to summarize

33
results in form of statistic tables which involve statistical methods like percentages, frequencies,
mean, that revealed the clarity and precision with which numerical data was presented.
3.4 Data Analysis
Under content analysis, the researcher will carry out a word-frequency count. The assumption
made is that the words that are mentioned most often are the words that reflect the greatest
concerns. The researcher will also use a consolidated checklist to independently apply coding.
3.5 Data quality control
3.5.1 Validity and reliability
Data Reliability refers to the consistency of a measure. A test will be considered reliable if the
same result were got repeatedly. For example, a test will be designed to measure a trait (such
as attitude), then each time the test were administered to a subject, the results should be
approximately the same. Though it may be impossible to calculate reliability exactly, it will be
estimated in a number of different ways.
3.5.2 Coding
This was done to ensure that all information obtained from various sources was given codes and
classified into meaningful forms for better analysis.
3.6 Ethical considerations
It was important during the process of research for the researcher to make respondents
understand that the information being collected or generated from them is entirely for a genuine
cause, which is, “basic research”. Accuracy and honesty during the research process was very
important for academic research to proceed. The researcher treated the study with utmost care, in
that there was no temptation to cheat and generate research results since it jeopardizes the
conception of the research.
3.7 Limitations of the study and resolutions
In the process of carrying out this investigation, a number of limitations were met. These
limitations are obstructing the speed at which the study will be carried out. These include;

34
Time: The research might be constrained by time since it will be carried out alongside studies yet
the researcher will have course works and tests to do. The researcher will ensure that she
manages her time appropriately by foregoing luxury for the sake of completing her research.
Weather; the weather may not be favorable during the research as it might rain and disorganize
the researcher’s study. The researcher will make sure she uses an umbrella and a bag to safe
guard the documents for research from getting spoilt.

35
CHAPTER FOUR
PRESENTATION OF RESULTS AND FINDINGS
4.0 INTRODUCTION
This chapter presents, discusses and examines the findings on the study about the impact of non-
tariff barriers on small scale agri-cross border trade. This presentation is guided by the study
objectives, namely:
i. To identify the status of small scale agri cross border trade
ii. To identify the non-tariff barriers that affect cross border trade in the East African
Community.
iii. To examine how non-tariff barriers, influence small scale cross border trade in the East
African Community.
4.1 The status of small scale agri cross border trade
The Small and Medium Agro-Enterprises (SMAEs) engaging in East Africa Community (EAC)
cross border trade and Ugandan Small and Medium Agro-Enterprises engaged in the domestic
trade of the same commodities are significantly different in terms of education, the amount of
capital and the profits earned. SMAEs who export to EAC countries were found to be more
educated, have higher capital and earn more profit, which is not the case with those who trade
the same commodities locally within the country.
The results show that for the SMAEs exporting agricultural goods to EAC partner states, maize
was found to have the greatest Net Present Value followed by rice and then beans. This is
because maize is the main staple food in the region and maize is a major source of food
in the region therefore most of the farmers grow the crop since it requires short period of time
to mature compared to other food crops, also its constant demand in the EAC market
encourage many farmers to grow the crop for cash and for food. More over Net Present

36
Value for maize for SMAEs exporting to EAC partner states is higher than that of the crop for
SMAEs who trade locally within the country (mukuna, 2014)
4.2 The types of non-tariff barriers that affect small scale agricultural cross border trade
Below are the different types of Non-Tariff Barriers that affect agricultural trade within the EAC
are presented in Table 3 and are quantified as selected from a total of 10 pdf documents and are
ranked in order of importance. The three most significant NTBs were analyzed further after table
3:
Table 3: the current NTB's of SMAE'S in EAC
NO. NAME OF NON TARIFF BARRIER
1 Number of police road blocks as a constraint to trade.
2 Languages in use across borders and Time taken to
clear cargo.
3 Duplication of functions.
4 Unclear and cumbersome documentation requirements.
5 Unclear and varying trade regulations e.g Axle load
control, rules of origin, multiple inspection e.t.c
6 Varying border/transit procedures including
immigration, customs and administrative procedures.
7 Business registration and licensing procedures
8 Weigh bridges and bribery.
9 Number of officials to contact at transit points.
10 Ignorance for transit requirements on 1-7 issues.
11 Insecurity on roads.
12 Poor infrastructure including electronic clearance
system (SIMBA), power supply, cargo scanners, state
road & railway networks.
13 Other country transit fees, lack of parking space e.t.c.

37
Source: Musebe: impact of non-tariff barriers. (2013)
The expectations that EAC-CU would foster agricultural production in response to intra-regional
competition among businesses enhance domestic, cross-border trade would not be realized until
the question of NTBs was resolved.
Numerous NTBs affecting agricultural trade in the EAC region were identified and broadly
categorized into six groups that included; Roadblocks, duplication of functions and roles
encountered at six key areas in the cause of cargo verification for quality inspection as well as
dutiable value identified as; roadblocks, clearance agents, customs clearance at loading points,
transit clearance custom points, weigh bridges and mobile traffic police checks. This was mainly
attributed to lack of effective laboratories established to carry out the verification of cargo for
quality to guard against alterations as well as guard against malpractices and ensure temper proof
of quantity along the transit routes and theft of cargo.
The third most important NTB was unclear and varying Trade regulations such as certificates,
quality control requirements; un harmonized axle load control, application of the rules of origin,
treatment of other EAC citizens, and others. In addition, this was complicated further by a related
category reported as unclear and varying business registration and licensing procedures. Business
registration in all the five Partner Sates lacks transparency, cumbersome and varies a lot from
one country to another. This caused a lot of confusion, delayed business and waste of time.
Consequently, this increased the need for bribery and cost of trade.
4.3 The effects of non-tariff barriers on agricultural cross border trade.
The most notable Impact of NTBs was identified as being: firstly, massive restriction of trade
and therefore the net effect amounted to reduced trade both in volumes and monetary value in
any specified time period. Secondly, cumbersome bureaucratic import and export procedures
inhibit formal trade while enhanced informal trade. Thirdly, inadequate and un-harmonized
policy interventions in the markets tended to distort prices thus causing informal border trade to
thrive. Fourthly, Massive congestion reduced truck flows into as well as out of border points

38
causing difficulties maneuvering around the borders and cargo evacuations from cargo clearance
points.
This resulted into delays lasting from several hours to days that contribute to increased costs.
Lastly, bribery and corruption at the weighbridges, road blocks and customs areas and hence
increased the cost of doing business. Thus, NTBs were undesirable and expensive to the region
and all efforts should be directed towards eliminating them completely in the long run but in the
short run effects of NTBs should be reduced at all costs.
Table 4: The effects of Non-Tariff Barriers
NO. NAME OF NTB EFFECT ON TRADE
1 Number of police road blocks as a constraint to trade. Causes delay
2 Languages in use across borders and Time taken to
clear cargo.
Reduces trade
3 Duplication of functions. Causes delay
4 Unclear and cumbersome documentation requirements. Causes bribery
5 Unclear and varying trade regulations e.g Axle load
control, rules of origin, multiple inspection e.t.c
Causes bribery
6 Varying border/transit procedures including
immigration, customs and administrative procedures.
Causes delays
7 Business registration and licensing procedures Informal trade/smuggle
8 Weigh bridges and bribery. Increases costs of trade
9 Number of officials to contact at transit points. Delays trade
10 Ignorance for transit requirements on 1-7 issues. Delays trade
11 Insecurity on roads. Limits trade
12 Poor infrastructure including electronic clearance
system (SIMBA), power supply, cargo scanners, state
road & railway networks.
Increase costs of trade
13 Other country transit fees, lack of parking space e.t.c. Increases cost of trade
Source: musebe: impact of NTB’s. (2013)

39
CHAPTER FIVE
SUMMARY, CONCLUSION AND RECOMMENDATIONS
5.0 Introduction
This chapter is divided into four sections, the summary, conclusion recommendations and areas
recommended for further study. It is guided by three objectives:
5.1 Conclusions
The main objective of the study was to assess the impact of non-tariff barriers on small scale
agro-cross border trade. The fundamental objective of EAC-Customs Union that targeted to
deepen the integration process through liberalization and promotion of intra-regional trade was
being compromised by arbitrary, unpredictable and discriminative Non-Tariff Barriers.
The study focused on the Non -Tariff Barriers specifically affecting the small and medium agro-
enterprises/traders (SMAEs) engaged in the EAC cross border trade. The study observed that
Non-Tariff Barriers affect negatively small and Medium Agro-Enterprises doing Cross border
trade, through rules, regulations and laws, the negative effects are mainly through additional
costs resulting from NTBs. Therefore, it can be concluded that the negative effects of NTBs
reduce profits earned from the trade by around 26 % through various costs like transport costs,
bribes, corruption, etc.
The main factors that contribute to persistence of Non-Tariff Barriers in agricultural trade within
the EAC region in order of importance at regional level were; lack of harmonized standards, lack
of enforcement mechanism for harmonized issues and lack of sufficient will power by Partner
States to affect harmonized issues.
At national level the main factors were provision of inadequate public facilities, insufficient
technically qualified staff, inadequate power supply and inappropriate clearance technology
while at Individual trade operators’ factors were; Inadequate planning and time management

40
resulting into haste, lack of confidence & fears, ignorance due to insufficient information and the
believe that bribery is mandatory.
5.2 Recommendation
The study findings discussed in the preceding chapters yielded a number of recommendations to
policy makers and implementers namely; first, the Governments of all the five Partner States
should endeavor to enhance their will power and commitment towards regional integration of the
EAC. Second, the EAC Partner States should to invest in streamlining trade and sensitization of
the stakeholders such as border personnel on passport document and how to identify
counterfeits/fakes, county government officials on taxable goods, fees and levy.
Reduction and eventually elimination of NTBs identified in this study were paramount and
would both reduce the costs of doing business and contribute to the realization of increased
revenues. Third, EAC countries should renew and demonstrate full commitment towards
implementation of the provisions of the customs union protocol and ensure that existing NTBs
were reduced and eventually eliminated, for instance road-blocks and police-checks were just
one and the same thing to a trader as well as a transporter since both were discriminative and
barriers to trade. Partner States should reduce roadblocks to only minimal number and where
police-checks are mounted Governments should notify stakeholders on the routes affected.
Fourth, Partner States should invest in public utility facilities such as power and clearance
systems while fast tracking harmonization of those issues that were regional in nature such as
taxes, fees and levies, vision policies, immigration systems, documentary requirements as well as
administrative and customary procedures.
Fifth, there was need to streamline administrative procedures at border points and along major
transit routes to improve trade efficiency by harmonizing and simplifying trade regulations and
business registration procedures. Customs requirements should be made more transparent and
clear to all stakeholders involved such as traders, customs officials and police. Simplification of
customs procedures was necessary in order to make processing of customs clearance
documentation quicker. This could be achieved through complete computerization of all
clearance procedures including cargo verification.

41
5.3 Recommendation for Future Research
First while, this study confines its analysis to small scale agri- trade, there is need to carry out a
further study on other products & services as well to update existing literature. The analysis
could be extended to non agri-trade like household equipments, drugs and medicines which are
also important to livihood of people in the EAC countries.
Second, there is need to carry out studies on the extent of the achievements of the two earlier
established pillars namely; customs union and common market to evaluate the achievements of
the EAC regional integration process.

42
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Deardorff, A. V. (1997). Measurement of Non-tariff Barriers.
Melo, C. C. (2009). "Non-Tariff Measures: What do we know, what should be done".
mukuna, e. (2014). "EAC non tariff barriers and thier effects on small & medium agro
enterprises". Retrieved july 2016
Okumu, O. L. (2014). "Non-tariff Barriers in EAC Customs Union: Implications for Trade
between Uganda and Other EAC Countries.". Retrieved 2016
sandre, R. L. (2008, 08 06). "Non-Tariff Measures Inhibiting South Africa’s Exports to China
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and Rural Development. Iowa. December 2006. Consequence and Policy Options. Maputo
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Karugia, J., Wanjiku, J., Nzuma, J., Gbegbelegbe, S., Macharia, E., Massawe, S., Freeman, A.,
Waithaka, M. and Kaitibie, S. (2009). The Impact of Non-tariff Barriers on Maize and Beef
Trade in East. Working Paper No. 29.
Regional Strategic Analysis and Knowledge Support System, East and Central Africa.
Nile Basin Initiative. 2008. Gender and Youth Dimensions in Cross-Border Trade and
Investment in the Nile Basin Countries. Final Report P075952. Entebbe. Nile Basin Initiative.
Regional Agricultural Trade and Information Network (RATIN) 2010
http://www.tradeafrica.biz/documents.asp?id=2&cID=7
URT (2002). Small and Medium Enterprise Development Policy. Ministry of Industry and
Trade, Dar es Salaam, Tanzania.
Wangia, Caleb, Sabina Wangia, and Hugo De Groote. 2002. Review of Maize Marketing in
Kenya: Implementation and Impact of Liberalisation 1989-1999. In Friesen DK and AFE
Palmer (eds.) Integrated Approaches to Higher Maize Productivity in the New Millennium,
Mexico, CIMMYT
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World Trade Organization, Zurich.

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