final report itc-tanzania fs - field findings 11-2014

FINAL REPORT: THE FEASIBILITY STUDY FOR THE

ESTABLISHMENT OF CAPACITY TRADE HUBS FOR IMPROVING

THE WICBTs/MSMEs BUSINESS ENVIRONMENT IN TANZANIA RUSUMO KABANGA NAMANGA MUTUKULA BORDER POSTS

Courtesy: Field photo on Trade volumes across Kabanga/Kobero Border Posts – 2014.

INT/71/14A Trade facilitation for women informal cross-border traders and MSMEs in the East African Community - phase II

ACKNOWLEDGMENTS

The final report1 presents information on the feasibility study for the establishment of the trade hub to solve WICBTs/MSMEs’ existing bottlenecks related to trade facilitation conditions, findings and recommendations thereto at Namanga, Mutukula, Rusumo and Kabanga border posts below. The feasibility study was conducted to inform the decision to provide or not technical assistance in form of establishing Capacity Trade Hubs in the most suitable border post (s). The trade hub facilities conform to the promotion of Trade facilitation for WICBT and MSMEs in the East African Community and as a component of Phase II roll-out project. The Trade Hubs establishment is intended to assist WICBTs overcome the obstacles they face that limit their ability to expand their market share in neighboring countries.

The feasibility study would not have been possible without ITC the sponsor of this survey assignment, through Business Environment Section/ Division of Business and Institutional Support, by Ezequiel Guicovsky Lizarraga, Senior Business Development Officer and his dedicated team of colleagues in Geneva - Florian, Beatrice and Uyanga, for their invaluable guidance, coordination and support throughout the whole study. We are indebted to the Tanzania Trade Development Authority (TANTRADE) leadership and managements' support. We thank the Chief Executive Officer Mrs. Jacqueline Maleko -TANTRADE for providing wise counsel during our inception meeting and the District Commissioners for Missenyi and Ngara Districts for their participation during our courtesy calls to authorize us to proceed with the visits.

The Regional Consultant expresses his gratitude to the Chairpersons of joint Border Committees (JBC), border station heads of border government agencies of Customs/Immigration at Namanga, Mutukula, Rusumo and Kabanga for their invaluable ideas and guided tours. We are thankful to the Government representatives in the Ministry of Trade and Industry – District Trade Development Officers – Noel Mungure and Helen Mkongwa for Missenyi and Ngara respectively; and Ministry of Gender – Community Development Officers at Missenyi District – Anna Ndile. The Women ICBT Chairpersons and executive members2 of associations/ groups at Namanga, Mutukula, Rusumo and Kabanga are greatly acknowledged for their active participation as key informants and focal groups to respond to the designed questions. The Women participation was central to the quality and credibility of the study findings.

My heartfelt gratitude goes to the support field survey team that comprised of special and dedicated individuals by the names of Samuel Billy Mvingire – Director Research and Planning at TANTRADE, Fwalo John - Senior Programme Officer and focal person of the WICBT project and Rogasian Mkenda – National Coordinator for ITC Women ICBT project in Tanzania. Their support and coordination was a mark.

Nuwagaba Mbiine Charles International Trade Center - Regional Consultant November 2014.

1 This report is considered final till advised otherwise. Any reviews and discussions (where possible) by clients and relevant stakeholders can be still done. The agreed changes will be subsequently incorporated after the validation workshop into the very last final report. 2 Refer list of names for WICBT/MSMEs association executive members and border agencies who participated in FGD in the appendix 11


Table of Contents

ACKNOWLEDGMENTS ............................................................................................................. 1

ABBREVIATIONS & ACRONYMS ............................................................................................. 3

EXECUTIVE SUMMARY ........................................................................................................... 4

1.0. INTRODUCTION and BACKGROUND ........................................................................... 8

1.1. Background to the Assignment ........................................................................................... 8

1.2. Why the Capacity Trade Hub Concept and Study ........................................................... 8

1.3. Definitions of the Trade Hub Concept ................................................................................ 9

1.4. The purpose of the WICBT Trade Hub ................................................................................ 9

1.5. Capacity Trade Hubs Rationale and Location .................................................................. 9

1.6. Case Study on West Africa Trade Hub (WATH) ...................................................................... 10

2.0. METHODOLOGY and APPROACH ...................................................................................11

2.1. Visits and Study Selection ........................................................................................................... 11

2.2. Information and Data Collection Procedure ............................................................................. 12

3.0. KEY FINDINGS FROM THE FEASIBILITY STUDY ...........................................................14

3.1. Assessment of Border Posts for Trade Hubs in Tanzania ..................................................... 14

3.2. Prioritizing the Border Posts for Establishing Trade Hubs ..................................................... 21

4.0. POTENTIAL BENEFITS FROM ESTABLISHING THE TRADE HUB AT BORDER

POSTS .....................................................................................................................................36

4.1. General Benefits From Establishing Trade Hubs .......................................................... 36

4.2. TANTRADE ............................................................................................................................... 36

4.3. Tanzania Revenue Authority .................................................................................................. 37

4.4. EAC and SADC ....................................................................................................................... 37

5.0. CRITICAL SUCCESS FACTORS FOR ESTABLISHMENT OF ICBT TRADE HUBS ....37

6.0. RECOMMENDATIONS ..................................................................................................39

7.0. CONCLUSIONS .............................................................................................................41

8.0. APPENDICES ................................................................................................................42

Appendix 1: Key Informant (KI) Guide Questionnaire .................................................................... 42

Appendix 11: Attendance List for WICBT Focal Group Discussion at four Border Posts in

Tanzania ................................................................................................................................................ 43


ABBREVIATIONS & ACRONYMS

BIC : Border Information Centers BP : Border Post COC : Chamber of Commerce COMESA: Common Market for Eastern and Southern Africa EAC : East African Community EASSI : Eastern African Sub-region Support Initiative of Women FGD : Focused Group Discussions ITC : International Trade Center ICBT : Informal Cross Border Traders JBC : Joint Border Committee KI : Key Informant KWG: Kabanga Women Group MCOC: Mutukula Chamber of Commerce MOHA : Ministry of Home Affairs MOU : Memorandum of Understanding MSME : Macro, Small and Medium Enterprises MUWOTA : Mutukula Women Cross Border Traders Association NTBs : Non-Tariff Barriers NWICBA: Namanga Women Informal Cross Border Association OSBP : One Stop Border Post PS : Prioritization Scale RC : Regional Consultant RWG : Rusumo Women Group SCOO : Simplified Certificate of Origin STR : Simplified Trade Regime TANTRADE: Tanzania Trade Development Authority TNWICBT : Tanzania National Women Informal Cross Border Traders Association TR : Trade Hub TIDC : Trade Information and Data Centers TIDO : Trade Information Desk Organization TIN : Tax Identification Number TPO : Trade Promotion Organisations TRA : Tanzania Revenue Authority TSI : Trade Support Institutions WICBT: Women Informal Cross Border Traders WCBT: Women Cross Border Traders


EXECUTIVE SUMMARY

The final report is the last deliverable for the study on the establishment of the trade hubs in Tanzania. The report discusses the findings, and proposes strategic recommendations arising out of the study on each border post of Mutukula, Kabanga, Rusumo and Namanga. The study focused on the prioritizing the border post, identifying the best place, existing infrastructures, women’s needs assessment, human resource capacity to operate the hub: and a review of imports/exports’ volume data as required and stipulated terms of reference.

a). The summary findings of the feasible and unfeasible aspects necessary for establishing Trade Hubs at each border post below were premised on the prioritization scale (PS) derived on the criteria set against the terms of reference. Variations in the trade volumes, the formalization and readiness of the women groups and its members are the main ingredients that scale them apart.

Mutukula Border Post (i). Mutukula border post scores highest on PS for first priority to pilot and implement a trade hub pilot over the other three borders on the following strength and opportunities as referenced in the matrix under section 3.2:- It is amongst the growing border posts in Tanzania estimated to import 5% of the national

imports from the East African Community (EAC) for 2013 higher than Kabanga and Rusumo (Part 1 – a).

The border post has a completed and spacious OSBP facility ready to host all border agencies upon commissioning. The OSBP operations are pending completion of its juxtaposed one at Ugandan side and is expected to be completed in 2015 (figure 1).

It has an existing Women Group – locally known as MUTUKULA WOMEN CROSS BORDER TRADERS (MUWOTA) with highest numbers of 48 fully registered members of the association and at the exact frontier (Part v –a).

The MUWOTA association has a constitution and it is in the final stages of registration with the District at Missenyi and Ministry of Home Affairs in Dar within 2015 (Part I – d).

It has the lowest estimated time of readiness – up to six months to carry-out the pilot and subsequent implementation of the trade hub (Part iii – f).

It has high potential and available women who may qualify to become experts and train-of-trainers for their fellow members on account of higher levels of education from secondary to university education (Part iv – b).

Exhibited lowest needs of training to develop services for their fellow members (Part iv – c) It has an association that can become a potential candidate for the trade hub (Part iv – d) It has on average of 400 – 500 highest members of ICBTs who are estimated to cross the

border daily (source: - Mutukula JBC).

(ii). Mutukula border post faces some challenges and threats to host a trade hub in the short-run:- It has the lowest volumes of exports about 12% through Mutukula to the community, which

is the lowest of the other three border posts. Due to the already planned and space allocation within the OSBP facility, the WICBT groups

and any other private sector entity don’t have automatic qualification at the moment to access it. JBC will be seen to make up their indicative promises during the study after the OSBPs’ commissioning.

Location of the trade hub outside the OSBP facility would imply that women needs would not be effectively served since one will require exiting the facility first in order to access it.


Whichever way the decision taken by JBC will be, it is critical to consider the dual placement approach of the trade hub both inside and outside the OSBP facility.

Kabanga Border Post (i). Kabanga border post would take the second slot against PS to implement a trade hub pilot over the other two borders Namanga and Rusumo on the following strength and opportunities:- The percentage shared volumes of domestic exports that are destined to the community

through Kabanga border post are second highest estimated at 25% (Part 1-b). Kabanga Women Group has developed the first draft constitution and submitted it to Ngara

District authorities for review. Other than MUWOTA of Mutukula, no other border post women group presented any constitution making document.

The estimated time or the implementation of the trade hub is estimated up to a period of nine months (Part 111-f).

Kabanga Women Group was identified as the existing and potential women group associated with informal cross border trading at the time of the visit (Part v- d).

(ii). Kabanga border post faces some hurdles and threats to host a trade hub in the short-run:- The percentage share of import volumes passing through Kabanga border post is estimated

at less than 1% originating from the community (Part 1-a). The existing women group has no capacity at the moment to provide human resource

experts. The sampled members at the executive levels indicated to have dropped out from secondary and primary levels of education. External expertise will be necessary (Part 1v-b).

The specific training needs to develop services or women must be tailored and customized to the lower levels of education (Part iv-d).

The OSBP facility is still undergoing construction and may get ready later in 2015. There is still higher uncertainty on permitting operations of the trade hub inside an OSBP facility given the similar conditions and concerns in most other border posts’ facilities.

The Kabanga women group has lost registered members from 27 to the current 15 members (Part 1-e).

There are limited premises readily available in the vicinity or nearest both the old and new sites of the border station. The trading centre is more than 500 metres away from customs and immigration offices.

The piloting and establishing a trade hub prospects at Kabanga border post could be in a hold-up phase3 for nine months till the women group has been registered and members adequately re-tooled and re-grouped.

Namanga Border Post (i). Namanga border post is placed in the third slot for consideration for priority to implement a trade hub pilot due to the following strength and opportunities:- There is a completed structure of OSBP facility ready for commissioning as soon as their

juxtaposed complex at the Kenyan side is completed. The percentage share volumes of trade from or to the community on imports at 54% and

exports at 35% are recorded through Namanga as highest amongst the three border posts (Part I - a & b)

There are many private premises and land opposite the OSBP facility to consider options of placement for the trade hub.

3 Hold up phase in the context of this study is the transition period through which a WICBT/MSME group will take to grow and attain capacity to manage the pilot of establishing a trade hub at the designated border post. The period should not exceed two years.


(ii). Namanga border post faces some challenges and threats to host a trade hub in the short-run:- There is no formal association formed yet. Namanga women group is planning to initiate the

process of formalization into a registered association with Longido District authorities (Part iv-d).

The draft constitution consultative and making process has not yet commenced Part i-d). The sampled members of the executive committee are largely primary level of education

graduates. There was neither apparent nor existing expertise among the WICBT members (Part iv-b). The low levels of education demands and requires specialized training materials and skills

that are tailored to develop services for women (Part iv-c). The estimated time for the implementation of the trade hub has been put up to 12 months

provided the capacity development and registration process are progressed uninterrupted. Therefore this puts Namanga border post at the holdup phase before piloting the

establishment of the trade hub till the growth path of WICBT association formalization (part 111 (f) is attained.

Rusumo Border Post (i). Rusumo border post is placed in the last slot for consideration for priority to implement a trade hub pilot due to the following strength and opportunities:- There is a near completion and well-designed OSBP facility that is expected to be ready for

commissioning and occupation in the year 2015. The percentage share volumes of trade from the community on exports at 22% was

recorded through Rusumo as third highest amongst the three border posts (Part I – a & b) (ii). Rusumo border post faces some challenges and threats to host a trade hub in the short-run:- Rusumo Women Group is yet to initiate the process of formalization into a registered

association (Part iv-d) The draft constitution making and consultative process with women members has not yet

commenced Part i-d). The sampled members of the executive committee are largely primary level of education

graduates. There was no apparent expertise that could be identified among the women members (Part

iv-b). The low levels of education demands specialized training approach, materials and skills to

develop services for women (Part iv-c). There are limited and expensive private premises and land opposite the OSBP facility

available for placement of the trade hub. The landscape is a ridge with steep slopes ending into river Rusumo (Part iii – e).

The estimated time for the implementation of the trade hub has been put up to 12 months provided the capacity development and registration process are progressed uninterrupted (Part iii - f).

b). Summary Conclusions and Recommendations

i. The feasibility of establishment of trade hubs in the short run of 6 - 12 months in Tanzania border posts will happen if both the promoter ITC and in conjunction with the TANTRADE agrees to roll out a pilot project at Mutukula border post according to the prioritization scale. Evidence on the findings has established that majority women group’s lack of resource


capacity (mainly human resource expertise and start-up funding) to sustain the pilot phase let alone to establish and operate the Trade Hub.

ii. The introduction and establishment of trade hubs as modernized fully furnished/ equipped and visibly branded facilities will enable these units and the trade hub agents employed therein cope (e.g. former customs officers) with border agencies’ modernization practices.

iii. To the extent possible, trade hubs should operate as opposite facility sets of establishments for each border post in the neighboring country as a shared trade facilitation facility to aid informal cross border traders in both countries.

iv. Feasibility studies for establishing trade hubs should be carried out in both border posts neighboring each other, resources notwithstanding. For instance, studies conducted on border posts selected on Tanzania side should correspondingly be done on the opposite sides the neighboring community states i.e. Rwanda, Uganda, Kenya and Burundi.

v. Introducing and establishing trade hubs in border posts hosting OSBP facilities will require a placement of the trade hub based on two-part location; one part inside the OSBP to deal with such services as customer care, advocacy and trade information. The second part to handle external services such as capacity building and training which are most suitable to an independent location outside the OSBP. However, location outside the OSBP should be targeted within the immediate proximity to enable close contacts with border agencies. This two-tier location informed the estimates made in the matrix part iii (e).

vi. The existing MOUs should incorporate the initial joint ownership of the trade hub between ITC and TANTRADE to establish commitment, capacity to roll-out and later smooth transfer to competent associations and their leaderships.

vii. The medium-term option of securing a customs clearing license and diversifying to money changing business should be considered as means to support women groups and income streams for the future growth and sustainability of the trade hubs. These licenses could be taken under the responsibility and custody of TANTRADE or any future designated national WICBT body corporate on behalf of its member associations and individuals. A reasonable clearing and service fee could apply to trade hub users. This fee in turn would become additional revenue/income for supporting trade hub activities.

viii. Based on the market price indicators during the study, the operations cost of establishing a functional and fully-equipped trade hub is dependent the two-tier location requirement. In scenario one if JBC gives a positive nod to offer occupancy space inside the OSBP and outside location, the following cost estimates will apply i.e. 1 – USD$39,100 renting premises. 11 – USD$57,400 renting land for placement of fabricated trade hub. 111 – USD$58,600 building a trade hub. In scenario two if JBC delays or even objects admission into OSBP, then consideration to locating outside OSBP takes center-stage and lessens the corresponding cost estimates of USD$17,600 meant to cater for inside the OSBP i.e. Options 1- USD$21,500 for renting premises. 11 – USD$39,800 for renting land to place fabricated units. 111 – USD$41,000 for construction of trade hub structure (Refer to the matrix Part iii – e).


1.0. INTRODUCTION and BACKGROUND

International Trade Centre (ITC), appointed and engaged the Regional Consultant, to conduct a feasibility study to establish and introduce Trade Hubs for Women Informal Cross-Border Trades (WICBTs) and Micro Small and Medium Enterprises (MSMEs) in Tanzania on the establishment of is implementing the second phase – 2014-2015 of regional project to facilitate the improvement of EAC WICBTs and MSMEs. The feasibility study is a component critical to the success and full implementation of the project. The report is part of a series of two country studies covering the Burundi and Tanzania four border posts each. The capacity trade hubs are expected to improve the WICBT business environment and the transition from the informal to the formal sector to increase exports to neighbouring countries4.

1.1. Background to the Assignment

The ITC and in conjunction with Tanzania Trade Development Authority (TANTRADE) signed a Memorandum of Understanding to implement the Trade Facilitation for WICBTs and MSMEs in the EAC – Project Phase II for the period 2013-2014. ITC intends to achieve this objective through improving the business environment and the transition from the informal to the formal sector to increase exports to community neighboring countries. The project phase II aims will further be enhanced by the introduction of the capacity trade hubs as one of its key ingredients and initiatives. In this context, the trade facilitation process required conducting a feasibility study at the four selected border posts of Namanga, Mutukula, Rusumo and Kabanga in Tanzania. The main objective of conducting such a study on the placement and installation of WICBT/MSME Capacity Trade Hub service centers at border posts is to ascertain whether it’s feasible to include further value adding activities that develop Women commercial exchanges at border, growth, emergence and the more contribution to building the economy of neighboring countries in the EAC. The findings and recommendations attest to this.

1.2. Why the Capacity Trade Hub Concept and Study Women ICBT practises, like any other ICBTs at the border posts in Tanzania and in the EAC region, simply reflects longstanding indigenous pattern of trading practices that makes more sense than formal trading channels. Throughout the region, ICBT practices continues to be incentivized both by the persistence constraints (e.g. visible and invisible NTBs) facing formal trading but also a feature of economic and social life such as survival well-being of traders. Therefore the capacity trade hub project is an initiative, if successfully established and implemented, expected to contribute to women development in their transformation of the longstanding WICBT informality perceptions and practises that long existed at cross borders. The trade hub initiative is intended to introduce a permanent trade facilitation center at border posts through which continuous engagement and capacity development of the women traders will be sustained. It is further anticipated that most ICBTs will gradually be aided through trade hubs to the formality trading practices across borders which directly contributes to building the economy of neighboring countries in the community. In this report, the feasibility study for trade hubs has examined the current conditions of each border post of Namanga, Mutukula, Rusumo and Kabanga for the Trade Hub, strategic location for Trade Hub, existing infrastructures that can facilitate the establishment of the hub, women’s needs assessment in terms of expected trade hub, human resource capacity to operate the hub: and a review of imports/exports’ volume data at each border crossing. Reference was made to

4 OECD Trade Policy Working Paper No.86, 2009 categorized informal traders into three ascending but inter-related groups i.e. first informal that is unregistered and operating outside the formal economy; second are registered but avoid official border crossing posts; third are registered but partially evade trade regulations and duties through illegal practices such as under-invoicing. Similarly, Trade hubs should target and assist women growth in their registered associations at level 2 and 3 to formality.


the previously prepared literature and conducted studies on border crossing in the region and elsewhere. The data and information has aided establish the current conditions and capacity at each crossing. Once the current conditions were understood, the study formed the basis to examine the planned Trade Hubs establishments and other related issues in Tanzania. The findings are presented along with conclusions and recommendations herein.

1.3. Definitions of the Trade Hub Concept5 The concepts of trade Hubs for WICBT was originally conceived and defined in phase-one of the project. Consistent with the previous definition of capacity trade hubs, the planned trade hub for establishment will be a central point where WICBTs/MSMEs can access assistance related to customs procedures and export requirements, capacity building services, answers to common trade facilitation hurdles such as questions on trade compliance and export market-related information and assistance. This facility could be a designated place such as an office/center; and should be best located within and near the customs control zone within the border post precincts.

1.4. The purpose of the WICBT Trade Hub The trade hub is purposed to provide four key ingredients:- Customer care services that renders assistance related to customs procedures and export

requirements and answers to common cross border trade facilitation hurdles. Trade hub services must facilitate and create a faster, simpler, transparent and more predictable/supportive cross border environment

Trade information and data regarding cross border trade compliance and export market-related information with neighboring business transactions.

Regular capacity development and refresher training to associated cross border traders Advocacy with strategic partners from national, regional and international sphere for a

shared role. 1.5. Capacity Trade Hubs Rationale and Location

The trade hub rationale for WICBTs in this study is three fold:- Continued effort to the transformation of informal women traders from informal to formal

trading practices through deliberate export-led strategies and change management process. Promote and support Women issues with special attention to customer care services and

capacity development on cross border facilitation. Support planned and fit into the existing national and regional policy with its regulatory

framework regarding informal and formal cross border trade. In the case of Tanzania all the four border posts under study i.e. Namanga, Mutukula, Rusumo and Kabanga are designed and constructed under the One Stop Border Post (OSBP) concept. Therefore location of the trade hub will then depend upon the functionality and services it will offer. If the JBC committee adopts a decision to agree and approve the allocation of space and occupancy of the WICBT inside the OSBP, it may offer limited space for occupation such as a desk office that can offer customer care/advocacy/trade information services. Other key activities relating to capacity building, training, workshops and conferences/meetings will require spacious location and less noisy/busy outside the OSBP but in the proximity of the border post precincts. There are also can be occasional opportunities to utilize the OSBP board room. In the entire set-up and location context, it is imperative to understand the OSBP concept and its operations. The OSBP means a border post established under section 3 of the OSBP Act as

5 Derived from the Trade Facilitation for Women Informal Cross-Border Traders and MSMEs in the East African Community – Phase II (Inception and Rollout)


revised 2013, at which all traffic utilizing the border post stops only once in each direction of travel and both exit and entry procedures are undertaken from within the same control zone. The OSBP concept introduces a zoning phenomenon known as common control zone. A “control zone” under the Act means the part of the territory of the hosts Partner State within which Officers of the adjoining Partner States are empowered to effect border controls and includes the “exclusive use area”. This implies that on completion of OSBP facility construction at the designated borders, it must be enclosed by either fencing or perimeter wall which curves out and excludes other commercial and social activities outside it in the border post. The JBC committee usually follows strict allocation criteria on demands of office space giving first priority to all relevant Government agencies and critical private sector such as Customs agents and chamber of commerce. This arrangement puts a 50-50 chance of securing office space and the activities of the trade hub to be located partly within or/and wholly outside the control zone.

1.6. Case Study on West Africa Trade Hub (WATH)

A comparative case study6 on one of the USAID sponsored trade hubs in Africa, under its West Africa

Trade Hub (WATH) is provided as part of the findings and demonstration to the Tanzania WICBTs and MSMEs. The WATH is premised on the identified key measures to improve regional integration in West Africa following a comprehensive Gap Analysis on the Economic Community of West African States (ECOWAS) Free Trade Area. The Gap Analysis identified the need for improved public–private dialogue and coordinated private sector advocacy regarding implementation of the ECOWAS Tariff Liberalization Scheme (ETLS). As a result, WATH assisted leading firms with trading and transport operations in the region to form a private sector association, known as the Borderless Alliance (BA). Established in 2011, the Alliance is a business association that leverages its members’ influence to identify and advocate for evidence-based transport and trade policy reforms. The Borderless Alliance established an independent secretariat and founded National Committees in Côte d’Ivoire, Nigeria, Benin, and Senegal. It is thus well positioned for long-term sustainability and self-governance. One of BA’s most successful endeavors has been the creation of Border Information Centers (BICs) at border posts along the highly trafficked trade corridors in the region. As mentioned previously, the earlier analysis had highlighted the need to increase awareness of ETLS rules and procedures among the private companies trading and transporting goods within the region, as well as the public agencies responsible for regulating trade. Regional traders find that ports and land borders are major bottlenecks due to the multiplicity or rules and procedures required to move vehicles and goods through border processes—and the lack of consistency in implementation. Each BIC operates with two offices—one on either side of a land border (in Senegal, the Port of Dakar has its own BIC). Each office is staffed with a knowledgeable trade advisor from the host country who advises shippers, truck drivers, producers, and traders on specifics of the regional agreements (and border clearance requirements of the entering or exiting country). With USAID support, from November 2011 to early 2014, the BIC network expanded to nine such information centers. Most BICs are established in partnership with the national shippers’ council of the host country, which usually provides the physical location of the center and which may provide in-kind support. Other financial support to the BICs comes from Customs agencies, national shippers’ councils, and other border stakeholders. USAID has supported the salaries of Trade Advisors (generally former Customs Officers of their respective countries) stationed at each border, and has funded trainings, coordination meetings, publications, and outreach activities. USAID has published a Border Information Center toolkit, intended to guide and inform future implementers on best practices in setting up and monitoring impact. The BICs are already demonstrating significant improvements at the borders where they have been launched. In the second quarter of 2013, for example, average clearance times at borders with BICs decreased by 27% as compared to the previous quarter.

6 Adapted from a comprehensive approach to trade facilitation and capacity building; connecting developing countries to

supply chains march 2014 business environments for agile markets sponsored by USAID; authors : Ro Bert Holler, Erin Endean, Paul J. Fekete, And Virginia Brown page 34.


2.0. METHODOLOGY and APPROACH

2.1. Visits and Study Selection

The feasibility study on the establishment of WICBT/MSME Capacity Trade Hubs in Tanzania was conducted in two phases between 7th and 12th September and 26th October to 1st November 2014; and focused on one side of the border in Tanzania. The border sites studied were Kabanga (Burundi/ Tanzania), Namanga (Kenya/Tanzania), Mutukula (Uganda/Tanzania) and Rusumo (Tanzania/ Rwanda).These sites were selected and recommended by TANTRADE because they are among the strategic cross border trading centers and exit routes of the country for both exports and imports to/from community (EAC) countries. There is a high presence of WICBTs activities carried out both on export and import cross border trading. The approach employed a selective qualitative study that targeted focus group discussions involving WICBT chairpersons and their executive committee members since the outcomes will have immediate benefits to their associations. The Office In Charges Customs -Tanzania Revenue Authority, Head of Police and Immigration border post were targeted and consulted as key stakeholders directly involved in supporting placement and establishment of the trade hubs. A review of literature and secondary data was made to acquaint ourselves on the best practice elsewhere (especially WATH & Uganda) the trade hubs have been established or/and are being piloted. The sample size for the questionnaire survey is represented in table 1 below. The selection of the women leaders was purposeful and was based on the participation in association decision making on behalf of their members. Besides during the implementation phase, the same women leaders will most likely participate in the success and operationalization of the trade hub Table 1: Participation of Women ICBT of different Age Groups, Marital status, Occupation and Education by Border location

Age Group

Border Post

Below

15

15-

20

21-

30

31-

40

41-

50

51-

60

61

+

Grand Total

Namanga 3 2 3 8

Mutukula 1 3 4 3 1 12

Rusumo 1 4 5

Kabanga 1 3 3 1 6

Marital Status Married Single Widowed Separated Total

Namanga 6 1 1 8

Mutukula 8 3 1 12

Rusumo 5 5

Kabanga 6 6

Occupation Border

Agency

official

WICBT

member

MSME

member

Clearing

Agent

Total


Namanga 8 8

Mutukula 8 4 12

Rusumo 5 5

Kabanga 6 6

Education University Tertiary/

College

Secondary/

Primary

Other Total

Namanga 8 8

Mutukula 1 3 8 12

Rusumo 5 5

Kabanga 6 6

Source: Primary Data from the field study

The Women groups at all the border posts and their associations were indeed found to

represent a critical mass of their members i.e. 21 - Namanga, 48 - Mutukula, 38 - Rusumo and

15 - Kabanga. The other key informants belonged to the Government border agencies and

included the Office In charge of Customs border posts –Tanzania Revenue Authority (TRA) at

Namanga, Mutukula, Rusumo and Kabanga border posts. They are the current Joint Border

Committee chairpersons at the four respective border posts. Other border post official heads

came from Immigration, Regional and District offices at Longido, Missenyi and Ngara. The

private sector at Namanga and Tanzania National Chamber of Commerce – Mutukula Branch

participated as additional key informants.

2.2. Information and Data Collection Procedure

2.2.1. The Study Entry Process The study team consulted all the parties as key stakeholders, decision makers and representatives with influence to support determine the placement and establishment of the WICBT trade hub. In Tanzania the power centers and structures are deliberately linked to the center in Dar es Salaam. For instance, any activity to be carried out in the district must be reported to the District headquarters, the district consults the center in Dar. The study entry process started with the District Director before proceeding on to visit any of the four border posts. The Director received the team and was given a briefing from TANTRADE representative and Consultant. He then asked the Trade Development Officer to accompany the study team as a Government/District representative. 2.2.2. The Joint Border Committees and their Roles

The study team was assisted and guided by the OSBP Joint Border Committees. All the four border posts visited were designed and constructed under OSBP concept and arrangement. Namanga and Mutukula OSBP facilities are completed for occupation pending completion of their opposite and counter-part OSBPs in Kenya and Uganda respectively. OSBPs at Rusumo and Kabanga are expected to be completed and perhaps commissioned in 2015 since their counter-part OSBPs in Rwanda and Burundi are already in operations. Tanzania government through her relevant ministries established JBCs and assigned TRA as chair. Each of the OSBP border posts above must be organised under JBC administrative structure which functions as a


governance organ that forms the first layer of decision making on the day-to-day operational activities and challenges without consulting regularly from the central government in Dar. What is the Joint Border Committee (JBC)? The JBC is a multi-Sectoral collaboration of key government agencies and the private sector involved in the border post clearances for the purposes of: - Promoting a trade facilitation mind set to all relevant and participating cross border

stakeholders

- Defining critical operational challenges and providing possible solutions at the borders

- Enhancing inter agency collaboration and mutual trust/cooperation at border post

- Encouraging joint usage and sharing of available resources at the border

- Arbitration and defusing tension and conflict between public and private sector

- Minimizing the disconnect with Headquarters in Dar and bridging the any existing gaps

- Rationalizing control and regulation at the border posts through wider consultations

JBC is a border post organ that will not only influence placement of the trade hub inside OSBP

but also critical to collaborate with WICBT and enable their success.

2.2.3. Government Border Post Agencies and Private Sector

The study team made initial contacts with both the government and private sector stakeholders. All government, other government and private sector border agencies operating at the border within the OSBP are formally represented in the JBC governance organ above. The team met and sought views as part of the focal group discussions from the Trade and Community Development District Officers all from the three Districts of Ngara (Rusumo/Kabanga), Missenyi (Mutukula) and Kajiado (Namanga); and the WICBT/Private Sector Chairperson and Chairman JBC in the case of Namanga and Mutukula. The Tanzania National Chamber of Commerce Branch representatives were present as well at Mutukula. The study team’s objective was to seek free access, inspections and conducting interviews at the four border posts. The regional consultant led the engagement for direct interviews with all the key informants and respondents. During the engagement sessions the trade hub concept was introduced by the regional consultant. This process would then be followed by question and answer session. Feedback was quickly incorporated into the study. The purpose of introducing the trade hub concept was to sensitize the key informants, register early their buy-in/comprehension and assess their immediate feedback/perceptions. 2.2.4. Women ICBT Participation in the Survey The study team met the WICBT group first and separately as our point of entry and major key stakeholders in all the border posts. The WICBT survey questionnaire was designed following the terms of reference to deliberately gauge the respondents’ perception and potential support towards the trade hub. The involvement and participation exercise by the Women groups’ members and their executive committee members meant that their views would be incorporated as well but also start to own the trade hub project. In each case, respondents were assembled in a central but relaxed meeting venue to participate conveniently and freely. During the meeting and before administration of the questionnaire to the targeted focal respondents was done, the National Coordinator would introduce the purpose of the visit. He would then ask the representative from the Trade Support Institution (TSI) – TANTRADE, to share the purpose and intentions of the ITC/WICBT project in the country and EAC region. The Women groups chairpersons and their committee members would make brief comments on their status, current roles and grouping or/and association activities. The regional consultant would then introduce the trade hub concept where upon questions and answer session would follow. The whole exercise would be conducted in English and translated by the team’s


coordinator into the commonly spoken language i.e. Kiswahili, to enable the respondents understands the questions and bridge any possible language barrier gaps. Throughout the engagement the women’s needs assessment in terms of expected trade hub and human resource capacity to operate the hub would be determined.

2.2.5. Key Informant Group Interviews The guided Key Informants Group (KIG) interviewing sessions in every border post were conducted into two separate focus groups. The purpose of interviewing the two groups separately was intended to set the ground free of expression and any perceived influence from the JBC. The first group consisted of the leadership of the Women ICBT groups for Mutukula, Kabanga, Namanga and Rusumo7. The Women association leaders as KIG8 brought forth their views and feedback about the new concept of trade hub and how they expected it to benefit them. The questions were read from preprinted questionnaires and explanations were made in Kiswahili for items or words that were difficult to respondents. The second group referred to each of the border agencies’ heads of stations that comprises the JBC. The key participants consisted of the Chairperson for the JBC existing at border posts, the Immigration station head and the private sector chairperson. In all instances, respondents were assured of confidentiality throughout the session and thereafter. We would seek to get imports/exports’ volume data at each border post from Customs Authorities. The interviewers’ roles were to ask only the relevant questions from the questionnaire to the informants and record responses at the same time. Information accruing was concurrently recorded in order to aid analysis for subsequent draft and final reports. 2.2.6. Inspection of the border post A guided tour and inspection would then follow after meeting the Joint Border Committee and Women group leaders. The inspection was intended to identify the strategic location for Trade Hub on either inside of the existing One Stop Border Post (OSBP) facility or outside it. All the JBC Chairpersons were non-committal other than goodwill promises to confirm availability of space inside the OSBP. The study team was taken on a guided inspection tour by the chairperson or his representative to identify any possible premises for rent or any piece of land for acquiring privately from individual owners in the surrounding border town centers. Most JBC Chairpersons appeared promising to consider the WICBT associations’ applications for occupancy after the OSBP facilities have been officially commissioned and gone through all the necessary formalities. TANTRADE in conjunction with women groups’ chairpersons should take on the responsibility of continued engagement with JBCs’ to ensure space allocation inside OSBPs is secured and formally confirmed. The idea of acquiring the piece of land came through to inform the future decision of having a permanent place for placement of a container, fabricated office or physical construction as the case may be or warrant.

3.0. KEY FINDINGS FROM THE FEASIBILITY STUDY

3.1. Assessment of Border Posts for Trade Hubs in Tanzania

The assessment and selection of four border posts were done based on the immediate needs

and considerations of both the intended beneficiaries and sponsoring agency regarding

prioritizing the most appropriate locations for piloting and subsequently establishing the trade

7 The Women Groups at Mutukula and Kabanga were not yet formally registered but had made progress with the draft constitution making process with the district authorities. At Namanga and Rusumo, Women Groups were yet to initiate the process of registration. The final

registration process in either case will be completed by the civil authorities at the district and in Dar by issuing certificates. 8 The list of key informants is presented in the appendix II.


hubs. We developed a prioritization scale where 1 = very feasible, 2= feasible, 3= less feasible

and 4= not feasible with weighted strength from 1 as the very feasible to 4 as not feasible see

section 3.2 matrix below. The scores were against the set criteria as provided in the terms of

reference. We coupled this selective method with the knowledge from the previous phase 1 and

the on-going trade facilitation project work done in phase 2 at the four border posts of Mutukula,

Namanga, Rusumo and Kabanga in 2012 and 2014. Both phases resulted into several

important outcomes of immediate benefit to the women ICBTs in the community but more

specifically Tanzania. During the first phase in 2012, related efforts resulted into some

significant achievements. For instance, formation of women ICBT associations at the borders,

establishment of capacity trade hubs at the Mutukula and Busia borders in Uganda, training

aids/ manuals to improve women’s capacity to comply with customs and border processes,

guides on formal cross-border trade and how to transition from informal to formal status,

guidelines for setting up and sustaining Women ICBT trade associations. This background

information guided the assessment and scoring basis premised on the terms of reference upon

each the border posts below. The findings and outcomes are follows is the next sections.

3.1.1. Mutukula Border Post Mutukula border post is one of the entry / exit border posts that link the community from Uganda

to Tanzania with a recently constructed OSBP facility pending commissioning (Figure 1).

Mutukula border and its township is situated in Kagera region and administered by Missenyi

District Headquarters (Figure 2). It is here that all authorization to visit and access the border

post is secured and any administrative services required by the Women groups regarding

registration and licensing into an association is obtained.

Fig 1-Mutukula Border Post – New OSBP Facility Fig 2- Missenyi District Hqtrs that authorized visit to Mutukula

The guided tour to conduct an inventory of existing infrastructures that can facilitate the establishment of the hub with the border agencies and women leaders was done. During the tour, we identified various locations suitable for the trade hub especially the renting outside the OSBP facility option (figure 3). We established availability of grid and stable electricity supply, internet and telephony communications networks. The OSBP facility is anticipated to cut-off the town communities and its premises upon commissioning other the passenger gates which will necessitate outside location of the trade hub capacity building functions.


Fig 3: Guided tour of stakeholders to identify trade hub location Fig 4: Customs Parking Yard with traffic for Imports/Exports

While meeting the border agencies, issues of conforming to the designated procedures and services available to WICBTs were discussed. According to Customs, Mutukula border post handles 5% share of imports volumes and 12% of export volumes to the community (table 2). The cross border transit traffic has increased tremendously from 15 to 60 daily in the last two years as a result of reconstruction to all-new tarmac road networks from Dar es Salaam port (figure 4 & JBC). On average of 400 – 500 ICBTs are estimated to cross the border daily. Through modernization projects, systems and processes have been simplified through increased automation and online declaration services for women. The Immigration officer on his part confirmed provision of convenient temporary movement passes to local residents wishing to crossing to Uganda. This entry/exit pass is free and is valid for up to two weeks. Local residents from Uganda had to pay a small fee (Tshs 2, 500) for such a temporary pass to get to Bunazi local market 25km inland Tanzania instead. This was confirmed by the JBC (figure 5).

Fig 5- Meeting with the JBC representatives at Customs office Fig 6- Mutukula MUWOTA Women Group in FGD

We established during the FGD (figure 6) that the Women group at this border post had

previously benefitted in the phase 1 and now 2 project outcomes especially the training to

improve women’s capacity to comply with customs and border processes, using the established

capacity trade hub at the Mutukula border –Ugandan side and formation of their women ICBT

associations. Missenyi District’s Regional Development Plan already supports and promotes all

Women and youth groups in the region. The District officials supported and encouraged women

traders use their MUWOTA platform to apply and secure some lock-ups for their members in the

on-going construction of a Cross Border Trade Market Complex. It is expected to host shops, a

market, lodges, restaurants and offices. The Chairperson of the Joint Border Committee urged

the MUWOTA Chairperson to approach him for consideration on space allocation after the due

process of registration is completed. Mutukula overall scores highest on the prioritization scale


(section 3.2 matrix below). MUWOTA- Women Group was found to be most prepared within a

period less than six months to support establishment of the trade hub.

3.1.2. Kabanga Border Post

Kabanga border post is one of the main export and transit traffic ports that link Tanzania to

Burundi. The border post is the latest in the development of the OSBP facility and concept

slightly behind the other three in completion. Kabanga border post and its neighboring township

is situated in Kagera region and administered by Ngara District Headquarters (Figure 2). It is

here at the office of District Director that all authorization to visit and access the border post is

secured and any administrative services required by the Women groups regarding registration

and licensing into an association is obtained.

Fig 7: Kabanga New OSBP Facility under construction Fig 8: Ngara District Headquarters – Director’s Office

The Immigration Officer in Charge, representing the chairperson JBC conducted a guided tour for the team to ascertain an inventory of existing infrastructures that can facilitate the establishment of the hub. We visited the new site of OSBP where all the government agencies will shift soon after commissioning of the facility. According to the JBC, the old structures will be retained for any auxiliary needs and services since they belong to government. However, there was a possibility to have some space in the new OSBP facility on first come first serve basis for the private sector. The team visited the OSBP service center on Burundi side where Tanzania agency officials were sharing the same facility with Burundian officials (figure 9). In this arrangement, we were told that a few WICBTs have started coming from Tanzania and stop once for declaration and release of their cargo. On our return journey from Burundi, we sighted the on-going construction of a Cross Border Trade Market Complex opposite the new Kabanga OSBP facility, which will host shops, a market, lodges, restaurants and offices. JBC further advised the women group leader to make early contacts with the District administration authorities to book space for the trade hub office and market stalls for their members. There was evidence of many private premises for renting out adjacent to customs old buildings and within Kabanga Township. Unfortunately, the premises are located more than 500 meters away from Customs offices and even further away 1km from the new OSBP facility to adequately serve as rentals for establishing trade hub. The border post is well served and connected with utilities infrastructure such as stable grid electric power; internet connectivity is by private telecom service providers and mobile telephones (figure 10).


Fig 9- OSBP juxtaposed TRA office in Burundi Fig 10- Grid Electricity & Telecom at Customs Office

The study team met the border agencies and private sector representatives at the Customs office. There were high expectations of shifting to the new facility all government agencies to sit under one-roof with their Burundian counter-parts when completed perhaps by early next year 2015. According to Customs, Kabanga border post handles 25% share of exports volumes to the community to Burundi and less than 1% share of imports from the community from Kobero – Burundi (table 2). The border transit and export traffic exits close to 2,500 cargo trucks and passenger vehicles every month. On average 100 - 200 ICBTs are estimated to cross the border daily on peak/ market days on Thursday to Muyinga 15km from Kobero border post in Burundi. Our tour guide pointed out some challenges WICBTs may face due to uncontrolled and illegal migration of people from each side of the country. There is no a natural barrier on either side of the border and between the two OSBP facilities with more than 2 kms stretch of free and No-Man’s land. This would-be No-Man’s - Land is currently getting occupied fast by settlements, residential and commercial premises developments under construction. The Kabanga Immigration office provides temporary border movement passes to local residents to cross to Burundi especially on market days.

Fig 11-Kabanga Women Group in FGD Fig 12- Meeting Ag Chairperson JBC

During the FGD with Kabanga Women Group (figure 11) some women members indicated that

they had previously benefitted in the phase 1 and now 2 project outcomes especially the training

to improve women’s capacity to comply with customs and border processes and formation of

their women ICBT associations. Ngara District Community Development Office is already

supporting the drafting of the Women ICBT constitution making process. On the prioritization

scale, Kabanga Women Group becomes overall second with a shorter period of readiness (nine

months) before the trade hub is established.


3.1.3. Namanga Border Post

Namanga is the main point of entry / exit that link Tanzania and Kenya (figure 19). This border

post is a politically and economically significant for inter-trading activities across the gates

between the two countries – Kenya and Tanzania. Locally, the border post is located between

the Longido district (Tanzania) and the Kajiado County (Kenya) and represents the major shift of

improved infrastructure to the recent construction of the One Stop Border Post facility (figure

20). However, it is awaiting their Kenyan counter-part OSBP facility construction to get

completed in order to commence full-scale juxtaposed operations.

Fig 19- Border Agencies’ Offices Opposite OSBP facility still in use Fig 20- OSBP Facility with Imports/Exports trucks

During the station outdoor inspection, we observed that behind the main road leading to the exit entry there is vibrant and blend of formal and informal business establishments and trading activities. This part of town is already curved out by the constructed fence with the impending commencement of OSBP juxtaposed operations soon (fig 20). OSBP infrastructure limits access by the original border residents and any settlements outside it. Placement of the trade hub will have to consider two-part location; one part inside to deal with such services as customer care, advocacy and trade information. The rest of the services such as capacity building and training is most suitable to locate in the curved out town area. The border post handles 54% share of the import volumes originating through community border posts; and 35% share of export volumes to the community (table 2). Averages of 300 – 400 ICBTs are estimated to cross the border daily (JBC). According to the private sector chairperson and the Women group leader, up to an estimated 400 people cross the border daily. Another estimated 60% (250) belong to cross border traders originating from as far as Arusha and Nairobi. However, the WICBTs are just considering themselves to get organized and form into formal association. At the time of our visit, a group of Women led by its chairperson Sara Keiya were in the process of associating to start registering their association titled Namanga WICBTA with the district authorities at Longido. The membership was at 21 strong and still growing. This group is the future WICBT at this border post for dealing with in the trade hub project (figure 21 & 22).

Fig 21- Namanga WICBT group in FGD session Fig 22- Study team visiting a WICBT member’s shop


The trade hub concept was introduced to both the border agencies and WICBT group situated at Namanga (fig 21). The Women Group will require sustainable assistance during the gestation period of one year. Therefore this puts Namanga border post in the third priority slot on prioritization scale and for the pilot to establish a trade hub. It will have a hold up phase till the growth path of Namanga Women Group development and formation into a WICBT association is attained. 3.1.4. Rusumo Border Post Rusumo border post is one of the key transit and export ports that link Tanzania and Rwanda (figure 13-14), with a near completion OSBP facility (Figure 15). Rusumo border and its township is situated in Kagera region and administered by Missenyi District Headquarters (Figure 2). It is here that authorization to visit and access the border post was obtained. The community development officer Helen Mkongwa notified that any administrative services required by the Women groups regarding registration and licensing into an association is done by the district authorities. The border agencies still occupy a temporary shelter which accommodates all border agencies’ offices (figure 14).

Fig 13-Rusumo border post Fig 14- Current Border Agencies Office Fig 15- New OSBP facility due for Completion

The port is one of the near completed OSBP facilities (figure 15) and already handles 22% share of export volumes to the community through Rusumo – Rwanda, and less than 1% share of imports from the community (see table 2). It exits an estimated 100 transit cargo trucks less passenger cars/buses on average and 60 ICBTs are estimated to cross the border daily. Challenges include location of the border post situated along a very steep ridge, wide River Rusumo and narrow bridge that marks the boundary between Rwanda and Tanzania. There is a huge difficult for settlements and residential and commercial premises to conveniently get constructed and expand. The OSBP facility has already been cut-off from the neighbouring town community with the fencing around it. There is a JBC headed by Customs to coordinate all border activities. The Rusumo Immigration Office fully-pledged to provide border movement passes to local residents to attend market days in Rwanda.

Fig 16-Rusumo WICBT members in FGD Fig 17-Inspection with border agencies Fig 18- Electricity and Water are available


Ngara District Community Development Office is ready to support and promote Rusumo

Women Groups in the registration process if they present themselves for assistance. There is

no border market on the Tanzanian side; instead it is located at the Rwandese side. Rusumo

JBC has mandate to consider space allocation or not to the trade hub. “The Chairperson of the

Joint Border Committee - Customs urged the Chairperson WICBT to approach him for

consideration on space allocation after the due process of registration is completed”. Another

estimated 80 – 100 ICBTs cross on Tuesdays, Thursdays and Fridays which are market days to

the border market located at Rwanda side (JBC & figure 14). During the visit the trade hub

concept was introduced to the border agencies. A consultative meeting with border agencies

was held and later an inspection conducted (fig 17). We found no clear buildings and space to

rent or put a trade hub facility (container, etc.). Other infrastructural facilities such as electricity

(including stand-by generator), telephone, internet (Telecom modems) were seen to be

available and in place (figure 18). Therefore this puts Rusumo at a hold up phase9 till the

Rusumo Women Group has registered and under gone capacity building arrangements

favourable for the piloting the establishing the trade hub are in place. It becomes fourth on the

prioritization scale for the pilot considerations.

3.2. Prioritizing the Border Posts for Establishing Trade Hubs

Prioritizing the border posts in Tanzania was based on the five parts criteria therein the matrix

below and in accordance with the terms of reference provided. The findings that are unique

have been segregated and scored against the respective border posts. There are those that are

cross-cutting across the criteria have been merged into one theme. The following section

presents summary findings of the four studied border posts for establishing trade hubs in

tabulated format.

ITEMS RUSUMO KABANGA NAMANGA MUTUKULA

Part I: Prioritize the border post in which to establish the trade hub on the basis of:

a). Volumes of imports that come from the neighboring country (s)

The volumes of imports that come through Rusumo border post in Rwanda stands at 1,091 tons valued at CIF $1,521,073 (see table 2).

The Import volumes that originate through Kobero border post in Burundi were established to be low at 85 tons valued at CIF $425,539 (see table 2).

The trade import volumes from Kenya and Mombasa through Namanga border post in Kenya stands at 124,384 tons valued at 215,538,852 in 2013 (table 2 below).

The general goods from the community that come through Mutukula post in Uganda stands at 44,303 tons valued at 18,936,275 in 2013 (table 2 below).

Table 2: TANZANIA IMPORTS AND EXPORTS THROUGH EAC KEY BORDER POSTS IN THE FINANCIAL YEAR 2013/14.

ITEM COUNTRY ANNUAL VOLUMES

RUSUMO KABANGA NAMANGA MUTUKULA

UNITS/YEAR 2013/14

CIF (USD)

CIF (USD)

Net Weight (KG)

CIF (USD)

Net Weight (KG)

CIF (USD)

Net Weight (KG)

CIF (USD)

Net Weight (KG)

GENERAL IMPORTS

397,025,908*

1,521,073

1,091,083

423,539 85,491 215,538,852

124,384,492

18,936,275

44,303,861

% Share 1 or 1or < 54 5

9 Hold up phase in the context of this study is the transition period through which a WICBT/MSME group will take to grow and attain capacity to manage

the pilot of establishing a trade hub at the designated border post. The period in the case of Tanzania could up to one year for all border posts.


of total volumes

<0.05 0.01

DOMESTIC EXPORTS

421,613,840*

91,050,919

85,044,416

105,424,539

138,658,428

146,269,393

160,530,596

49,255,342

35,244,332

% Share of total volumes

22 25 35 12

Source: Authors compilation based on TRA Annual statistics for all commodities of general Imports and domestic exports through community ports for the FY ending 2013 ** Import and export volume figures include other community border posts e.g. Sirali, Holoholo, Holili, Marongo, Tarakea, etc. NB: The trade volumes for imports/exports above were not possible to segregate them into determining the portions that related to WICBTs business and other trading entities/activities.

Score on scale* 3 4 1 2

b). Volumes of exports that cross border to the neighboring country (s)

The volumes of domestic exports destined through Rusumo border post to Rwanda stands at 85,045 tons valued at CIF $91,050,919 (see table 2).

The volumes of domestic exports that are destined to community through Kabanga border post to Burundi stands at 138,659 tons valued at CIF $105,424,539 (see table 2).

The volumes of domestic exports that are destined through Namanga border post to Kenya stands at 160,531 tons valued at CIF $146,269,393 (see table 2).

The volumes of domestic exports that are destined through Mutukula border post to Uganda stands at 35,245 tons valued at CIF $49,255,342 (see table 2).


c). Volumes of trade exchanges by WICBTs (as Associations or/and Individuals on both sides) at this border crossing from the neighboring?

Rusumo Women Group members are active in cross border trade during the market days on Tuesdays, Thursdays and Fridays. There are not specific trade exchanges known to take place both at an individual or group levels. Their counter-part WICBTs in Rwanda were said to organize into cooperative societies. “This level of organization makes it easy for us to access and buy goods from them” commented Pendo Bolingo a WICBT the chairperson.

Kabanga Women Group conducts their businesses on an individual basis. This implied that when there are any trade exchanges or it is not easy to tell or get to know. Any transactions of this nature are entirely private and unrecorded.

Namanga Women Group has no known trade exchanges either as a group or as individuals. According to Sara Keiya the leader of the Women Group, “there are could be cultural/social exchanges on some goods/items that are communal but dependent on individual relationship and common practices of extending sales/barter trade schemes. It is not possible to ascertain the volumes of trade exchanges”. Women Group members in the FGD further added that:- -There are not records kept by the associations - Transactions are individualized confidential and not easy to ascertain. -On average a WICBT makes 15

MUWOTA is comprised of both WICBT and MSME traders. Majority of MSMEs have capacity to deal directly with their counter-part association members in Uganda. These are Women ICBTs that own shops, schools, bakeries, market lock-ups and stores where they base themselves to run their cross-border trade The Chairperson Benuza Jane admitted, “that some level of goods exchanges may be taking place but it is not easy to know let alone record”. She is currently a dual chairperson of both WICBTs associations. On average 10-12 trips are made by MSME Woman trader and 1-2 times a day for WICBT either exporting or importing/bringing in commodities. No data on volumes of exchange = Less feasible -3


transactions every month trading in cattle and milk products selling them to Kenya. - Cross border trade by WICBT is characterized by perishable commodities such as tomatoes, milk, bananas, and onions.


d). Presence of WICBTs’ associations are at the border or proximity

There were no presences of other known WICBTs associations either at the border post or in the proximity at Ngara Town, save for Rusumo Women Group. There is VICOBA - a micro-institution branch in Ngara and its headquarters in Dar. VICOBA has 30 members some of whom belong to Rusumo Women Group. They meet together with other non-members to apply and receive loans weekly with a 5% quarterly interest. Scale No draft copy of the constitution= Not feasible- 3

At Kabanga border post only Kabanga Women Group exists. Helen Mkongwa, a trade development officer who supervises both Kabanga and Rusumo areas in Ngara District confirmed that there only two WICBT groups known and getting registered with her office. All the groups are located at the border posts. Draft copy of the constitution =Feasible- 2

-The Namanga Women Group leader – Sara Keiya had this to say, “There are a few women who know about formal Women ICBT associations and these are mainly from Mutukula and the surrounding areas. They also have heard about them in countries like Uganda, but have not yet seen them operate in Tanzania”. -Namanga border post has no WICBT formalized group or association known as yet. Namanga WICBT group that we held a meeting with is still informal and unregistered neither by themselves nor by the Namanga town council or Longido District. -There were no other WICBT groups or associations that were known to be in the proximity or exist within the district of Longido at the moment. No draft copy of constitution - 4

At the time of our visit, the Community Liaison Officer Anna Ndile confirmed only MUWOTA as the only WICBT association related with WICBTs. The group has already made a constitution (see fig 23 below). She attests that it was pending final amendments by the MUWOTA Chairperson and her executive committee before they submit it for onward approval in Dar for registration and license issuance.

Figure 23 -According to the Development Officer in the proximity there is Missenyi District and Town with over 200 other various groups of Women and youth both involved in different social and cultural activities. Scale: Draft copy of constitution near completion = Very Feasible-1

Score scale* 4 2 4 1

e). Key challenges the WICBT group or association face

RUSUMO WOMEN GROUP faces the following concerns as a group:- i). The delayed implementation of the ITC programme

KABANGA WOMEN GROUP was found to face the following issues as a women group:- i). The delays in the implementation of the ITC programme lead to

NAMANGA WOMEN GROUP was considered to face the following key challenges:- i). Their group has un elected leader

MUTUKULA WICBT Association - MUWOTA was found to face the following concerns to their association:- i). The association is led by a Chairperson – Benuza


lead to most members abandoned the initial association and left the association. The current group membership stands at 38 members. ii). All the members indicated capitalization for their projects and business is the main problem. VICOBA is the only government micro-finance institution that comes to their rescue to assist. Many conditional requirements such as registration certificate as collateral for the group members fails them. iii). The Women Group had not started registration processes with Ngara District authorities. vi). Accessing the simplified certificate of origin copies for use by group members who intends to export to Rwanda is very difficult. A member is required to travel to Bukoba or Dar. This increases the cost of doing export business and getting taxed heavily including agricultural products. iv). Lack of translations of common traded transaction documents and circulars from border agencies in Kiswahili for their members. But most members may be fluent in speech but very limited in reading such communication which has hampered their business opportunities. Scale: Less Feasible = 3

members becoming skeptical and left the association. Indeed the membership had reduced by half from 27 to only 15 members. However for registration purposes, a minimum of 12 members are needed. ii). There is absence of sustainable credit facilities and products to support group members’ businesses. VICOBA is a micro-finance institution that attempts to assist but has many demands such as registration certificate, collateral products from group members. iii). The Women Group lacks a formal structures and a place of abode to cater and provide answers to inquiries and concerns from women. v). Similarly, delayed formalization and registration of the Women Group has paralyzed a number of activities and probable participation in the JBC activities and meetings at the border. vi). There is a difficulty in obtaining the simplified certificates of origin copies for use by members who intend to export to Burundi. As a result every item exported across the border is taxed heavily including agricultural produce.

and about 21 members. The Chairperson – Sara Keiya remain the main contact person and her group is informal without any a document with rules and guidelines. ii). They are not yet recognized and registered by the National Chamber of Commerce as a result. iii). The group is not permitted to participate in the Joint Border Committee activities and meetings. iv). The Women group is neither part of the private sector forum nor allowed to become members unless they formalize and register with the Longido District Office. v). They have not yet made formal contacts and relationships with the Kenyan WICBT which was said to be more formal and organized. vi). Lack capacity and means/funds to start the process of group formation and registering into an association at the district. vii). The group members are conducting their ways and business transactions on individual basis and family support. viii). Restricted movement of border communities especially the Masai people (Masai WICBTs) whose ancestry

Jane Charles who is a Ugandan resident and origin. As an individual she is a university graduate, widely knowledgeable and has active business interests on both sides of the border. However, in the long –run it is generating debate and conflicts as to whether she should continue to qualify to hold two leadership portfolios for both WICBT associations in Uganda and Tanzania. ii). The current association that is prominent but pending formal registration is called Mutukula Women Traders Association (MUWOTA). The name implies Women Traders an association of a certain category of women that belong to micro, small and medium enterprises (MSMEs). The very informal women cross border traders feel left out and not belonging to this association. The above underlying concerns are known to the National Coordinator and are already dealing with such group dynamics till stability is secured in the process. iii). The association lacks a formal office or information desk that is available to cater and provide answers to inquiries and concerns from women. It is said to boost of over 48 members. v). Delayed formalization and registration of the association has paralyzed a number of activities and probable participation in the JBC activities and meetings at the border. vi). Lack of simplified documents/copies on the EAC regional and revised protocols, laws/ regulations that are translated in English and Kiswahili for their members has hampered their business opportunities. v). women address the risks they face in their trade related activities given that they are typically more risk averse than men and respond to risk in different ways. This reflects the particular challenges


grazing areas straddles and across the two countries’ frontiers and only limited to an official 10 km distance in-land on either side according to Immigration officials.

that women face in participating in trade and managing enterprises

Score 3 3 3 3

f). Services Association provide to Women members at the border

The expected services women members should receive from their associations and groups are generally:- - Calling for regular meetings to share on the border activities and understanding transformations taking place with the introduction and anticipation of OSBP facility service arrangements. -Arranging venues for regular group meetings at members premises or homes - Office for their record keeping, documents, stationary and files - Receive cross border trade related information and data compiled - Support from each other and making financial contributions for members when faced with challenging situations for instance when calamities occur, burial arrangements; social assistance such as community and social events, weeding parties, conduct training workshops, -Networking center with furniture and equipment to relate effectively with border agencies and counter-parts in the neighboring country. -Get services such as internet, photocopying and printing to aid and simplify their business dealings and knowledge.

Score 2

g). Survey on the level of challenges faced by women

A deliberate random sampling survey was employed to inquire from the WICBT group/association and other women at Rusumo, Kabanga, Namanga and Mutukula border posts to provide insights at key seven broad levels of challenges faced by women; i. Economic and Trade:- • Women are still experiencing persistent harassment for money, sex or exchange of goods by

some corrupt and unethical border agency officials; • Most women are not aware of the recent developments of introducing OSBP facilities and with

their associated modernization systems/procedures, border agencies laws and regulations and this gets used against them, i.e. the impact is more on the informal cross border traders;

• Numerous non-trade barriers (NTBs) are still a prevalent and a serious problem. For instance, local councils/townships fees/charges/levies and the parking fees introduced by the Longido (Namanga), Missenyi (Mutukula) and Ngara (Kabanga/Rusumo) Districts, police stoppages demanding bribes, etc.

• Challenges associated with management of SPS and lack of trade facilitation push traders to use informal routes. Many unnecessary clearance procedures were cited which resulted in long waiting times, such as the scanning and issuance of requisite documents for agricultural/animal produce. Some trucks had to stay at the border post for up to 2-3 days. These goods generally require SPS and veterinary certificates. SPS measures are regulations for food safety, animal and plant health standards which aim at enhancing consumer welfare through consumption of safe food products. SPS certificates are obtainable from distant district headquarters of Bukoba, Arusha or Dar-es-Salaam. Tradable goods (i.e. tomatoes/bananas) are usually ready for the market at the point they are being ferried across the border. Due to the perishable nature of the goods, the mode of transportation is generally trucks and the consignments could be for different cross border traders using pooled transport.

• Competition from counter-part WICBT members in Kenya, Rwanda, Uganda and Burundi on the account of Duty remission schemes and unfair tax regulations. NB: - Tanzania follows both the EAC & SADC tax regimes. This means there some contested commodities that will not enjoy duty remissions/tariff exemptions and other EAC partner states will not honor at all e.g. Rice and Sugar.

ii. Political:- The configuration and atmosphere in neighboring countries politics is varied and not commensurate with the cultural norms and social cohesion in Tanzania. For instance, WICBT allege encountering mistreatment by some border agencies’ officials whenever they travel to Kenya and Rwanda to sell or purchase commodities. Uganda was said to be fairly flexible in treatment with issuance of a chit that should last one day to have returned back into Tanzania. Rwanda is non-compromising on non-regulatory practices and conduct by some ICBTs. Imposes restrictions and controls to the mass flow of the traders with multiple tradable merchandize crossing on market days. Some Customs officials in OBR - Burundi were said to impose levies/taxes on every import whatever quantity and description of commodities crossing the border where they are not supported by documentations from the country of origin.


iii. Financing:- • Levels of securing credit and soft loans for doing business and expanding their business

volumes and lines has remained limited and scarce with women groups at Rusumo, Kabanga, Mutukula and Namanga. There are few women ICBT groups who have afforded to secure loans from banks or Microfinance institutions such as VICOBA

10. However, many of WICBT who fail

to get but still need loans have resorted to borrowing from friends, colleagues or family members. This process manifests with its own limitations such as failing to raise enough funding needed as well as destroying friendships once there are delays or fails to pay back the borrowed money.

• A few of WICBT groups have come up with the idea of cash-round groups, which are a form of rotational groups in which members regularly pool resources and give everything to one members until each member has had their turn. This method is proving to work for the women and they hope to improve these groups and formalize them.

• Mrs. Ndile Anna a Social Welfare Officer in the Community Development Office at Missenyi District Council made this observation: “There is generally lack of capital for women traders. We have tried to extend short-term loans to Women both old and young, but these loans are small. We have over 200 groups in the whole District, including other youth groups and so we only give to 6-10 groups, depending upon what the government can handle.”

iv. Social: - “There are some levels of discrimination and unfair treatment when one is conducting cross border trading in the neighboring Kenya and Uganda” claims one Florida a ICBT member. In Kenya for instance, Masai informal traders are harassed when they cross further inland into Kenya without any formal documentation to sell or buy milk and other cattle products. Tanzania Immigration claims that they allow their Kenyan Masai counter-parts a 10 km free zone kind of trade but this is not reciprocated by Kenya on the Tanzania Masai. Furthermore, there are levels of language barriers mainly on English that is used on official documents and daily communication in Kenya and Uganda. Some border communities for example Masai don’t speak Swahili at all or fluently which is an official dialect in Tanzania. The Tanzania education system was said to emphasis Kiswahili as a mode of instruction and teaching in most primary schools and English is introduced at secondary levels. This implies that most primary leaving graduates will communicate, write and transact in Kiswahili. v. Cultural: - The border post frontiers are inhabited by tribes/communities that share same language dialects and cultural backgrounds. Both communities share a high level of cultural bonding and inter-marriages. Almost all border communities/tribes such as Masai, Urundi and Rwandese cut-across the border lines and extend into Kenya, Burundi and Rwanda respectively. This implies that cross border regulatory regimes are considered interruptive to their social standing and harmony. vi. Technological:- Limited or lack of ICT knowledge and skills on both sides Burundi, Kenya, Uganda and Rwanda to conduct business with computers, internet and smart telephones. There is urgency to introduce computer related skills from the project design to implementation. The trade hub will be operated on the ICT platform in order to deliver real-time services. It will also create a quick/easy means to transact with border agencies which are already using high-tech to provide down-loads to ASY-World application, clearance service messages - SMS.

Score 3

h). Level of resistance to change of the agents of the border agencies.

The level of resistance to change by the border agencies’ officials had a common thread cutting across all the border posts at Rusumo, Kabanga, Namanga and Mutukula to be:- i. Attitudes of maintaining the status quo and order by border agencies was said to be prevalent. ii. Indifference to the plight, suffering and difficulties experienced by Women traders is a common occurrence. iii. New technologies, reforms, procedures/ processes introduced through institutional reforms to cause simplified, clarified and transparent trade regimes are disregarded or implemented in peace meals. For instance, the EAC Simplified certificate of origin value threshold of CIF $2000 is still not yet implemented but instead CIF $500 is applied on the basis of lack of COO documentation. iv. Lack of knowledge and respect of gender issues segregated and peculiar for Women, Men and Children operating at these border posts. v. High focus and overzealous on tax collection by Customs without any reasonable concern and understanding about women concerns and questions that beg answers/explanations during the process of trade transactions and tax assessments.

Score 2

Part II. Visit the border agencies to introduce the project and identify the best place to establish the trade hub:

a). Identify opportunities for networking between trade hub agents and customs agents at border

The following networking opportunities would obtain for Trade Hub Agents (THA) at both border posts of Rusumo, Kabanga, Namanga and Mutukula:- - The national WICBT association should apply to TRA – Customs to secure the licences of

offering clearing services. Then the national WICBT would register their membership with clearing fraternity both at their head office and border posts. Then WICBT associations at border posts would be eligible to assist their members and extend clearing services to all interested ICBTs.

10 VOCBA is a national micro-financing institution that assist and enable low income earners and groups to access low interest financing.


- Being a member of the customs agents’ fraternity may create further multiplier opportunities such as sharing or using the agents’ office counter within the OSBP facility as ‘a point of sale or help-desk’ for the WICBT members. Note that as matter of JBC border governance policy, WICBT in their current state don’t qualify to have space within the OSBP.

- There are more cooperation and linkage opportunities to quickly interface with Customs Agents Clearing Associations and their members.

- Polite Customs agents are most likely to extend support to the trade hub agent and also aid WICBT members in the process of clearances across border once WICBT associations become formal and attained membership to customs agents associations.

- Interaction and network opportunities for women would increase to get familiar and assisted by their cross border counter-part trade hubs and customs agents, WICBT associations in smoothening coordination with each other in the community (EAC) neighbours.

- Trade hub agents would be enabled to enjoy the benefits of interconnectivity, border management, modernization and collaboration with the existing automated border agencies.

Score 2

b). Identify agreement opportunities to provide women facilities in local customs for the provision of services with support of experts / agencies

A number of the agreement opportunities have been identified for the local customs to agree to provide services with support of agencies. These includes:- - TRA – Customs welcomes a legal entity and encourages such associations to enter discussions

of mutual agreement that may lead to signing an MOU. The MOU would qualify for interconnectivity and user rights for TANCIS system for purposes of getting the Trade Hub connected onto their e-Customs clearance system and network.

- The JBCs encourages individual WICBT associations at their locations to make a formal application for membership and recognition. The positive approval opens the possibility of getting WICBT leadership represented on the JBC governance structures at every designated OSBP border post.

- JBC Chairpersons would always invite WICBT association members to participate with other OGA’s during their sensitization sessions and key meetings.

- Customs was also interested in playing a key role of involving the WICBT members in their regular public-private sensitization sessions in accordance with their calendar of activities. Reciprocal invitations by the WICBT Associations would be extended to border agencies for their functions.

- Provision and putting up the notice board the list of EAC sensitive commodities that reflect tariff free components, VAT able commodities and exemption/remission regimes translated in three languages English and Kiswahili.

- ITC should be persuaded to fund the Trade Hub project for the next two years (2015/2016) till capacity in management and operationalizing the trade hub is achieved by WICBT

- Other Strategic Partners: Cross-Border local governments; relevant sector National Ministries ( e.g. Other Trade Support Institutions, Local NGOs, Trade, Internal Affairs), Customs administrations and Revenue Authorities, EAC Secretariat, GIZ, JICA, European Commission, UNDP, USAID, WB and TMEA.

Score 2

Part III. Conduct an inventory of existing infrastructures that can facilitate the establishment of the hub:

a). Premises available for Trade Hub

Rusumo border post has a near-complete construction of the OSBP facility. The external proximity of the OSBP facility is sprawling town with highly built but modest commercial and residential structures. The town is crammed onto a narrow and steep sloping landscape. The existing facilities are fully occupied and rented highly compared to other townships. It possible to negotiate for rented premises that can serve the purpose for establishing the trade hub (see Fig24).

Kabanga border post is undergoing massive reconstruction on a new site and location into an OSBP facility. The new location is about 1.5 km away from Kabanga trading center and 1 km from the old Customs offices. There are plenty of premises in the town center and just opposite the old customs offices (see fig 25) but with such a walking distance. Therefore, such a distance will favor the ‘trade hub outside’ the OSBP facility. The planned ‘entry inside’ the OSBP facility must start now so that by the time the facility is ready for entry early next year, WICBT with also have gotten prepared “The Chairperson of the

Namanga border post and its township are well developed to secure any amount premises needed. The fig 26 below is one section of the street road off the main road. OSBP development has spurred further growth and expansion on the town that has attracted both commercial and residential units to spring up. Therefore depending on the option of acquiring the premises for the trade hub, there are many houses potential

Mutukula border post on the other hand is equally structured similarly like Namanga. There is a fully completed OSBP facility simply waiting commissioning anytime the juxtaposed facility on the Ugandan side is completed. The external proximity of the OSBP especially the opposite side is sprawling town with highly built commercial and residential structures to serve every option decided (renting to purchase) on establishing a trade hub (see fig 27). During the joint meeting we held with the joint border committee chairperson and head of Immigration, he acknowledged the active participation of the WICBT members. Fortunately, the WICBT at Mutukula is


Fig: 24

JBC extended the promise to the Women ICBT Chairperson to approach him for consideration on space allocation after the completion and opening of the OSBP facility”.

Fig: 25

for renting (other options) both at nearby the OSBP premises and adjacent the road within a radius of 100 meter’s. The JBC chairperson indicated that “the absence of any formal WICBT group, no space was provided. However with the shift into the new facility, possibilities could be explored”.

Fig: 26

likely to receive a rare opportunity of being considered to for space to host the trade hub if it was established for piloting.

Fig: 27

Score 2 2 2 2

b). Electricity There is full supply of grid- electricity, solar energy and stand-by generating sets provided by the OSBP facility projects (see figures 28 and 29 below). That eases possibility of getting connected after formalities of application to the electricity service providers or JBC utilities unit. There is occasional loading-shedding that was mentioned which may requires provision of a stand-by generator or/and solar panels for solar energy installation to power trade hub equipment and lighting.

Fig: 28 Fig: 29 Fig: 30

Score 2

c). Internet Connection

Throughout the border posts, most of the key agencies especially Customs and Immigration were found to have their own Wi-Fi connectivity for their local area networks (see figures 29 and 30 above). Mobile Dongos or modems connectivity is also supported by the mobile telecommunications service providers (Vodacom, Smart & Zantel) for the internet installations. There are also internet roaming services available almost throughout the country trading/township centers. Most key agencies such as Customs, Immigration/Police were found to operate local area Internet connections and networks. It was established that through Mobile Dongos or modems of the Vodacom & Zantel telecom companies, internet services can be conveniently secured and installed.

Score 2

d). Telephone Connection

Land-line telephone cables/lines were found dilapidated but existing and not in use. In some border posts telephone lines were still connected and functioning but not popularly in use (see figure 30 above- common to all border posts). Even those offices with cable telephones that are connected still prefer to use mobile telephony which is handy and in common usage by all agencies and WICBTs members. In fact many WICBTs who participated in our FGD were holding mobile telephone sets. These wireless telecommunications service providers were readily available from Vodacom and Zantel telephone companies.

Score 2

e). Estimated Operating Costs At the moment the operations cost of establishing a functional and fully-equipped trade hub is not yet fully guaranteed at any of the four surveyed all OSBP border posts i.e. Rusumo, Kabanga, Namanga and Mutukula other than promised indications. The two assumed and estimated start-up costs for scenario (i) & scenario (ii) are based on two premises i.e. operating while inside the OSBP facility at USD$18,600 and/or outside the OSBP facility at USD$43,700. The additional costs for scenario (ii) is intended to cater for trade hub services related to capacity building that cannot be conducted while operating inside the OSBP facility (i). Operating Trade Hub inside the OSBP facility as a central point where women ICBTs/MSMEs can access assistance related to


customs procedures and export requirements, answers to common trade facilitation hurdles such as questions on trade compliance and export market-related information and assistance.

Item Description of Expenditure Unit Amount in US Dollars

Shared servicing costs to the facility (partitioning, utilities, cleaning, repairs, etc.) p.a. $3,000**

Trade Hub Agent – Salary/Allowances/accommodation p.a. $3,600

Office Furniture (1 office desk + chair, 3 setter for visitors, book shelf) - $2000

Office Equipment (Desk top computer set, Lap top, Multi-purpose Photocopier/scanner) - $5,000

Office Stationary and office accessories p.a. $2,000

ICT equipment’s (Internet service provider/accessories, connectivity and maintenance) p.a. $3,000

Sub Total for establishing Trade Hub inside the OSBP Facility= USD$18,600.

Total estimated cost required to operate while inside OSBP facility = USD$18,600 NB: Even if authorisation to access the OSBP facility is obtained, there is still need to secure a place outside the facility to conduct other trade hub services below in (ii) below. (ii). Operating the Trade Hub outside the OSBP facility where women ICBTs/MSMEs can access other assistance related to capacity building services (training, workshops, conference, regular meetings, etc.) additional requirements to (i) above will apply to ALL the four border posts at Rusumo, Kabanga, Namanga & Mutukula)

Item Description of Expenditure Unit Amount in US Dollars

Hiring space for meeting (4 times)* p.a. $1,500

Rented premises* p.a. $2,400

Hiring conference seats/chairs 30 all P.a. $1,000

Buying a projector – one off cost. @ $2,000

Rented plot/land for placement of the fabricated container or Prefabricated office (prefab)++ p.a. $1,200

Cost of fabricated container @ $8,000-12,000 (took upper) or Cost of prefabricated office @$12,000-16,000 (took upper)*

- $16,000

Tent (50-100 setters) for regular meetings/conferences/seminars; alternative for renting room for conference/workshops/large meetings*.

- $5,000

Solar panels (2 sets plus batteries) amount to minimize on cost of using the generator daily. - $1,200

Generator set to power office and ICT equipment; to cater for power break downs or complete absence of grid power.

@ $1,000

Assistant Trade Hub Agent – Salary/Allowances/accommodation or $200 per month to maintain the trade hub outside the OSBP facility.

p.a. $2,400

Office Furniture (1 office desk + chair, 3 setter for visitors, book shelf) totaling for the second office outside the OSBP facility.

- $2000

Office Equipment (Desk top computer set & Multi-purpose Photocopier/scanner) for the second office outside the OSBP facility.

- $3,000

Stationary and office accessories additional to the second office outside the OSBP facility. p.a. $2,000

Additional ICT equipment’s expenses (Internet service provider/accessories, connectivity and maintenance)

p.a. $1,000

Contingency fund p.a. $2,000

Sub Total for Establishing a Trade Hub Outside the OSBP Facility= USD$43,700

1. Options and variations on the costs for asset acquisition for a single Trade Hub:- a. ++ Usage of rented premises means less container/prefab/Tent/rented plot-land i.e. $43,700 – $16,000 – $5,000 – $1,200 = USD$21,500 b. Usage of rented land means less rent for premises i.e. = $43,700 - $2,400 - $1,500 = USD$39,800. c. Using purchased and owned land means less rent for premises & rented land/plot i.e. =$43,700 - $2,400 - $1,200 - $1,500 = USD$41,000 d. Other options may include a one-off sunk-cost of purchase of a housing unit at Rusumo ($30,000), Kabanga ($25,000), Mutukula (30,000) and Namanga (40,000); or generally purchase land (<5,000) to build a permanent unit /structure of a trade hub within the township around the border posts. 11. Overall total estimated costs for establishing and implementing a single fully-fledged TRADE HUB operating both inside and outside OSBP facilities is a sum total in three options:- USD$39,100, 57,400 & 58,600 computed as follows:- Option 1 (a)- USD$21,500 + $17,600= USD$39,100; Option 2 (b) – USD$39,800 + $17,600= USD$57,400; Option 3 (c) – USD$41,000 + $17,600 = USD$58,600. ** All figures were estimated according to the inquired prevailing market rates at the time of this study and found to be similar in scope and figure at all the four border posts.

f). Estimated time for the implementation of the hub. NB. The phased stages here assumes a decision that considers full implementation that demands a level of preparedness ranging from 6 - 12 months i.e.

Rusumo Women Group is getting started to draft their constitution. The group needs urgent rejuvenation to attract more members and start being active. The following phased approach and stages below is estimated to cover 12 months:- Registration

Kabanga Women Group has reached a draft stage of their constitution making. Such a stage will reduce timeframes on the registration phase perhaps by three months. The group too need to get organized in leadership and management committee structures and increased membership to get formidable to

Namanga Women Group requires detailed stages of group dynamics training processes that lead to association formation, registration and capacity development of the members. The overall implementation stages and period

MUWOTA as an association is well organized in terms of management structure and committee. As highlighted above, they have a near-complete constitution, some of their members are capable of receiving expert training to be able to manage and administer the implementation of the Trade Hub project. In order to determine an estimated implementation


Rusumo -12, Kabanga- 9, Namanga – 12, Mutukula - 6

Phase -Further group dynamics training is needed. -Association formation and capacity development of registered members -Drafting of the first constitution document for their group is done. - Registration of members, Association and incorporation of the Association (this takes a minimum of 6 months). Phase One: -Develop and Implement a pilot operations activity plan/objectives for Trade Hub functionality and management Phase Two: -Establish physical premises/office and location best nearest customs and OGA’s within the OSBP. If not possible next or proximity of the OSBP facilities Phase Three: -Equipping and Furnishing the trade hub center/office ready for the piloting stage. Phase Four: -Installation of the ICT functionality, Internet services and inter-connectivity process with border agencies. Phase Five: -Provide information and business advisory services to women Phase Six: -Train women in ICBT Associations Executives and Trade Hub Agents on the Trade Hub operations to acquire Entrepreneurship, Change management skills Introduction of governance skills and Implementation

implement the trade hub pilot following phased approach and stages below:- Phase One: -Develop and Implement a pilot operations activity plan/objectives for Trade Hub functionality and management Phase Two: -Establish physical premises/office and location best nearest customs and OGA’s within the OSBP. If not possible next or proximity of the OSBP facilities Phase Three: -Equipping and Furnishing the trade hub center/office ready for the piloting stage. Phase Four: -Installation of the ICT functionality, Internet services and inter-connectivity process with border agencies. Phase Five: -Provide information and business advisory services to women Phase Six: -Train women in ICBT Associations Executives and Trade Hub Agents on the Trade Hub operations to acquire Entrepreneurship, Change management skills -Introduction of governance skills and Implementation of the WICBT Code of Conduct. -Monitoring and evaluation by the TSI responsible for the Trade Hub The estimated total time is expected to cover a period from December 2014-November 2015 (Nine Months)

of the TH should follow a phased approach as below:- Formation Phase -Group Dynamics training -Association formation and capacity development of registered members -Drafting of the first constitution document for their group. - Registration of members, Association and incorporation of the Association (this takes a minimum of 6 months). Phase One: -Develop and Implement a pilot activity plan and objectives for Trade Hub functionality and management Phase Two: Establish physical premises/office and location best nearest customs and OGA’s within the OSBP. If not possible next or proximity of the OSBP facilities Phase Three: -Equipping and Furnishing the trade hub center/office Phase Four: -Installation of ICT functionalities, Internet services and inter-connectivity with border agencies. Phase Five: -Commence customer care services of providing information and business advisory services to women Phase Six: -Train women in ICBT Associations Executives and

time, the following phased approach and stages below suffices:-

Phase One: -Develop and Implement a pilot operations activity plan/objectives for Trade Hub functionality and management

Phase Two: -Establish physical premises/office and location best nearest customs and OGA’s within the OSBP. If not possible next or proximity of the OSBP facilities

Phase Three: -Equipping and Furnishing the trade hub center/ office ready for the piloting stage.

Phase Four: -Installation of the ICT functionalities, Internet services and inter-connectivity process with border agencies.

Phase Five: -Provide information and business advisory services to women Phase Six: -Train women in ICBT Associations Executives and Trade Hub Agents on the Trade Hub operations to acquire Entrepreneurship, Change management skills -Introduction of governance skills and Implementation of the WICBT Code of Conduct. -Monitoring and evaluation by the TSI responsible for the Trade Hub The estimated total time is expected to cover a period from December 2014-June 2015 (Six months).


of the WICBT Code of Conduct. The estimated total time is expected to cover a period from December 2014-November 2015 (12 moths).

Trade Hub Agents to acquire Entrepreneurship, Change management - Introduction of governance skills and implementation of WICBT Code of Conduct -Monitoring and evaluation by the TSI/Agency responsible for the Trade Hub. The estimated total time is expected to cover a period from December 2014-November 2015 (12 moths).

Score 3 2 4 1

Part IV. A women's needs assessment in terms of expected trade hub:

a). What are the required opening hours?

Rusumo Women Group proposed gradual opening hours between 07.00 to 22.00 hours daily. They supported an incremental opening hours starting from 07.00 to 18.00 hours till they achieve 24/7 for OSBP cycle of operations. The border posts will soon opened as an OSBP facility and services early next year. The juxtaposed Rusumo border at Rwandan side opens 24/7 hours/days.

Kabanga Women Group wished to start at 7.30 to 20.00 hours as soon as the border is fully operational. They are supporting an incremental to 24/7 operations cycle. Correspondingly, Kobero OSBP is also in the similar process of trade hub implementation. The women were determined to cope with the changes and in the long run increase their trade sales turn-over.

Namanga Women Group wanted to open from 7.00 to 19.00 hours. They are studying the new juxtaposed type of OSBP concept on both sides of Tanzania and Kenya frontiers. The Tanzania OSBP facility is almost complete pending their counter-part on-going construction at the Kenyan side of the border. On full implementation, the operations time and service will be progressively increased to 24/7 basis. The same desirable time for any cross border business traders would be 24/7 supported by the WICBT group.

The MUWOTA members confirmed readiness to adapt to 24/7 operations cycle when the operations cycle of the key agencies is officially launched for 24/7. Mutukula border post OSBP was completed almost one year ago and is pending completion of the juxtaposed facility on the Ugandan side. This waiting has prepared the mind-set of the ICBTs to adapt the anticipated OSBP operations cycle. At the moment the border opens from 6.00 to 20.00 hours cycle.

Score 4 3 4 2

b). What are the main services expected? NB: Majority of the WICBTs interviewed believed that the establishment of the Trade Hub

Women Cross Border Traders and other interested partners/parties would expect the following main services from the set-up and established trade hub:- - A place where members will go and receive explanations/activities that develop commercial

exchanges at border and new correspondences from border agencies - Provide technical advisory services on export trade, EAC trade regional policies/regulatory and

other related issues on the trade-offs between other neighbouring countries. - Regularly organise workshop/training, sensitization, and counselling sessions for WICBT

members. - Provide business and legal/ regulatory support services to women traders for the growth of their


and the services delivered will create demand and motivate very many passive members to join the associations.

capital and capabilities to mobilise financing for their projects. - Establishment of the trade hub will instil trust and reinforces commitment to members present

and those who had gotten dissolution and quit the existing Women Groups. - Educate women on taxes and payment of taxes, non-tariff barriers as well as advocate for their

reduction, provide information on investment and growth opportunities for women across borders seeking it or not informed

- Provision of ICT & internet services free to subscribed members or at modest fee for non-members as appropriate.

- Secure members subscriptions and savings from members and provide customer care with a degree of tolerance to clients with erratic behaviors.

- Produce and develop a number of knowledge products such as videos, pamphlets, newsletters, booklets, CDs, newspaper clips, checklists, guidelines, strategies, in order to share knowledge with the neighboring countries.

- Declaration and lodgment through trade hub agent who using the trade hub automated facilities should assist them in their transactions.

- Expect the trade hub to make linkages and networks with cross border associations across the border in the neighboring country.

- Can register for secretarial and money changing business/services for members.

Scare 2

c). What are the main problems that women face?

Border agencies and Women ICBT elaborated in details the common challenges/problems faced by women at all the four border posts as follows:- - The key determinants of ICBT problems includes:-

Lack of best practices in the various areas of trade facilitation such as publication of trade regulations, trade procedures/documents, procedure standards, public-private sector collaboration, etc.

Inadequate border infrastructure in terms of space allocation for their association/group office within OSBP, health/hygiene issues;

Corruption, bribery & insecurity from some border agency officials; Limited knowledge, education & business management skills.

- The Women traders reported that they lack adequate capital to venture into expanding their businesses that would fetch higher returns and profits. They have limited access to formal financial services banks/institutions with their products such as interest-low loans, savings and credit. Many of WICBT members lack collateral to access loans from banking institutions. In time of need, women traders turn to relatives and other traditional sources of lending who provide only a small amount of credit, with short-term repayment requirements.

- The traders complained of escalating transport costs attributed to the increase in inflation, volatile exchange rates and national fuel prices. They complained that transport costs are making cross-border trade extremely costly and in turn biting into and eroding all their profits. Most women traders also face frequent delays with public transport, forcing them to miss regional market days and causing consumable items such as agricultural fresh and processed food to perish.

- Although within the EAC customs union imposing import tax rates on goods produced within the region is prohibited, women complained that in few instance import duty is imposed and other associated taxes (VAT, W/Tax, Excise duty, etc.) for goods imported from neighboring countries are charged. Some bold WCBTs have demanded a list of items that attract such or nil taxes but to no avail which makes the cost of goods passing through the formal borders very high. The more justification WICBT are compelled to resort to informality practices to trade across borders.

- Since most women traders operate outside of mainstream business circles, accurate market information often does not reach them. Women obtain market information on price, supply, and demand from fellow cross-border traders and at times speculators. These unreliable informal channels of information often lead to saturated and speculative markets.

- Fluctuations and volatility of exchange rates is also a crucial challenge because at the border posts many transactions are done in more than two different currencies whose exchange rate keeps fluctuating, leading to losses quite often.

- Although Kiswahili is the official and common language at the border posts of all the neighboring countries, not all women traders use it and majority of their clients are not fluent in it either. This makes it difficult to discuss with clients and conclude transactions.

- Expressed fears of establishing the trade hub with questions such as who will cater for rent, pay salaries for trade hub agent and need to learn computer skills?

- Lenders and borrowers within the women groups and other sources face huge defaulting incidences due to lack of trustworthiness from members.

- Lack of trust and acceptance from the government agencies and border stakeholders.

Score 2

d). Trade hub agents have to physically accompany the exporters in

Trade Hub Agents (THA) key roles should be essentially customer service and capacity development provision. THA may require to physically accompanying the women exporters in circumstances where crucial assistance is demanded. Overall, the THA should conduct, but not limited to, the following responsibilities to the exporters:- - Provides necessary export information (market risks, prices, products on demand, potential joint


their approach or only give them the information?

ventures, currency fluctuations, etc.) opportunities to neighbouring countries and beyond. - Regular and continuous workshop/training, sensitization, and counselling. - Assists export traders complete customs & OGA’s documentation processes, - Provides business and legal/ regulatory support services for women inquiring exporters - Provides up-date information on EAC trade regional policies/ regulatory and other related

issues, investment and growth opportunities for Women cross border exporters - Educates women exporters on border agencies’ systems and procedures and non-tariff barrier

aspects as well as advocate for their reduction

Score 2

e). What is the number and frequency of requests?

The number and frequency of requests from Trade Hub Agent will depend on the level of activities on a particular days, operational demands and on case-by-case basis:-

Technical issues/aspects needed by women arising out border transactions and concerns

Case/conflict resolutions occasioned by women or/and suffered from border agencies.

New WICBT arrivals and those in transit that require assistance and new information The number should not exceed up-to- four times in a day. The frequency should also depend on the high to low peak times at the border posts.

Score 2

f). How to establish a system or methodology to collect statistics and information about the women’s operations, problems and solutions provided by the trade hub

The system or methodology to collect statistics and information about the women’s operations, problems and solutions provided by the trade hub could be established by the following key considerations characteristic to all border posts:- i. Group and formally associate WICBTs at the border posts. This introduces the ingredients of member registration, obligations/roles and responsibilities and possibility to relate with other formal structures. ii. Training on systems and procedures for record keeping, opening and maintaining registers, book keeping methods on their business projects/units. ii. Introduce clearing services register for WICBT so that those that will get assessed through the Hub, their records and data will be kept iii. Introduce the serialized identity cards for all registered members and align them to individual MSMEs members with TINs for possible and easy of reconciliation with Customs/OGA’s. Those without TIN numbers should have their own column and profile. iii. Draw an activity register (manual for the start and letter in soft copy) to initiate a daily record of problems ( incidents, actions, cases) and resolutions provided with the intervention of the THA. iv. Design and distribute to all WICBT associations a recording template to collect statistics and information that will be submitted in monthly reports. v. Continuous updating the associations’ members records between the Trade Hub and Women ICBT groups.

Score 3

Part V. Identify women's associations who can provide the human resources needed to operate the hub:

a). Identify existing women's associations

RUSUMO WOMEN GROUP is the identified women group at this border post. The group still in the process of registration. At the time of our mission, the women group was still in the process of making a draft constitution.

KABANGA WOMEN GROUP is identified women group at Kabanga border post. At the time of our mission, the group had already submitted a draft copy of their constitution to the community development officer at Ngara District for review and appropriate changes. (A draft copy was presented)

Namanga Women Group is the group that was identified at Namanga border post. The members all belong to the category of WICBTs and wished to be called Namanga Informal Cross Border Traders Association. NAWOTA is still forming and requires further support to get through group dynamics/training and registration processes/ stages.

Mutukula Cross Border Traders Association (MUWOTA) is highly structured and organized. At the time of our mission, the association registration process had completed the District Development vetting process and the constitution was being referred to members for the final amendments. The final registration process will require approval letter from District Commissioner, before a Certificate of Registration is issued by the Ministry of Home Affairs, in Dar es Salaam.

Score 4 3 4 1

b). Identify existing expertise on each border

On the basis of the questionnaires filled WICBT members on the executive and admission by the chairperson Grace

According to the questionnaire filled by executive WICBT members and as confirmed by the chairperson Adelaide

Namanga Women Group (and the questionnaire filled) indicated that the

Mutukula Women Cross Border Traders Association (MUWOTA) indicated a potential of over 10 potential members that can exhibit expertise


Edison – Rusumo Women Group, the necessary expertise was very limited and inadequate due to low education levels. Most of the members had completed only primary level of education. The expert knowledge that is worth mentioning includes Kiswahili speaking, writing and reading which is at the same time a national medium of exchange. The members also possess cross border and trans-national trading knowledge that could be tailored into standard training materials and use them to training others.

Majanja – Kabanga Women Group the necessary expertise was found narrow and inadequate similar to Rusumo due to very low education levels. Most of the members had completed primary and lower secondary level of education. The only expertise identified would be Kiswahili language fluent speaking, writing/reading and good knowledge of cross border and trans-national trading practices. A few members could qualify to be trained into train of trainers’ roles for their fellow members within their competency areas above.

association members completed utmost secondary/primary levels of education. Chairperson and the treasury completed Secondary level of education and could be trained to provide the human resources needed to train other members to operate a TH in the long run. With majority members said to have primary level of education and other none all (can’t read and write). The resource expertise that is identified includes the capabilities of speaking the national language, reading and writing for the few members to assist their members. At the moment one is safe pointing out absence of expertise at this border. This will require external expert support.

to train others but also manage the trade hub. Of the eight executive members of the committee and who filled the sample questionnaires, five were said to possess university and tertiary/college level of education - university (2) and Tertiary/ College (3) education level. The Chairperson Jane Benuza Charles is a University graduate. Therefore, it can be believed that the members with such a level of education are easily trainable into experts. These members would constitute a core group of experts (trainer of trainers) to assist in establishing and administering the Trade Hub in other border posts as well.

Score 3 3 3 1

c). Identify the specific training needs to develop services for women

The performance of exports to neighboring countries is conducted both in volumes and quantity. The identified training needs specific to develop services for women will include five levels:- (i). Business and Technology Diversification. Learning about personal Information, safety, health/hygiene, trade hub concept & its relevancy, basic computer & mobile telephony skills, low-cost technology and equipment that could create value addition to their existing businesses. For instance, weighing scales, cereals/produce sorting and grading machine, juice production and bakery equipment could be imported from Chinese markets as low as CIF $300-500 a package. (ii). Product Management and Trading Ethics. Training of WICBTs on export strategy, create marketing skills, innovation in business products, product improvement and diversification, business planning and managing small scale projects and Trade Hub operations based on the WICBT code of conduct (iii). Export Policies, Laws and Procedures. Target training of relevant border laws, procedures and policies on mainstreaming WICBT issues in cross border environment and within the national and regional context and legal regime. Sensitization on EAC trade policies, legislation, programmes and budget support in order to promote WICBT. (iv). Continuous Capacity Development. Further specialized training of WICBTs on starting and management of export small/medium business, access to export markets and inputs, access to resources, registration of business and other relevant information. (v). Sensitization of Border Agencies. Training for cross border agencies’ officials (Customs, Immigration/Police) as service providers to understand how to relate, impart knowledge and offer services to WICBT groups in different sectors.

Score 2 3 4 1

d). Identify among these associations

Rusumo Women Group (as called by the Community

Kabanga Women Group (the name in their draft constitution) is

Namanga Women Group is the only potential

Mutukula Women Cross Border Association – MUWOTA was already


potential candidates for trade hub

Development Officer) is identified to form the nucleus and candidate for the trade hub only after the due process of registration of their association is completed. NB: - The Women Group will have to undergo a comprehensive group dynamics and formation training process. As this is being done, registration process of their association should be finalized with the District authorities at Ngara – Not feasible

the candidate for the trade hub. The Women group already has prepared a draft constitution and pursuing the due process of registration into an association with the district authorities at Ngara District Headquarters. NB: - The Women Group has already undergone a group dynamics and formation training process. The pending constitution making registration process of their association should be finalized with the District authorities at Ngara- Less feasible

candidate for the trade hub. The group was seeking support to aid them draft the constitution and get it submitted to Longido District headquarters for review and subsequent approval. NB: - The immediate support the Women group at Namanga required is to undergo a comprehensive group dynamics and formation training process. In the meantime, the association would be progressing with registration processes at the same time. Not feasible

formed and advanced in the registration stages with the Missenyi District authorities. At the moment the association is the most appropriate candidate for the trade hub. The association constitution was available in its last draft version and pending final revision by members and submission. NB:- Capacity building with MUWOTA would emphasize more on group leadership and membership governance and cohesion, trade hub service provision and management. Very feasible

Score 4 2 4 1

e). Assessing training needs in export management

Training needs assessment in cross border export management found that WICBT must acquire confidence, knowledge and skills in the following four identified areas:- i). Product Production and Operations Management. Export starts with learning production process of activities engaged in trade. For instance, agricultural activities are estimated at over 80% of the commodities exported across the border. Target areas would include how to know ones product, sustain the productivity sources and seasonality, quality assurances and control of the products, how to manage inventories/securing warehousing, value addition systems/processes using affordable tools, etc. ii). Marketing Function. The marketing activities both at local border – international destinations will include analysing market opportunities, product planning/production, pricing mechanisms, distribution channels, promotion advertising, sales management and distribution joints. iii). Internationalization of Cross border Business. Learning basic stages that any individual/firm takes a decision to enter a foreign market i.e. from just across the border posts/town to further country inland and inter-community states , for instance Tanzania traders to partner states and trans-national states e.g. DR Congo/ South Sudan) and finally through lake/sea ports to global markets. This involves learning how to secure a trading license; analyze risks associated with transit of commodities, currency fluctuations and defaulters of credit purchases. iv). Customs Procedures and Export Trade Facilitation Measures. This involves a whole package of learning cross border export procedures, logistics and supply chain from origin to destination and vice versa. Such processes and systems of all exporting cargo across the borders will range from getting export license/ certificates from relevant government border agencies, clearing services for aiding the declaration, approval and exit process, arranging transport and insurance services.

Score 3 3 3 2

Total Scores 71 - RUSUMO 65 - KABANGA 68 - NAMANGA 55 - MUTUKULA

Source: Study & Field Findings Key on Prioritization Scale (PS) Scores:- 1 = Very Feasible; 2 = Feasible; 3 = Less Feasible; 4 = Not Feasible. The less the score the most likely for the event to occur and higher the prioritization of the border post when introducing the trade hub.


4.0. POTENTIAL BENEFITS FROM ESTABLISHING THE TRADE HUB AT BORDER POSTS

The establishment of a capacity trade hub can be highly beneficial to all small WICBT, MSMEs, other ICBTs and public agencies involved in cross border trade:-

4.1. General Benefits From Establishing Trade Hubs • Increasing the efficiency in the cross border clearance process and provide better

advisory services and crossing clearance certainty. • Saving of time and costs due to one stop service center and services availability 24

hours, 7 days a week on either side of the border when operating inside OSBP. • High chances of leading to formalization of cross border traders from informality

hence will be a lot easy to obtain reliable statistics on external trade by stakeholders. • Better conditions for increasing collection of the revenues based on coordinated

approach between Trade Hub Agents, WICBT/MSMEs and Customs/OGA’s. • Enhanced security as a result of centralized approach to the cross border information

with police, security and other enforcement agencies. • Standardized and harmonized data and model structure, ready for more

comprehensive exchange of information and coordinated risk assessment especially in an environment where there is a single window system. In the EAC region, Rwanda is implementing a SW.

• Improving the competitiveness of small WICBT, MSMEs and other ICBTs that use the trade hub with neighboring countries and in the intra-EAC regional business.

• Reduced levels of inadvertent non-compliance, leading to better ability to focus on those WICBT/MSMEs that actively try to avoid regulations.

• Better quality of information by increased sharing of information with government agencies – leading to improved security and risk management

• Interconnectivity of the trade hub with OGAs leads to better ability to lodge on-line, target consignments to be inspected and effective service delivery to WICBT.

• Easier linking access to information through from all authorities involved by WICBT members – leading to time savings when looking for information and increased compliance due to better understanding.

• Fewer delays, less uncertainty, and more targeted inspections through better coordination between authorities involved and the WICBT using the trade hub;

• Lower barriers to trade, which makes it possible for WICBT/MSMEs to focus on strategic and commercial considerations as opposed to informal and irregular practices.

4.2. TANTRADE

The capacity trade hubs will provide majorly:- • Information and data will be easily received from e-registers of all members,

associations and business transactions for effective coordination, assistance and feedback.

• Important information for appropriate product specific market research as well as understanding the dynamics of regional demand of certain products from the informal markets will be obtained.

• Direct linkages and easy coordination with WICBTs leaders and members on the ground.


4.3. Tanzania Revenue Authority

When more and more informal cross border traders uses the trade hub Centre at the border, then the following benefits will be in favor of Tanzania Revenue Authority (TRA):- • A one single stop clearing facility for mobilizing and developing the informal traders is

established for convenient monitoring and contact. • Better risk management and possibilities of revenue increment, including the amount

of VAT and other appropriate taxes. • Establish order and organization of individuals and their transactions into the

associations for easy management and monitoring. • Formal trade increase will support trade compliance and data/information for

statistics purposes for the country. • Reduce smuggling practices even when goods may be tax exempt. • Reduce incidents of over and wrongly assessment on commodities from the EAC

region including abuse of Simplified Certificate of Origin application. For instance, under the customs regime the small traders with goods worth less than US$500 (CIF $2,000 is the threshold in the EAC) should be treated differently. They do not need to pay to use a clearing agent. Instead Customs staff should fill out the form for them (at no charge) and they pay a small amount of duty depending on originality. In the absence of such a service the trade hubs should be permitted.

4.4. EAC and SADC There are broader benefits accruing in complementing the efforts of regional integration at such micro level when WICBTs improves to formality their trading practices. The following is noted:-

• The capacity trade hub is not re-inventing wheel but rather rendering support to the realization of gender mainstreaming regime in trade facilitation in both EAC and SADC regional groupings.

• At a regional level, some EAC and SADC member states have already introduced trade hubs on a pilot basis and established information and advisory centers for data collection. Benchmarking and synergizing with them would yield better results without risking resource duplication.

• The trade hubs will also bring the much needed trade facilitation services closer to both the women informal traders and MSMEs who will enhance their businesses competitiveness and reduce the cost of doing business.

• In addition the trade hub will play a complementary role in EACs integration efforts to streamline and formalize cross border trade serving as linking service centers to the governments’ trade support institutions and chamber of commerce. It can also promote inter-trade hub cross-border cooperation on both sides of the two neighboring countries.

• Other benefits will continue to be realized under capacity development, information access and utilization, ICT connectivity/interconnectivity and interface under the national and regional on-going One Stop Border and future Single Window Projects.

5.0. CRITICAL SUCCESS FACTORS FOR ESTABLISHMENT OF ICBT TRADE HUBS

The decision to inform the establishment of the trade hubs in Tanzania successful border posts

should consider the following critical success factors:-

• Two Best Sites/Locations: Trade hub site location should be determined by space allocated based on the service provision. Best located within the OSBP facility. However, if space in the OSBP facility is insufficient, then use the allocated space for desk customer care activities. Where no space is available inside the OSBP, then site location


in the vicinity/ proximity to Customs/Immigration offices, a distance not exceeding 100-200 meters is appropriate.

• Duration: Aiding the process of setting up and piloting period with the WICBT associations should target a gestation period of 6 months up to 12 months at the minimum. This is so as the current conditions at all the four border posts lack the self-sustaining capability neither by the associations nor by its members to kick-start any piloting activities.

• Commencement (Piloting or/and Establishment): Where initial access to the OSBP

facility or even Customs Areas is denied and perhaps not possible, but other factors becomes favorable, a suitable and strategic place within the border post could be secured to start the trade hub as a capacity development facility. A big-bang approach in form of equipping and furnishing the trade hub facility and public display can be considered. However this must be done concurrently with aiding to put in-place viable associations so as to participate in operations of the trade hub.

• Beneficiaries: Primary: - WICBT/MSMEs –members and non-members must exist in a

registered association/cooperative at the border post as a foundation support for operationalization and sustainability of the trade hub in due course. Secondary: - Other interested Cross-border traders/ travellers/communities, border agencies, TSIs, Chamber of Commerce, etc. will be served and attracted to support the trade hub as key stakeholders.

• Recognition and acceptability: - It is critical to secure recognition, strong collaboration

and acceptability from relevant border agencies and private sector to the established WICBT/MSMEs trade hubs at the onset. This is why TANTRADE involvement is critical for entry and recognition during launching phase publically and over-seeing trade hubs through the various development and operationalization stages.

• Implementing Strategic Partnership: Effective start-up and establishing trade hubs is

best when local WICBT/MSMEs formal group at border post receives joint-partnership support from International Trade Center and TANTRADE in Tanzania. Other potential development agencies such as TMEA, DFID, GIZ, European Commission; UNDP, USAID, relevant sector National Ministries (Trade & Industry, Public Works), EAC Affairs, COMESA, NGOs, national and regional Customs and Revenue Authorities could be interested to participate and render support along the way.

• The inter-institutional coordination and capacity of trade facilitation agencies and

Trade Support Institutions in Tanzania, especially at four border posts must be willing to support women ICBTs/MSMEs leading to increased trust in transparent & commitment, streamlined cross border formalities and increased voluntary compliance.

• The Women ICBTs/MSMEs associations in Tanzania: The nine women groups with

their critical mass of over 300 women traders should agree to belong to a national umbrella forum/ association that make it easy to have a strong platform to promote their advocacy and aspirations with government/private sectors. Such a united front will make it feasible to apply for a TIN and push for a customs clearance agency license and services from TRA. Quick wins to use trade hubs clearance centers, fast entry into OSBP facilities or /and Customs Areas and get revenues from service fees for sustainability.


• The Tanzania Women ICBTs/MSMEs members continue to get sensitized and assisted

to comply with trade facilitation formalities and formalize to transition to MSME status within 2-3 years.

• The capacity trade hubs will continue to function as capacity development and help

desks at designated and established border points as possibly will be clearly spelt-out in the MOUs; and NOT to the contrary, abused or misused by the WICBT leadership/committee members or even exploited by third parties e.g. politicians and any other local interests.

• Ethics and integrity. The Capacity Trade Hub will be operationalized and managed to

engender the code of conduct (COC) for the Women ICBT and MSME’s - an output of phase I project. The COC contain standards and principles for the conduct, ethics and integrity of business activities and trading transactions across the borders. It is aligned to the EAC gender sensitive Integrity Action Plan which emphasizes standards of professionalism in trade facilitation.

• Financial options and Sustainability: - The Trade Hubs sustainability lies in their

ability to become self-income generating units. Before that happens traditional funding support from ITC and TANTRADE is critical to establish a take-off stage whenever it obtains. The local border post WICBT associations should only take-over after they have proven resource capabilities. TANTRADE together with the national WICBT/MSMEs in Tanzania should take over the initial operations support aspect of these hubs as their ‘infant’ initiative for a period not exceeding two years or as appropriately determined and dictated by the conditions on the ground. The Trade Hub project can be viable to attract potential sponsors and financial support from other regional trade facilitating agencies. It is therefore a viable investment for local communities and trade facilitation effort.

6.0. RECOMMENDATIONS

Further recommendations to the establishment of the trade hubs at the four border posts in Tanzania follows:- i. Trade hubs establishment and implementation should, to the extent possible, be pioneered

and operated by the trade institution support in the respective country for the initial 2 – 3 years of the pilot. This approach not only renders requisite acceptability, fairly easy entry into the border post facilities and support by the border agencies but also lays strong foundation for sustainability for trade hub growth and smooth roll-out of its operations.

ii. The feasibility of establishment of trade hubs in the short run of 6 - 12 months in Tanzania border posts will happen if both the promoter ITC and in conjunction with the TANTRADE agrees to roll out a pilot project at Mutukula border post according to the prioritization scale. Evidence on the findings has established that majority women group’s lack of resource capacity (mainly human resource expertise and start-up funding) to sustain the pilot phase let alone to establish and operate the Capacity Trade Hub.

iii. The introduction and establishment of trade hubs as modernized fully furnished/ equipped and visibly branded facilities will enable these units and the trade hub agents employed should be competent enough to cope with border agencies that are ever modernizing their systems, procedures and practices. TANTRADE in conjunction with women groups’ chairpersons should take on the responsibility of continued engagement with JBCs’ to ensure space allocation inside OSBPs is secured.


iv. To the extent possible, Capacity Trade Hubs should operate as opposite sets of establishments for each neighboring country as a shared trade facilitation facility to aid informal cross border traders’ collaboration between the neighboring countries. All border posts under the study are designed on a juxtaposed OSBP facility arrangement. Kabanga-Kobero border posts are good examples.

v. Feasibility studies for establishing trade hubs should be carried out in both border posts neighboring each other, resources notwithstanding. For instance, studies conducted on border posts selected on Tanzania side should correspondingly be done on the opposite sides the neighboring community states i.e. Rwanda, Uganda, Kenya and Burundi.

vi. Introducing and establishing trade hubs in border posts hosting OSBP facilities will require a placement of the trade hub based on two-site location; one site inside the OSBP to deal with such services as customer care, advocacy and trade information. The second site to handle external services such as capacity building and training which are most suitable to an independent location outside the OSBP. However, site location outside the OSBP should be targeted within the immediate proximity to enable close contacts with border agencies. This two-site location informed the estimates made in the matrix part iii (e).

vii. The existing MOUs should incorporate the initial joint ownership of the trade hub between ITC and TANTRADE to establish commitment, capacity to roll-out and later smooth transfer to competent associations and their leaderships.

viii. The medium-term option of securing a customs clearing license and diversifying to money changing business should be considered as means to support women groups and income streams for the future growth and sustainability of the trade hubs. These licenses could be taken under the responsibility and custody of TANTRADE or any future designated national WICBT body corporate on behalf of its member associations and individuals. A reasonable clearing and service fee could apply to hub users. This fee in turn would become additional revenue/income for supporting hub activities.

ix. Where establishing within the OSBP is still problematic, delayed or denied, piloting the trade hub could start with setting up a capacity development center within the proximity of the border post. The alternative approach would then cater and coordinate for other services such as capacity development, workshop, meeting, conference activities. Such a measure would popularize the trade hub initiative amongst WICBTs and the publics as arrangements to lobby and secure a contact desk/center inside the OSBP facility are progressively getting done or considered with the relevant authorities.

x. Trade hubs should be established with commitment done in form of letters of agreement or MOUs between national Trade Support Institution, the national association of WICBT/MSMEs; border agency joint border committee usually headed by Customs or Immigration and appointed focal persons from relevant government departments/ministry head offices.

xi. TANTRADE has successfully piloted gender programs in Tanzania (e.g. WICBTs Trade Facilitation Programmes-2012 & 2014, Regional Export Information Points, etc.) from which it can draw a wealth of experience to have a trade hubs operate. Even after the transition period, representation on the board of directors perhaps as an ex-official after the transition (2-3 years) should be explored. A capability criteria and an operational guide should be developed for the leadership and their committees to administer and regulate the trade hubs throughout the country on the selected and qualified border posts.

xii. Securing a clearing license for cross border traders. TANTRADE in conjunction with the national WCBT as an umbrella association could take the lead in applying and seeking the Customs agent’s license to clear and assist their members. In collaboration with all the border WICBT associations (affiliate members) the central executive would cede some authority to allow the local associations have levels of autonomy. An MOU arrangement could be put in place for this but also be in position to take-over if mismanagement creeps


in. The functionality of clearing services creates a realization of revenues for sustainability of the trade hub.

xiii. MTIT is further persuaded to formally incorporate the trade hub project through TANTRADE in its shared mandate at the border as Government in the short-term till it becomes mainstreamed into EAC regional border management policy and framework, especially in projects such as OSBP and Single Window. The trade hub is envisaged to grow into a regional concept and project if its implementation succeeds.

xiv. Tanzania government through MTIT agrees to take over upon development of the trade hub project to regional scope and integration. There is an on-going EAC regional policy framework direction with a unique feature of gender sensitivity incorporated to deal with informality programmes.

xv. Based on the market price indicators during the study, the operations cost of establishing a functional and fully-equipped trade hub is dependent the two-site location requirements. In site-location 1 if JBC gives a positive nod to offer occupancy space inside the OSBP, the following cost estimates will apply i.e. 1 – USD$39,100. 11 – USD$57,400. 111 – USD$58,600. In site-location 11 if JBC delays or even objects admission into OSBP, then consideration to locating outside OSBP takes center-stage and lessens the corresponding cost estimates of USD$17,600 meant to cater for inside the OSBP i.e. Options 1- USD$21,500. 11 – USD$39,800. 111 – USD$41,000 (Refer to the matrix Part iii – e).

7.0. CONCLUSIONS

Establishment of trade hubs will be feasible in Tanzania border posts if both the promoter (e.g. ITC) and in conjunction with the TSI in each country (e.g. TANTRADE) agree to consider continued technical and financial assistance at least in the first phase (2-3 years) of establishment and implementation. Throughout the transition period, Tanzania National Women Cross Border Association (TANWOBA) as a proposed umbrella platform could be strengthened with a representation governance board of directors11 that will assume the leadership responsibility for national trade hubs at the end of the transition period. Case studies by COMSEA - Trade Information Centers and ECOWAS – Business Information Centers (USAID supported BICs in 1.6 above) are related and one could borrow a leaf on both governance and funding issues. If the proposal is plausible, all parties must jointly participate and take part in the roll-out initially, on a pilot basis at Mutukula border post as recommended. The experience learnt would inform any future roll out to other qualified sites as sequenced above based on successes and lessons learnt.

11 The board of directors would be comprised of WICBT presidents amongst others representing participating Tanzania border posts in the trade hub project.


8.0. APPENDICES

Appendix 1: Key Informant (KI) Guide Questionnaire

The feasibility study for the establishment of Trade Hub for improving the WICBTs/MSMEs’ business in

Tanzania.

Preamble The International Trade Centre (ITC) and in conjunction with TANTRADE have signed a Memorandum of Understanding to implement the project to improve the business environment for WICBTs/ SMMEs in Tanzania and make them more competitive for export to neighboring countries. The main objective of this mission is to make a feasibility study of the placement and installation of a hub services including activities that develop women commercial exchanges at border, growth, emergence and the more contribution to building the economy of neighboring countries. This survey instrument is tailored to obtain WICBT/MSME, user input to the study. Each is expected to provide this input by responding and completing the questionnaire for purposes of synthesis and analysis to the consulting team on the study. This is therefore to request you truthfully respond to the question. We are grateful for your contribution and invaluable time. Part 1: Respondents Profile DATE:…………...........INTERVIEWEE............………………………………………………………………………………….BORDER POST..……………..................................................... (Tick the correct option) 1. Gender: - (a) Female (b) Male 2. Age Group:- (a) Below 18 (b) 18-30 (c) 30-40 (d) 40-50 (f) 51+ 3. Marital status:- (a) Married (b) Single (c) Widowed (d) Separated (e) Cohabiting 4. Occupation:- (a) Customs official (b) WICBT member (c) MSME member (d) Clearing Agent (e) Other 5. Education:- (a) University (b) Tertiary/College (c) Secondary/Primary (d) None Part 2: Prioritize the border post in which to establish the trade hub on the basis of: a). What are the volumes of imports that come from the neighboring country (s)? Recorded by (i). Customs, (ii). WICBT Association b). What are the volumes of exports that cross border to the neighboring country (s)? Recorded by (i). Customs, (ii). WICBT Association c). What are the volumes of trade exchanges by WICBTs (as Associations or/and Individuals on both sides) at this border crossing from the neighboring? d). How many WICBTs ’associations are present at this border or proximity? e). What key challenges do the associations face specifically? f). What services does the association provide to women ICBT? g). What level of challenges are faced by women ICBT? h). Describe the level of resistance to change of the agents of the border agencies. Part 3. Visit the border agencies to introduce the project and identify the best place to establish the trade hub: a). What opportunities can you identify for networking between hub agents and customs agents at border; b). What agreement opportunities can you identify to provide women facilities in local customs for the provision of services with support of experts / agencies Part 4. Conduct an inventory of existing infrastructures that can facilitate the establishment of the hub: a). Do you have premises available for trade hub at the border crossing? b). Is there provision of Electricity and whether it reliable and stable at the border crossing? c). Do you have Internet connection and what is the reliability and band-width at this border crossing? d). Do you have a Telephone connection or/and mobile network at the border? e). What are the estimated operating costs for the hub? f). What is the estimated time for the implementation of the hub? Part 5. A women's needs assessment in terms of expected trade hub: a). What would be the required opening hours? b). What would be the main services expected? c). What would be the main problems that women face? d). Trade hub agents have to physically accompany the exporters in their approach or only give them the information? e). What is the number and frequency of requests? f). How to establish a system or methodology to collect statistics and information about the women’s operations, problems and solutions provided by the trade hub Part 6. Identify women's associations who can provide the human resources needed to operate the hub: a). What are the existing women's associations in your border post or/and proximity? b). What is the existing expertise on each side of the border? c). What are your specific training needs to have your services developed for women? d). Among these association (s) indicate how many potential candidates for trade hub you may have;


e). What training needs in export management would you wish to have?

Appendix 11: Attendance List for WICBT Focal Group Discussion at four Border Posts in Tanzania

RUSUMO BORDER POST – Situated in Ngara District in Kagera Region Date: 25 – 26/08/2014

No Interviewee/FGD Border Post Business Category Organization/ Association

Contacts- Telephone

1 Verena Leodigardi Rusumo Trader/WICBT RUWOTA 0759799026

2 Pendo Bolingo Rusumo Trader/C-Person RUWOTA 0782765952

3 Clementina Paschal Rusumo Market vendor/MSME RUWOTA 0784559065

4 Paschazia Kenethi Rusumo Trader/WICBT RUWOTA -

5 Grace Edisoni Rusumo Trader/WICBT RUWOTA 0759722766

6 Hellen Mkongwa Rusumo Community Officer Ngara District 0752046576

7 Beatrice Vera Rusumo Trader/WICBT RUWOTA -

KABANGA BORDER POST – Situated in Ngara District in Kagera Region Date: 27-28/08/2014

1 Adelaida Majanja Kabanga Trader/WICBT KWG 0784203177

2 Petronia Gabriel Kabanga Trader/WICBT KWG 0756496315

3 Berta James Kabanga Trader/WICBT KWG 0787508430

4 Doth Mshaija Kabanga Trader/ WICBT KWG 0689015372

5 Josephine Gabriel Njimba Kabanga Trader/WICBT KWG 0683191476

6 Ephrazia Thadeo Kabanga Trader/WICBT KWG -

MUTUKULA BORDER POST – Situated in Missenyi District in Kagera Region. Date: 15-16/09/2014

1 Benuza Jane Charles Mutukula Chairperson/Crafts/Produce - MSME

MUWOTA 0757597520; [email protected]

2 Sheikh Hamidu Isa Bamarwa Mutukula Vice Chair MCOC - MSME

MUWOTA 0784553909

3 Sijida Shahidri Msafiri Mutukula Teacher/Trader MUWOTA 0766472643

4 Maida Said Mutukula Trader/MSME MUWOTA 0763299812

5 Janati Saidi Mutukula Guest House/WICBT MUWOTA 0789988392

6 Amina Jacob Shembiru Mutukula WICBT MUWOTA 0758899897

7 Firdaus Aziz Mutukula WICBT MUWAOTA 0766195130

8 Wittness Benedicto Mutukula WICBT- Shop MUWOTA 0786643057

9 Mjumbe Mires Charles Mutukula Bar Owner MUWOTA 0786672111

10 Maria Goretti Mulindwa Mutukula WICBT MUWOTA 0785908228

11 Noel Mungure Missenyi Trade Devt Officer Missenyi District 0755487724

9 Anna Ndile Mutukula Community Officer Missenyi District 0765697202

10 Ibrahim Mutungi Mutukula In-Charge/Chairperson JBC

TRA - Customs

11 Musoni Goffrey Mutukula In-Charge Immigration Dept

13 Nurdin Ahamada Bakuza Mutukula Chairperson MCOC Mutukula COC 0758077977

NAMANGA BORDER POST –Situated in Longido District in Arusha Region Date: 17-18/09/2014

1 Paul Namanga Officer In-charge Immigration -

2 Peter Namanga Officer -

3 Karangwa Charles Namanga Officer In-charge/Chairperson JBC

TRA - Customs -

4 Sara Keiya Namanga Chairperson NWICBT/Trader - Milk

NWICBT 0768653991

5 Mary Barak Namanga Market vendor- Shop NWICBT 0752883716

6 Nokishubi Oletati Namanga Market vendor - Shop NWICBT 0754597670

7 Mary Miliya Namanga Market vendor- Soap/Milk

NWICBT 0758273720

8 Salome Paulo Namanga Market vendor NWICBT O754971255

9 Florence Kaaya Namanga Shop Owner NWICBT 0755897860

Ta

final report itc-tanzania fs - field findings 11-2014

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