NON-TARIFF BARRIERS TO TRADE IN EAST AFRICA

COMMUNITY: A CASE OF EXPORTERS IN KENYA

BY

ANYAL MICHAEL OKUTE

UNITED STATES INTERNATIONAL UNIVERSITY - AFRICA

SPRING 2017

i

NON-TARIFF BARRIERS TO TRADE IN EAST AFRICA

COMMUNITY: A CASE OF EXPORTERS IN KENYA

BY

ANYAL MICHAEL OKUTE

A Project Report Submitted to the Chandaria School of Business in Partial

Fulfillment of the Requirement for the Degree of Masters in Business

Administration (MBA)

UNITED STATES INTERNATIONAL UNIVERSITY - AFRICA

SPRING 2017

ii

STUDENT’S DECLARATION

I, the undersigned, declare that this is my original work and has not been submitted to any

other college, institution, or university other than the United States International

University-Africa in Nairobi for academic credit.

Signed: Date:

Anyal Michael Okute ID No: 617447

This research report has been presented for examination with my approval as the

appointed supervisor.

Signed: Date:

Prof. Timothy Okech

Signed: Data:

Dean, Chandaria School of Business

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ABSTRACT

The purpose of the study was to investigate the effects of non-tariff and technical barriers

to trade on the Kenyan exporters within the East African Community. The study was

guided by the following research questions: What are the non-tariff barriers faced by

Kenyan exporters within the East African Community? What are the technical barriers to

trade affecting the Kenyan exporters within East African Community? What are the

mitigating factors on non-tariff barriers and technical barriers to trade?

The study adopted an explanatory research design to explain the various technical and

non-tariff trade barriers that hinder trade within EAC within particular emphasis on

barriers that hindered Kenyan exporters in EAC. The population of the study included all

exporters in Kenya who were 9,585. The Yamane‘s formula was used to determine the

sample size from population within each stratum and this brought the sample size to 121

respondents. Questionnaires were the main data collection instrument that were used by

the researcher. Descriptive analysis was used in the data analysis and reporting of results.

Measures of central tendencies, such as means, standard deviation, and percentages were

used. Correlation analysis was used to describe the degree of relationship between the

study variables.

The study showed that documentation and procedures, too many agencies involved in

overall export inspection and certification in the region, escort of all sensitive and

hazardous products through the territory of each East Africa Community (EAC) transit

country, and verification of transit cargo were a challenge. It also showed that lack of

harmonization in working hours at the border posts, delays at weighbridges, multiple

police road blocks and mobile control, prohibition on transportation of locally produced

goods, and EAC transit licenses for goods were a challenge for exporters. The study

showed that truck entrance fees and grace period, business registration, use of

immigration and visa procedures, poor information dissemination across the East Africa

community, language barrier, and insecurity/ highway crimes/loss of goods at the

container freight stations were all non-tariff barriers to trade in EAC.

The study showed that technical Barriers to Trade in terms of technical requirements,

voluntary standards and conformity assessment procedures affect trade. The study

showed that exporters in Kenya faced institutional barriers to Kenya’s trade in the EAC.

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The study showed that various Kenyan ministries, departments and parastatals were the

institutional barriers to trade, and that KRA was responsible for the enforcement and

management of the customs laws and the administration of common external tariffs hence

causing TBT. The study showed that application of numerous certification and

conformity assessments, and the procedure for obtaining the certificate of origin being

cumbersome and lengthy were a barrier to trade.

The study showed that some mitigation procedures for minimizing the impact of trade

barriers would include: harmonizing product standards and developing mutual

recognition of standards across member countries, carrying out verification of

information on NTBs, prioritizing products, developing specific work programs, and

carrying out a sector-based approach strategy that deals with issues in specific economic

and politic sectors. Other mitigation strategies would include: enhancing exchange of

information and views on a range of active NTB elimination programs/projects,

establishing a communication network between NTB focal points, and establishing

appropriate procedures for identifying and eliminating NTBs.

The study concludes that documentation and procedures, too many agencies involved in

overall export inspection and certification in the region, escort of all sensitive and

hazardous products through the territory of each EAC transit country, verification of

transit cargo, and lack of harmonization in working hours at the border posts. The study

concludes that some mitigation procedures for minimizing the impact of trade barriers

would include: harmonizing product standards and developing mutual recognition of

standards across member countries, carrying out verification of information on NTBs,

prioritizing products, developing specific work programs, and carrying out a sector-based

approach strategy that deals with issues in specific economic and politic sectors.

The study recommends that existing advance ruling mechanisms in various boarders and

countries be classified according to the national customs tariff and verification of the

origin of goods declared for preferential treatment. All parties could also introduce an

advance ruling mechanism to provide information on the method that will be applied for

customs valuation.

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ACKNOWLEDGEMENT

This has been a learning process which I could not have achieved on my own.

I would also like to thank the administration of the United States International University

(USIU) for providing me with a good environment and facilities to complete this project

and to the faculty members of the Chandaria School of Business who provided me with

invaluable knowledge throughout my studies and made this success possible.

Finally, I wish to express my love and gratitude to my family for their support in terms of

resources, encouragement and love through the duration of my studies

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DEDICATION

This work is dedicated to my late grandfather Daudi Anyal Musa, to my Aunt Evelyn

Anyal, my family, and to my wife Hiromi Okute, without their caring support at one point

or the other in my life, it would not have been possible. Thank you all for your support,

love and encouragement during the time I have been pursuing my Master’s Degree

Programme. Grandfather, it would have been nice to share with you this special

achievement.

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TABLE OF CONTENTS

STUDENT’S DECLARATION ......................................................................................... ii

ABSTRACT ........................................................................................................................ iii

ACKNOWLEDGEMENT .................................................................................................. v

DEDICATION.................................................................................................................... vi

TABLE OF CONTENTS ................................................................................................. vii

LIST OF TABLES ............................................................................................................. ix

LIST OF FIGURES ............................................................................................................ x

CHAPTER ONE ................................................................................................................. 1

1.0 INTRODUCTION......................................................................................................... 1

1.1 Background of the Study ................................................................................................ 1

1.2 Problem Statement .......................................................................................................... 5

1.3 Purpose of Study ............................................................................................................. 6

1.4 Research Questions ......................................................................................................... 6

1.5 Significance of the Study ................................................................................................ 6

1.6 Scope of the Study .......................................................................................................... 7

1.7 Definition of Terms......................................................................................................... 7

1.8 Chapter Summary ........................................................................................................... 8

CHAPTER TWO ................................................................................................................ 9

2.0 LITERATURE REVIEW ............................................................................................ 9

2.1 Introduction ..................................................................................................................... 9

2.2 Non-Tariff Barriers Facing Kenyan Exporters in the EAC ............................................ 9

2.3 Technical Barriers to Trade .......................................................................................... 16

2.4 Mitigating Factors on Non-Tariffs and Technical Barriers to Trade within EAC ........ 20

2.5 Chapter Summary ......................................................................................................... 26

CHAPTER THREE .......................................................................................................... 27

3.0 RESEARCH DESIGN AND METHODOLOGY .................................................... 27

3.1 Introduction ................................................................................................................... 27

3.2 Research Design............................................................................................................ 27

3.3 Population and Sampling Design .................................................................................. 28

3.4 Data Collection Methods .............................................................................................. 30

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3.5 Research Procedures ..................................................................................................... 30

3.6 Data Analysis Methods ................................................................................................. 30

3.7 Chapter Summary ......................................................................................................... 31

CHAPTER FOUR ............................................................................................................. 32

4.0 RESULTS AND FINDINGS ...................................................................................... 32

4.1 Introduction ................................................................................................................... 32

4.2 Response Rate and General Information ...................................................................... 32

4.3 Non-Tariff Barriers on Trade (NTBs)........................................................................... 34

4.4 Technical Barriers to Trade (TBT) ............................................................................... 39

4.5 Mitigating Factors for the Trade Barriers ..................................................................... 44

4.6 Chapter Summary ......................................................................................................... 51

CHAPTER FIVE .............................................................................................................. 52

5.0 DISCUSSIONS, CONCLUSIONS, AND RECOMMENDATIONS ...................... 52

5.1 Introduction ................................................................................................................... 52

5.2 Summary of Findings .................................................................................................... 52

5.3 Discussions ................................................................................................................... 53

5.4 Conclusions ................................................................................................................... 61

5.5 Recommendations ......................................................................................................... 62

REFERENCES .................................................................................................................. 63

APPENDICES ................................................................................................................... 69

APPENDIX A: TIME SCHEDULE ................................................................................ 69

APPENDIX B: BUDGET ................................................................................................. 70

APPENDIX C: COVER LETTER .................................................................................. 71

APPENDIX D: SAMPLE QUESTIONNAIRE .............................................................. 72

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LIST OF TABLES

Table 3.1: Population Distribution ...................................................................................... 28

Table 3.2 Sample Size......................................................................................................... 30

Table 4.1 Rating of Non-Tariff Barriers in Trade ............................................................... 34

Table 4.2 Correlations of Non-Tariff Barriers in Trade ..................................................... 36

Table 4.3 Regression Model Summary for NTB Barriers to Trade .................................... 38

Table 4.4 Regression Coefficients for NTB Barriers to Trade Factors .............................. 38

Table 4.5 Rating of Technical Barriers to Trade ................................................................ 39

Table 4.6 Correlations of Technical Barriers to Trade ....................................................... 41

Table 4.7 Regression Model Summary for TBT Barriers to Trade .................................... 43

Table 4.8 Regression Coefficients for TBT Barriers to Trade Factors ............................... 43

Table 4.9 Rating for Mitigating Factors on Trade Barriers ................................................ 44

Table 4.10 Correlations of Mitigating Factors for Trade Barriers ...................................... 48

Table 4.11 Regression Model Summary for Mitigating Factors for Trade Barriers .......... 50

Table 4.12 Regression Coefficients for Mitigating Factors for Trade Barriers .................. 50

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LIST OF FIGURES

Figure 4.1 Nature of Business ............................................................................................. 32

Figure 4.2 Length in EAC Export ....................................................................................... 33

Figure 4.3 Trade Barriers Encounter .................................................................................. 33

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CHAPTER ONE

1.0 INTRODUCTION

1.1 Background of the Study

Many world economies have been embracing regional integration as strategy towards

achieving an accelerated economic development, which is a key agenda for many states

and promise given to electorates every time they elect the leaders. In East Africa,

economic integration involving Uganda, Kenya and Tanzania was established in 1967,

but collapsed in 1977 (Reith & Boltz, 2011). In 1993, the initiative was revived with the

signing of a Declaration on Closer East African Cooperation. The treaty for the

establishment of the East African Community (EAC) of 1999 set out a vision for the

eventual unification of Kenya, Tanzania, and Uganda. The sequence of events laid out

comprised the establishment of a customs union, followed by a common market, a

monetary union, and eventually a political federation (Reith & Boltz, 2011).

The overall objective of EAC was to develop policies and programs aimed at widening

and deepening cooperation among the partner states in political, economic, social and

cultural fields, research and technology, defense, security, and legal and judicial affairs

for their benefits. Currently membership to EAC includes Uganda, Kenya, Tanzania,

Burundi and Rwanda (Okumu & Nyankori, 2010). As part of the process of realizing full

benefits of economic integration, the regional block further agreed to establish a customs

union, common market, monetary union and finally a political federation. In March 2004,

the EAC heads of states signed a protocol on establishment of the East African

Community Customs Union (EACCU). The protocol came into effect on January 2005.

Article 3 of the protocol of (Community, 2004) outlines four key objectives of the

customs union as: to liberalize trade within the customs area for the benefit of all member

states, promote production efficiency within the customs union, attract investments into

customs union area, and stir up economic development and industrialization in various

sectors.

The main instrument for trade liberalization provided under the customs union was the

elimination of tariffs and non-tariff barriers (NTB), within the partner states in order to

increase economic efficiency and create political and cultural relationships among the

partner states (Nzuma, 2007). NTBs refer to the wide and heterogeneous range of policy

interventions other than border tariffs that affect and distort trade of goods, services, and

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factors of production. Common taxonomies of NTBs include market-specific trade and

domestic policies such as import quotas, voluntary export restraints, restrictive state-

trading interventions, export subsidies, countervailing duties, technical barriers to trade,

sanitary and Phystosanitary (SPS) policies, rules of origin, and domestic content

requirement schemes. Extended taxonomies also include macro-policies affecting trade

(Beghin, 2006).

Globally, tariffs have been declining as a result of multilateral, regional and bilateral trade

liberalization. At the same time though, many countries have instituted alternative

protectionist mechanisms, NTBs, which are ever changing and are threatening

international free flow of goods and services (Beghin, 2006).

As tariff barriers continue to reduce for instance at the multilateral level through various

rounds of trade negotiations; and at the regional and bi-lateral levels through various trade

arrangements, the issue of non-tariff measures becomes more important in accessing

markets (Reith & Boltz, 2011). The World Trade Organization (WTO) General

Agreement on Trade and Tariffs under Article 20, allows members to implement

measures to protect human, animal or plant life or health, provided no discrimination or

disguised protectionism arises (Beghin, 2006). In addition, WTO agreements of Sanitary

and Phytosanitary measures (SPS) and Technical Barriers to Trade (TBT) deal with food

safety and animal and plant health and safety, as well as product standards in general. The

importance of these measures cannot be underscored, since they are necessary for inter

alia environmental protection, health safety, and national security to consumers (Reith &

Boltz, 2011). However with a multiplicity of such measures imposed by countries,

accessing markets of interest has become challenging and costly for producers and

exporters. In many instances the measures are difficult to track and conform to given their

diversity, hence the need to analyze these issues and map out possible solutions to

overcome the challenges they present in accessing markets of interest (Nzuma, 2007).

The creation of the EAC Customs Union is expected to increase trade and investment

flows between member states and at the same time create a large market for the East

African people (Reith & Boltz, 2011). The expanded trade and cooperation of the partner

states offers the prospect of economic growth and prosperity for East Africans. However,

for these outcomes to be realized the Customs Union must urgently eliminate all obstacles

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that act as impediments to the realization of smooth trade and investment flows in the

region (Mmasi and Ihiga, 2007).

These obstacles include both tariff and non-tariff barriers (NTBs) to trade, whose removal

reduces the cost of doing business and ultimately improves welfare. Within Eastern and

Southern Africa, tariffs play a much less important role as a barrier to cross border trade

than NTBs do (EABC 2005). Under the EAC Customs’ Union Protocol, partner states

have committed themselves to eliminate, with immediate effect, all existing NTBs on

intra-EAC trade and to refrain from introducing new ones. However, trade between the

EAC countries is still being hampered by the existence of NTBs that are variously applied

by the member states (EABC 2005). Within the community, the main types of NTBs

include customs documentation and administrative procedures, immigration procedures,

quality inspection procedures and transiting procedures that are cumbersome, un-

standardized, and costly (EABC 2005). Thus, EAC trade liberalization and associated

welfare gains would depend primarily on the elimination of policies and procedures

linked to structural NTBs.

Economists generally agree that NTBs are detrimental to regional trade. These barriers

diminish the potential benefits of trade preferences such as regional trading arrangements.

Moreover, NTBs are a serious impediment to the growth of intraregional trade and their

associated benefits. The existence of NTBs increases the cost of doing business, which

ultimately leads to huge welfare losses (EABC 2005). However, the cost of these NTBs

and their trade and welfare implications within the EAC are not well understood.

The EAC region has increasingly become the major market for Kenya’s exports, whose

value grew from USD 1.54 Billion in 2001, to USD 1.7 Billion in 2002, 1.8 Billion in

2003, 2.06 Billion in 2004 and to 2.68 Billion in 2005. The region therefore took the

lion’s share of Kenya’s exports during the period, representing 56% between 2001 and

2003, growing to 58% in 2004, and dropping slightly again to 56% in 2005. This was an

average of 57% market share over the period 2001 to 2005. The country’s sister partners

within the EAC region took the bulk of exports to COMESA, with Uganda taking an

average of 41% over the period 2001-05 and Tanzania taking an average 19% of the

market share (Ihiga, 2007).

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Statistics from the East African Business Council show that Kenya’s ten leading exports

to the EAC during the period 2006-2011 were Tea which took 17%; Articles of iron and

steel which took 6.5%; and Essential oils, perfumery, soap and polishing preparations

which took 6% of Kenya’s exports to EAC/COMESA. Other products in the category of

ten major exports were Petroleum products, Paper and paperboard, Salt and Cement;

Textile yarn, fabrics and garments; Cigarettes; Glass and glassware; and un-milled maize

(Ihiga, 2007).

In general, Non-tariff barriers such as SPS and TBTs have affected Kenya’s access to

markets for commodities such as fish and horticulture. The Uruguay Round of

Negotiations contains three important elements of which SPS is a major one. These

mandate that SPS be applied only to the extent necessary to protect food safety and

animal and plant health. This however can constitute unfair technical barriers to trade

when used indiscriminately. Provision is also made for possible technical assistance for

developing countries to comply with SPS standards of importing countries (Mmasi &

Ihiga, 2007).

Apart from tariff barriers, Kenya’s exports to developed countries markets have been

barred by instances of arbitrary imposition of sanitary and phytosanitary (SPS) measures

and the most affected sub-sectors include horticulture and fisheries. Besides, there have

been cases where sub-standard commodities that do not meet SPS standards have been

dumped in the country. Kenya’s positions on SPS is for transparency in implementation

by developed countries and for provision of technical support to enable the country

undertake risk analysis and participate in international meetings for setting standards

(Nogueira, 2008).

In Kenya, market access has also been affected by SPS, where fish exports to the

European Union faced a ban in 1999 to 2000. This was because Kenya and other East

African Countries were unable to meet the EU’s hazard analysis critical control points

(HACCP) requirement. Although the ban was later lifted, the SPS creates barriers to

agricultural trade. The minimum residual pesticide requirement by the EU countries on

horticulture produce also poses barriers to trade for Kenyan exports. In general, food

standards are used extensively by developed countries to block entry into their markets of

agricultural products from developing countries. Unfortunately, developing countries

5

consider the standards set by developed countries not to be transparent. Furthermore, fair

implementation of SPS agreement requires both financial and technical resources which

Kenya lacks (EAC, 2009).

An acute problem is the lack of appropriate scientific and technical expertise with little

technical assistance being given to developing countries. The challenge facing both

developed and developing countries is for collaboration of one with the other to reach

accommodation and reconcile the disparate preoccupations relating trade and those

relating to the protection of human, animal and plant health and the environment (Nzuma,

2007).

1.2 Problem Statement

Trade barriers have become an important trade policy issue among the member states of

the East African Community. Trade barriers both Non-Tariff and Technical Barriers have

an effect of reducing the gains from trade liberalization arising from the reduction of

tariffs. Due to their unpredictability and persistence, they continue to influence trade

patterns and restricting market access to regional exporters thus denying consumers’

welfare enhancing opportunities, which arise from access to, reasonably priced regional

imports (COMESA, 2009).

NTBs refer to the wide and heterogeneous range of policy interventions other than border

tariffs that affect and distort trade of goods, services, and factors of production. Common

taxonomies of NTBs include market-specific trade and domestic policies such as import

quotas, voluntary export restraints, restrictive state-trading interventions, export subsidies,

countervailing duties, technical barriers to trade, sanitary and Phystosanitary (SPS)

policies, rules of origin, and domestic content requirement schemes. Extended

taxonomies also include macro-policies affecting trade (Beghin, 2006).

The problem thus lays in how to identify these barriers and to what extend do they inhibit

Kenya from fully exploiting the opportunities that exist within the East Africa Market.

The ways which the country can explore to improve on its ability to overcome the barriers

have been understudied and a problem this study sought to address.

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1.3 Purpose of Study

The purpose of the study was to investigate the effects of non-tariff and technical barriers

to trade on the Kenyan exporters within East African Community.

1.4 Research Questions

1.4.1 What are the non-tariff barriers faced by Kenyan eporters within the East

African Community?

1.4.2 What are the technical barriers to trade affecting the Kenyan exporters within

East African Community?

1.4.3 What are the mitigating factors on NTBs and TBTs?

1.5 Significance of the Study

The study may be of benefit to a number of stakeholders. These include:

1.5.1 Policy Makers

Policy makers will be enlightened on the trade barriers existing within the East African

Community and are in a position to get solutions to the issues raised. They will also be

able to understand and employ the measures suggested to facilitate exportation within the

East African Community.

1.5.2 Kenyan Exporters

Kenyan exporters will be in a position to understand the trade barriers affecting their trade

and are in a position to devise ways to counter the issues affecting their business. They

will also be able to understand what measures they can undertake to help the situation.

1.5.3 Upcoming Kenyan Exporters

Upcoming Kenyan exporters will be able to understand the export business within the

East African Community and know what to expect even before they indulge in the same.

They will be enlightened on the trade barriers they should expect as they embark on

exportation within the East African Community.

1.5.4 Researchers

The future researchers will be able to assess how the past research would have dealt with

the problem and be able to come up with new dimensions that they can research on.

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1.6 Scope of the Study

This study was limited to the Kenyan exporters within the East African Community. Data

was collected from exporters within Nairobi region using questionnaires. The study

targets a population of 9,585 exporters from which a suitable sample size was drawn. The

research covered the period between the years 2013 to 2014.

The limitations of the study included difficulty in tracing the exporters, lack of openness

by employees and management as they may not want to fully disclose the details of their

companies, and poor response rate. To overcome these limitations, the study ensured that

the correct and reliable sample frame was used to be able to target the right and traceable

organizations and not ghost ones. The study also assured anonymity and confidentiality to

improve on openness and response rate.

1.7 Definition of Terms

1.7.1 Non-Tariff barriers

Any measure other than a tariff that causes a trade distortion (Kimenyi, 2008).

1.7.2 Non-Trade Barrier

These are measures, other than tariffs, that are tightly connected with state

(administrative) activity and influence prices, quantity, structure and/or direction of

international flows of goods and services, as well as resources used to produce these

goods and services. They are import-targeted public policy interventions intended to

protect domestic industries, national health, safety and security, as well as revenue

sources (Okumu and Nyankori, 2010).

1.7.3 Trade Distortion

Exists when the price at the border diverges from the domestic price and can result from

regulations or administrative procedures which are imposed to serve a specific objective

(Hangi, 2010).

1.7.4 Protectionist

Protectionist is the system of imposing duties on imports into a country in order to protect

domestic industries (Okumu and Nyankori, 2010).

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1.7.5 Monopoly

This is a situation in which one company controls an industry or is the only provider of a

product or service (Fliess and Lejarraga, 2005).

1.8 Chapter Summary

This chapter has covered the introduction of the research problem by exploring the

various definitions of trade barriers. It has explored the global meaning and also the EAC

meaning of trade barriers. It has looked at the diverse taxonomies of trade barriers and

tried to give a brief explanation of the same and has also covered the history of EAC and

its position on trade barriers. It has outlined the problem statement that described the need

for this particular study. The chapter also exposed the general objectives of the research

study. Finally, the chapter explained the rationale of the study, scope in which the

research will take place, and defined terminologies used.

Chapter two presents the literature review related to problem under study, which

evaluates recent research studies that have been undertaken, while chapter three presents

research methodology that was employed in carrying out the study. Chapter four presents

the results and findings of the study, chapter five offers the study discussions, conclusions

and recommendations.

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CHAPTER TWO

2.0 LITERATURE REVIEW

2.1 Introduction

This chapter presents literature that relates to the study to be carried out. The chapter has

been divided into four sections. In the first section, an introduction of the chapter is

provided, the next section highlights views presented in past studies about looks at

literature related to the Non-Tariff Barriers affecting trade in East Africa Community,

section 2.3 looks at literature related to the Technical Barriers to Trade that Kenya faces

in EAC region, while section 2.4 deals with literature related to the mitigating factors for

Non-Tariff Barriers and Technical Barriers to Trade. The chapter closes with a brief

summary of the issues discussed therein.

2.2 Non-Tariff Barriers Facing Kenyan Exporters in the EAC

A research by World Bank, (2008) presented a synthesised report on the non tariff

barriers that affect traders in the East African Community. These findings are based on

the broad categories organized by the World Trade Organization. Nontariff barriers

(NTBs) refer to the wide range of policy interventions other than border tariffs that affect

trade of goods, services, and factors of production. Most taxonomy of NTBs includes

market-specific trade and domestic policies affecting trade in that market. Extended

taxonomies include macro-economic policies affecting trade. NTBs have gained

importance as tariff levels have been reduced worldwide. Common measures of NTBs

include tariff-equivalents of the NTB policy or policies and count and frequency

measures of NTBs. These NTB measures are subsequently used in various trade models,

including gravity equations, to assess trade and/or welfare effects of the measured NTBs

(Beghin, 2006).

2.2.1 Customs and Administrative Entry and Passage Procedures

Several sessions, forums and meetings have been undertaken by the EAC Council of

Ministers with the aim of simplifying and synchronizing customs documentation,

formalities and procedures at the border posts. Little of this has been translated into

action. Many member states are undertaking donor-funded customs modernization

programs, but the focus and content of such national efforts remain largely uncoordinated

across the EAC. Planned improvements in administering border posts have been slow,

mostly bilateral, and with somewhat varying results to date. Duplication of processes

10

continues to add to monetary costs and loss of time. Unequal treatment according to the

country of origin of the goods and/or truck and opportunities for fraudulent behavior is

frequent, as are the allegations of such “unfair” treatment and corruption (World Bank,

2008).

2.2.2 Documentation and Procedures

A task commissioned by the countries to check on the factors that hinder trade within the

EAC found out there were varying systems of import declaration, payment of applicable

duty rates, and standards applied, as well as limited/varying working hours at the

customs posts. Lengthy procedures and inadequate information to enable customs

officials make pertinent decisions at the border posts seem to plague the EAC-wide

system. To implement customs procedures for entry processing, cargo control, transit,

warehouse control, and accounting, four member countries have opted to use various

versions i.e. Automated Systems for Customs Data (ASYCUDA - is a computerized

customs management system developed by UNCTAD to help reform the customs

clearance process), while Kenya has chosen to use Similarity Based Complex Analysis

System (SIMBA) an electronic real time trading system for international markets. To

date, the linkage between these two systems has not been smooth. Delays in processing

export papers are widespread. Before transporters leave their departure point, they must

file export papers with the revenue authority (at the capital) to be sent to the border post.

Kenya and Uganda have a bilateral legal framework for joint control at their common

border posts, creating a one-stop post at each border crossing, starting with Malaba. They

also have an agreement to introduce 24-hour services at their common border posts. It

takes about one week for process at Kenya Revenue Authority to be completed which too

many exporters is perceived to be a long and strenuous exercise. It gets worse, when

goods move to other countries, which as documented in the report by World Bank (2008)

different procedural arrangements on these borders slow down business.

2.2.3 Institutions Exercising Administrative and Customs Controls

A point agreed by most of the EAC member governments is that there are too many

agencies involved in overall export inspection and certification in the region, stretching

the administrative capacity and resource needs (Beghin, 2006). The process is no different

for goods traded intra-EAC. For example, numerous agencies participate in the clearance

process in Burundi, even though the Customs Service is the primary public agency

11

responsible for administration, control, and collection of taxes on imported and exported

goods. It is also the only country in the EAC that does not have a full-fledged revenue

authority in place. Even in member countries with a fully functional revenue authority,

with its own customs department, and a developed bureau of standards, the inspection and

verification is the responsibility of multiple agencies. Case in point is the public agencies

in Uganda that manage food safety and quality standards. In the end, the multiple

agencies result in customs processing taking up to one week on average in Uganda, with

“simplified procedures” for single item cargo taking one day, and multiple item cargo

taking three days.

In addition, the effectiveness of some agencies such as to which a member government

may have delegated monopoly power in certain functions are being called to question

widely by private sector firms. An example is the Société Générale de Surveillance in

Burundi, which receives cargo under the Import Verification Program. Pre-shipment

inspection is usually designed to improve customs valuations by combating overcharging

of imports and undercharging of exports, but this may become another barrier in the

member nation (SADC, 2006).

2.2.4 Escorts of Goods in Transit

All sensitive and hazardous products are escorted through the territory of each EAC

transit country. In addition, to ensure that transit goods actually cross the borders of a

member country and are not smuggled for sale within, all products in transit are escorted

in convoys especially for a country like Burundi. In all other EAC members the exporter

of the good is issued a transit bond by a clearing agent who monitors that the goods reach

the designated point of exit, where the bond is cancelled. In most countries more than the

required transit days are authorized in the bond, e.g. 3 days in Rwanda compared to the

needed one day. In Burundi, the traders and transporters are concerned about the

nontransparent escort fees. In general, the transporters are concerned about the time lost

in the assembly of convoys by police escorts, which may not be daily and can range

between two and three hours at each stop. Truckers report the journey “taking two days

from Mombasa to Malaba” (a distance of 950 km) due to such convoys (Low, Mchumo,

and Muyambo, 2009).

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2.2.5 Verification of Transit Cargo

A lot of transit cargo is scanned and verified by the revenues authorities, like the Kenya

Revenue Authority and the Rwanda Revenue Authority, though it is not for use in the

member country concerned. The goods destined for the member country in many cases

are subject to 100 percent physical inspection, particularly where they involve refund or

drawback claims, regardless of the compliance record of the exporter (Ihiga, 2007).

2.2.6 Working Hours at the Border Posts

There is lack of harmonization in terms of the agreed working hours at the intra-EAC

borders (Ihiga, 2007). At present, no border post in EAC is open for 24 hours a day-7

days a week. In addition, Burundi continues to maintain a ban on vehicular traffic on its

roads during the 6:00 PM to 6:00 AM period for safety reasons. Gates are opened or/and

closed at different times on each side of the border, causing unnecessary queues and

commotion. For example, by late 2011, Malaba gates at the Ugandan border post used to

open as from 8:00 AM to 10:00 PM, while gates at the Kenyan border post used to open

8:00 AM to 6:00 PM. For Rwanda, the Rwanda Revenue Authority started 24-hour

operations as from September 1, 2008 to ease the flow of goods and services in the EAC

and neighboring Democratic Republic of Congo. On the contrary, Uganda, a crucial

partner in the 24-hour operation, has not yet been ready to follow suit due to work force

and budget constraints (World Bank 2008).

2.2.7 Delays at Weighbridges

The mandatory weighbridges for goods all along the transit route, and not only at the

border, impede trade through addition to transit time and cost of transporter upkeep.

These are particularly significant on the Kenyan and Tanzanian sides of the transport

corridors. Tanzania requires every vehicle carrying goods, small or large, to be weighed,

including passenger buses. Along the Central Corridor, between Rusumo and Dar es

Salam, there are five compulsory weighbridges: at Nyahahura, Mwenda Kulima, Mkundi,

Mikese, and Kibaha. Along the Northern corridor, there are 7 weighbridges on the

Kenyan route at Mombasa, Malaba, Kilindini, Maliyakani, Athi River, Webuye and

Amagoro. Trucks heading to Kigali have to be weighed another four times in Uganda, at

Busitema, Masaka, Mbarara, and Ntungamo. Neither the acceptable weights per axle nor

the number of axels are not yet harmonized in the region, causing further conflicts (more

on this later). Kenya in 2008 proposed a system that it intended to move towards, is that

13

transit trucks were to be weighed only once and needed to carry the issued certificate, as

preferred by transporters. This was a directive which has not yet been fully achieved due

to delays in the Ministry of Roads and Public Works (Ihiga, 2007).

2.2.8 Multiple Police Road Blocks and Mobile Control

Unrelated with weighing or clearing the cargo, police roadblocks are constantly cited by

traders and transporters as location for rent seeking and transit delays (EABC 2004). The

roadway along the Northern Corridor is particularly noted for such practices, especially

on the Kenyan part. “Police check points have become ‘police cash-points’ as they no

longer serve their intended purpose of security but are being used as medium of soliciting

money from transit trailer trucks, especially those with foreign registration numbers,” said

one irritated transporter. For example, there are about 10 police/local government

roadblocks from Mombasa to the Uganda border (down from about 27 about four to ten

years ago). In addition, there are mobile checkpoints, more frequent in Kenya, run by the

revenue authorities of the respective countries, such as the Revenue Protection

Department in Rwanda. It is estimated that 12 percent of checks of commercial vehicles

take one to two hours. In some cases, these roadblocks cause delays even for returning

vehicles not carrying any goods. Along the Central Corridor, 26 checkpoints were

reported between Rusumo and Dar es Salam (distance 1,480kms), and 5 in Rwanda

between Rusumo and Kigali (168 kms distance). What bothers transporters is that there is

a general lack of coordination among the police in carrying out their duties, such that a

truck is subject to similar checks at all traffic stops. This creates room for the police to

openly press for petty bribes—for example, in Tanzania, commonly referred to as

“kahawa,” meaning a cup of coffee (World Bank 2008).

2.2.9 Prohibition on Transportation of Locally Produced Goods

This is applied in most countries. For example, transit goods license issued for a truck by

the KRA/RRA allows the truck only to route goods through Kenya/Rwanda, but not to

undertake any local goods transportation within the country. It prohibits transportation of

locally produced goods from Kenya/Rwanda as exports and transportation of goods from

another EAC member into Kenya/Rwanda as imports. Such restrictions, on what could be

normal occurrence for returning trucks, escalate transport costs, as empty trucks have to

be sent back (EABC 2009).

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2.2.10 EAC Transit Licenses for Goods

These are being issued as part of the new EAC transit regulations, with multiple fees:

USD 1,500 for a company transit license; USD600 for a transit goods license, and KSh 10

million for a security bond on goods transited across Kenya. Information shared with

transporters is limited. Moreover, different countries seem to continue to charge their own

rates at present. For example, it costs USh 500,000 (approx. KSh 20,000) for a transit

license in Uganda and KSh 42,000 for one in Kenya (EABC 2009).

2.2.11 Truck Entrance Fees and Grace Period

Contrary to the EAC Protocol, Kenya, Tanzania, and Rwanda charge fees on each truck

entering their territory (often referred to as “road toll”). Kenya charges USD60 for a truck

going up to Nairobi from Mombasa and USD90 beyond Nairobi; Rwanda charges USD76

per truck; while Tanzania charges USD50 per truck per week. In addition, local levies

may apply. For example, the municipality of Mombasa has introduced a new levy on

Uganda-bound trucks. The EAC transit regulations allow a grace period of seven days

without payment of fees for vehicles entering the territory of a member state, but

compliance varies across member states and across time periods.

2.2.12 Business Registration

Treatment of businesses originating in the EAC as “foreign” and different national

procedures make cross-border registration of business branches difficult. Payment for

registration of business names and the multiplicity of licenses for production,

distribution/sale of goods among the five EAC countries is cumbersome (EABC 2009). .

Moreover, exemptions on certain WTO obligations apply to four EAC members that are

categorized as less developed countries. When it comes to cross border trade in

manufactured products, it is not clear how this should impact their trade with Kenya in

specific areas, such as pharmaceutical and medicinal product (ADF 2012).

2.2.13 Use of Immigration and Visa Procedures

These are cumbersome, duplicative, and in many instances used contrary to the EAC

Protocol. EAC-wide, visa fees was removed in June 2007 and replaced by temporary

work permits for visitors seeking temporary work assignments. These do not apply to

traders, transporters, and visitors who are not seeking temporary employment. At the

border, officials at Namanga, Tanzania not only charge each truck USDD50, but also

15

impose a charge of USD100 as work permit for accompanying businesspersons who

would like to exhibit their products in Tanzania (EABC, 2008).

2.2.14 Cost of Translation

The official language of EAC business is English. However, the government and business

processes of Burundi remain francophone, with very limited programs to improve

English- and Kiswahili-speaking capacities of the traders and transporters. Hence, the

language of communication is yet another non-tarrif barrier recognized by Burundian

traders and trucks that travel in Uganda, Tanzania, and Kenya (Mutambara 2009). Traders

face specific charges. For instance, those who export goods to francophone Burundi from

Kenya pay a USD300 fee to translate the required regulations to English at Jomo

Kenyatta International Airport (JKIA) in Nairobi. Most traders prefer that regulations

should be translated in all official national languages spoken in EAC by the issuing

country (Ihiga, 2007).

2.2.15 Information Constraints

Not only are the rules and regulations not mutually recognized or harmonized, but the

dissemination of information on them is extremely poor across member states and within

them. Traders are not aware of some of the decisions made at the EAC Council, such as

the new transit regulations. At the borders, the customs agents often do not have the latest

directives and/or forms from their revenue authorities, and truck drivers may not know

the regulations specific to their cargo. Application of national legislations often appears to

be arbitrary and protectionist, based on outdated/cumbersome import authorization

systems (Okumu, 2010).

In all EAC member states, the traders and officials of traders’ associations criticize the

national governments for monopolizing information (deliberately or because of lack of

dissemination capacity) on decisions relevant to goods trade. Information gaps persist

between the policy makers, the implementing agencies like national bureaus of standards,

and the producers and traders (Kirk 2010). For example, the majority of the EAC traders

are not even aware of the NTM monitoring mechanism through which they can report

constraining measures. There is widespread concern that the mechanisms and the

language used to explain issues concerning goods trade in the EAC are not simplified

enough to be useful to small indigenous traders. This is particularly problematic for

16

Kenyan exporters into the Burundian markets, where the government systems are focused

on early stages of post conflict recovery—but are prevalent EAC-wide.

2.2.16 Insecurity/ Highway Crimes/Loss of Goods at the Container Freight Stations

Heightened security concerns along the trade routes and highway thefts add to concerns

for traders and transporters. Along the Ugandan segment of the Northern Corridor,

transporters who make night runs complain about acts of banditry (EABC, 2005). For the

case of Kenya, in 2007, 32 containers were lost to thieves and a number of people lost

their lives on the way to Kampala. The events that unfolded after the December 2007

election in Kenya led to one of the worst spurts of highway crimes witnessed in Kenya. In

Burundian territory, night travel is banned because of the prevailing lack of security.

Operation of the CFSs at various locations is affected by pilferage of cargo. Exporters end

up losing their goods and are often unable to lodge claims because they do not know

whose responsibility it is to pay for the claims (Ayoki, 2007).

2.3 Technical Barriers to Trade

Technical Barriers to Trade (TBT) are agreement deals with all technical requirements,

voluntary standards and conformity assessment procedures, except when the measures are

covered by the SPS Agreement, and ensure that they do not create unnecessary obstacles

to trade (Kee, Looi, Nicita and Olarreaga 2006). The technical barriers are divided into

two categories; institutional barriers and regulatory barriers to Kenya.

2.3.1 Institutional Barriers to Kenya’s Trade in the EAC

Various Kenyan ministries, departments and parastatals regulate and support the

country’s trade, including the Ministries of Trade, Finance, Justice and Constitutional

Affairs, Public Health and Immigration. Specific agencies that are also involved include

the Kenya Plant Health Inspectorate Service (KEPHIS), Kenya Revenue Authority

(KRA), Kenya Bureau of Standards (KEBS), Kenya Ports Authority (KPA) and Kenya

Roads Board (KRB). In performing their functions, these institutions and agencies

sometimes hinder the free and smooth flow of goods and services in the EAC. These

hindrances occur because of the setting of product standards, technical regulations and

conformity assessment procedures that constitute technical barriers to trade (Kenya

Revenue Authority, 2004).

17

Of the agencies mentioned, the KRA has the most significant impact on intraregional

trade. It is responsible for the enforcement and management of the customs laws and the

administration of common external tariffs. Additionally, the clearance of goods by the

KRA takes time because of the lack of harmonized import/ export documentation and

procedures. Currently, the digital data exchange system used by revenue authorities is

operational in Rwanda, Uganda and Kenya, but not in Burundi and Tanzania. Only

Kenyan customs operates for 24 hours, meaning that even if goods are cleared in Kenya,

they are delayed for Burundi and Tanzania by other member states (Kenya Revenue

Authority, 2004).

Other important agencies that affect the EAC’s trade in Kenya include KEPHIS, which

inspects plants and issues a plant import permit; KEBS, which tests and grades the quality

of goods; KPA, which manages port charges; and the Kenya police, which provide

security and inspect cargo by verifying legal documents. Others agencies include the

Immigration Department, which issues work permits; KRB, which deals with the

application of axle load specifications through the truck scales; and the Public Health

Department, which inspects goods to ensure that they are fit for consumption. All these

agencies operate independently of each other, without much coordination (thereby

occasioning delays). In addition, most of them do not operate 24 hours a day (Mold,

2005).

The Ministry of the EAC coordinates, facilitates and oversees affairs related to the EAC.

Together with similar ministries from partner states, it makes various policies for

implementation by relevant agencies (Pearson, 2006). However, there is a disconnect

between the officers at the border points and those at the ministry’s headquarters;

decisions and policies made by the latter are often not communicated to the former

(Michalopoulos, 2006).

2.3.2 Regulatory Barriers to Trade

The reduction of tariff barriers following the implementation of the EAC’s customs union

in 2005 resulted in an increase in the use of nontariff barriers as a tool for regulating

trade.

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2.3.2.1 Customs Clearance

Before the importing or exporting of commodities within the EAC, a trader must obtain

an import declaration form (IDF) issued by an appointed government agency in the

partner states. The issuance of IDFs involves numerous agencies (the government printer,

the national bank, KEPHIS, KEBS, KPA and KRA), which conduct the procedures for

the inspection, verification of dutiable value and certification of compliance. The result of

having all these agencies partake in the issuance of IDFs is often duplication of effort and

wasted business time. Additionally, in some cases, inspection bodies have not established

inspection posts at major entryways, thus forcing traders to travel long distances for

customs clearance (Little, 2007).

2.3.2.2 Standards and Certification

EAC member countries apply numerous certification and conformity assessments to

ensure technical quality standards in intra-EAC trade. However, there are differences in

product standards and agencies that are accredited to undertake the standardization

procedures. Some agencies accredited to conduct standardization in one country are not

recognized by officers in another country—a problem that adds to the cost of conducting

certification and wastes time (World Bank, 2007).

2.3.2.3 Rules of Origin

Currently, EAC member countries do not have their own specific rules of origin; instead,

they apply the ones adopted by the Common Market for Eastern and Southern Africa.

These rules of origin stipulate that a good must wholly be produced or contain imported

content of no more than 40 percent of the cost, insurance and freight value of the

materials used in production. The procedure for obtaining the certificate of origin is

cumbersome and lengthy, which itself is costly for the business community (World Bank,

2009).

2.3.2.4 Licenses and Permits

According to World Bank (2007c), licenses required within the EAC include a business

license, an import/export license, a road transportation license and a municipal council

license. The procedures for obtaining these various licenses vary across countries. In

addition, there is a lack of preferential treatment to EAC-originating businesses. This

makes cross-border registration of businesses a difficult, cumbersome and expensive

19

process. In most EAC countries, manual processes are used in business names searches,

registration and the payment of relevant charges. Moreover, multiple licenses are required

for the production, distribution and sale of goods, resulting in duplication and prohibitive

costs of doing business in the region.

2.3.2.5 Immigration Procedures

For citizens of EAC member countries, visas are not required for travel within the

community. However, movement of people across the region is restricted to passport

holders or those with temporary travel documents, and a majority of EAC residents do not

hold such documentation (Little, 2007). In addition, the requirement for the yellow fever

vaccination by Tanzania has been identified as a major bottleneck to trade. Although this

is justified on the basis of health concerns, the procedures for its application and the fee

of $50 for those who apply at the entry points pose a challenge. Therefore, the cost of

movement across boundaries has a significant impact on cross-border trade (World Trade

Organization, 2006b).

2.3.2.6 Police Checks and Roadblocks

Within the EAC, there are many roadblocks and police checkpoints along the major roads

that disrupt the efficient movement of goods. For every 100 kilometers, traders encounter

about two, five and seven roadblocks in Tanzania, Uganda and Kenya, respectively

(Karugia et al. 2009). According to Pedersen, (2006) these stops are costly in terms of

time and money. Making matters worse, police officers often solicit bribes at these

locations from transporters and traders, especially those whose vehicles have foreign

registrations.

2.3.2.7 Truck Scales and Inspections

The mandatory weighing of goods along the transit route adds time and cost of upkeep for

transporters. These costs are particularly significant on the Kenyan and Tanzanian sides

of the transportation corridors (Raman, 2006). Acceptable weights per axle and the

number of axles per metric ton have not yet been harmonized among the EAC member

states. Numerous truck scales along the main road transportation routes like the Northern

Corridor makes it difficult to move goods to destinations on time (Rizet and Hine, 2004).

In addition, because the EAC members have not yet harmonized gross vehicle mass, 54

20

metric tons are allowed in Kenya, 45 metric tons in Uganda, 56 metric tons in Tanzania

and 58 metric tons in both Rwanda and Burundi (Kimenyi, 2008).

2.3.2.8 Language Barriers

English is the agreed-upon language across the EAC for the purposes of administration,

public trade facilitation and private transactions. However, for francophone Burundi,

customs officials still insist on documents being translated into French. To fulfill this

requirement, traders must incur extra costs and time. Translation can involve traveling to

Bujumbura to have the documents certified before transportation commences (Little,

2007).

2.4 Mitigating Factors on Non-Tariffs and Technical Barriers to Trade within EAC

2.4.1 Experiences of other Trade Blocks With Elimination/Reduction of Non-Tariff

and Technical Barriers.

The regional economic communities (RECs) in Africa do not have an impressive record

of dealing with contentious non-tariff barriers (NTB/Ms). However, the EAC has quickly

achieved a lot that remains desirable for RECs in Sub-Saharan Africa. This study explores

beyond the continent for examples, to learn from successes of RECs and emulate them, as

appropriate, and to avoid failures. Lessons are borrowed from the European Union (EU)

and Association of Southeast Asian Nations (ASEAN), since they contain a number of

lessons that can help EAC plan well and minimize policy errors (Fliess and Lejarraga,

2005).

The Association of Southeast Asian Nations (ASEAN) represents a major example of

regional integration and commitment to the removal of Non tariff barriers. The ASEAN

strategy involved establishing a modality for eliminating NTBs including harmonizing

product standards and developing mutual recognition of standards across member

countries. The general features of the process for eliminating NTBs consists of

verification of information on NTBs, prioritization of products, developing specific work

programme and obtaining a mandate from the ASEAN Economic Ministers to implement

a work programme (ASEAN Secretariat, 2010). One major characteristic that

distinguishes the ASEAN experience from that of the EU in dealing with NTBs is its

sector-based approach. In this strategy, ASEAN has focused its economic integration and

21

elimination of trade barriers on a few sectors (chosen among sectors with the highest

potential for intra-regional trade and integration).

In the European Union (EU), elimination of NTBs was the task of the common market

programme. In 1985, the Community’s White Paper identified NTBs and proposed 282

measures to be eliminated with a detailed timetable for completion by the end of 1992

(Sarfati 1998). Most of the proposals were adopted and became part of national laws of

the various member countries. The programme for elimination of the NTBs abolished a

series of technical, physical and fiscal barriers to regional trade through institution of

single standards and regulation, the simplification of the fiscal structure and border

related controls, and the institution of new rules for public procurement (Sarfati, 1998).

While the EU has significantly reduced NTBs, complete elimination has not been

achieved. Ongoing activities for elimination of NTBs include a review of national NTBs

reports, national procedures for inter-ministry co-operation on NTBs, exchange of

information and views on a range of active NTB elimination programmes/projects and

establishing a communication network between NTB focal points. Besides, there are

ongoing negotiations and reforms as well measures to strengthen the process in various

ways such as seeking support of political authorities to support for continued work on

NTBs within the established, directed effort to continue and intensify the work to identify

and eliminate NTBs in the region, establishing appropriate procedures for identifying and

eliminating NTBs, and procedures to have high level commitment and support and

visibility ASEAN (2010). The member states commitment to provide the framework for

continued work on NTBs, meet a couple of times per year, otherwise communicating by

telephone and e-mail, identify NTBs on a continuous basis, prepare the respective annual

reports on NTBs, consider the formation in each country of a national inter-

ministry/agency communication network chaired by a high-level official from EU

Secretariat (World Bank 2008).

Furthermore, the programme includes investment in One-Stop-Centers and electronic

single window systems at border stations, review of port charges to international levels,

political goodwill to facilitate cross-border movement of people while waiting for

finalization of relevant protocol, mutually recognize inspection procedures, and

inspection reports and certificates, clear guidelines for stopping commercial vehicles, a

22

daily record of vehicles stopped, reasons and measures taken, joint verification of goods

at border posts, infrastructure improvement, cancellation of transit bonds, investment in

parking sheds and parking yards, lifting restrictions of truck haulage, expand working

hours (World Bank 2008).

2.4.2 Way Forward For Kenyan in EAC

A series of EAC trade studies (Ihiga 2007; Mmasi and Ihiga 2007) reported some major

NTBs that included customs and administrative entry procedures barriers; sanitary and

Phystosanitary measures; technical barriers to trade, standards, inspection time spent, un-

harmonized procedures for issuance of certification and other distribution related

obstacles. Some of these regulations or NTBs, while justified on the basis of health,

safety and security, among others, have implications on production, consumption,

economic efficiency and trade flows (Okumu and Okuk, 2011). Arising from

identification of NTBs, EAC time-bound programmes for their elimination have been

prepared (EAC Secretariat 2009). These include abolishing charges, corruption,

discriminatory charges, landing fees, entry requirements; application of non-

discriminatory excise duty regime, EAC Rules of Origin, WTO valuation rules;

adherence to EAC Rules of Origin Criteria of 30 percent local value added;

modernization including computerization of procedures to ensure faster clearance,

systems interfacing, and weigh-in-motion systems.

2.4.2.1 Policy Implications

The NTBs have managed to lead to the famous informal trade within the region. Informal

trade is seen to have occupied a greater share of the regional trade. NTBs are escalating

partly due to lags in policy and legislative implementation. Therefore, going forward, one

of the key steps to take is to design effective mechanisms for identifying and verifying

information about NTBs, and prioritizing and ensuring their elimination. This will require

giving the EAC Secretariat the mandate to compel individual countries to eliminate any

identified NTB and to ensure that no new ones are created (Abegaz, 2008). In addition, it

will require transparency in information gathering and sharing, as well as commitment

and willingness to eliminate the NTBs. Second, policy and legislative decisions made by,

for example, Council of Ministers should be communicated in time for effective

implementation. In the medium term, standards should be harmonized and enforcement of

compliance be transferred to one regional body, such as EAC Bureau of Standards. In the

23

short run, the EAC countries should develop a mutual recognition of standards across

member countries (Okumu and Okuk, 2011). Hangi, (2010) recomends the need for EAC

to find ways on how to harmonize the prevailing domestic tax systems, laws and

procedures so as to reduce distortions and smuggling as well as introducing some level of

predictability in business transactions.

2.4.2.2 Involve the General Public in the Process of EAC Integration

According to a report by Okumu and Okuk, (2011) the public, (citizens of the EAC

countries) is not fully aware and involved in the process of EAC integration. Most people

involved in business within the region don’t have enough education on what needs to be

done so as to improve their businesses. Education on the NTBs, how to handle

cross‐ border customs and the like, is not given and that has a great impact on the entire

regional trade (Hangi, 2010). The EAC states with full involvement of the private sector

associations and civil society organizations should intensify public awareness campaigns

about customs union and its economic opportunities. Every effort should be made to

reach out to the entire population of the EAC countries.

2.4.2.3 Trade Impact

A research by World Bank, (2008) recommends for need to make choice on the basis of

the NTB’s trade restrictiveness, including the following elements: number of private

sector complaints, value of export/import affected, and difference between domestic and

world prices for consumer. The is need to prioritize these constraints based on the major

stake holders who are affected, for the Kenyan case, majority of Kenyan exporters who

fall in the private sector, complaints in the EAC are the strongest about poor

infrastructure. This is followed by corruption/fraudulent behavior. They also complain

about the limited human skills and technical capacity of the trade/transit facilitators and

national government officials in the EAC. Further the World Bank (2008) report strongly

suggest the need to assess the total value of export/import affected by a particular NTB,

this could be done by listing the top goods by value traded in the EAC. For most EAC

members, these goods are also the most important ones in the value share of overall trade.

Hence, prioritizing the NTBs that apply specifically to these goods will yield added

benefits from expansion of EAC’s global trade. Further investigation may be needed, to

determine the extent to which the NTMs increase the consumer prices of these goods.

24

2.4.2.4 Develop Strategy for Reducing Differences and Capacity Constraints

One way forward for developing a strategy for reducing/removing NTBs given national

differences and capacity constraints is to adopt a product/sector view in a phased manner.

In ASEAN, the choice of these sectors was made on the basis of comparative advantage

in natural resource endowments, labor skills, cost competitiveness, and value-added

contribution to the REC economy or share of intra-regional trade. For EAC, the intra-

EAC trade is quite product-specific. However, the current NTBs and technical barriers on

formal goods trade revealed by private sector firms and public sector institutions, are

largely not product-specific. A report by Beghin, (2006) reveals the large costs faced by

the private sector. In this way, it would be possible to deal with the problem of

formality/informality of trade and big differences between written rules and actual border

practice.

In a few goods, like milk, beef, poultry (including day-old chicks), the EAC may want to

develop specific region-wide technical and/or SPS standards after detailed investigations.

In choosing the specific product it would be important to consider the regulatory

objective and /or intra-EAC trade impact of the NTM. Here the guidance from the

ongoing process of deliberations and decisions in the ASEAN countries will be useful.

This could be based on harmonization with performance requirements, involving a single

set of fully harmonized and detailed provisions. This approach is used for products that

could put consumers’ safety at risk and for which performance-oriented legislation is felt

needed. Any capacity building initiatives in the overall area of the technical and/or SPS

standards for goods should be assessed vis-à-vis clear articulated demand from end-users

in the public/private sector, rather than from the national bureaus of standards (Hangi,

2010).

2.4.2.5 Invest in Infrastructure

Where government monopolies and/or fiscal constraints have given rise to severe

infrastructure constraints, the related NTBs will need prior large-scale investments and

long-term interventions in expansion/rehabilitation of physical infrastructure in a

coordinated manner across the EAC, especially along the two corridors, North and South

corridors. Here the prioritization could consider the potential for combining the economic

strengths of EAC members for regional advantage; facilitating intra-EAC trade and

investments; attracting and retaining manufacturing activities within EAC; promoting

25

outsourcing in EAC; and developing EAC products and services (Okumu & Nyankori,

2010). Infrastructure bottleneck is critical in the region. A World Bank (2008) suggests

three key points emerging in this area. These are; the EAC executive secretariat ought to

prepare and execute regional infrastructure improvement plan(s), especially the roads

network, with a view to ease the costs imposed on landlocked countries. There is need for

the provision of wagon ferry vessels on Lake Victoria and Lake Tanganyika, through

public or private investments, with adequate safety regulations for their operation.

Important also there is need to institute an efficient railway system through the required

investment by the national government in rails and by the private operators in wagons to

improve the competitiveness and safety of the transportation of bulk products in the

region. The need for developing dual rail tracks across the region is also imperative.

There is need to regulate the railway service provider to prevent inefficiency and abuse of

market power in niches that railways could dominate. Improvement of infrastructure is

fundamental to lowering costs of business and facilitating efficiency in production,

transportation and delivery of goods and services (Hangi, 2010).

The decisions and action related to technical standards for goods and the associated SPS

considerations can be visualized in this category, since it is expected to take a prolonged

period to intervention to adopt a general framework, adopt it and install the appropriate

infrastructure and human capacity to implement the decisions (Okumu & Nyankori,

2010).

2.4.2.6 Apply the Principle of Asymmetry and Promote the use of English

As EAC explores a program to achieve the common market—including the removal of

legal barriers to the free movement of goods, services, capital, and labor— Stephen,

Karingi, Fekadu and Belay (2009), recommends putting in place a policy to mitigate the

effects of the completion of the internal market on relatively disadvantaged member states

(those that are landlocked or are the least economically developed). This will reduce

development discrepancies between the member states. Removal of physical barriers for

goods crossing the intra-EAC borders is merely the first step to facilitate trade through

reduced delivery times and lower associated costs.

When it comes to language of communication, the agreed language across EAC for

overall administration, public trade facilitation, and private transactions is English.

26

However, for members that were originally francophone, especially Burundi, Mugisa,

Onyango and Mugoya (2009) observe that concrete steps are recommended to promote

English in government administration, and in doing so, facilitate the private sector goods

trade of these members.

2.4.2.7 Monitoring for new NTBs and Technical Barriers (NTB/TB)

With respect to the monitoring for new NTBs and Technical barriers that may be imposed

by member states, the EAC could learn from the EU’s adoption of preventive measures

which oblige member states tonotify all draft regulations and standards related to

technical specifications to be introduced on national territories. In this way, the

Commission is able to monitor and prevent the raise of new national barriers to intra-EU

trade (World Bank 2008).

The EU’s internal market scoreboard may prove to be a useful instrument for the EAC

Secretariat to emulate. The European Commission maintains this scoreboard on member

adherence to REC-wide rules including those on NTB/TB on trade, which can be used to

name and shame members into compliance. For the EAC, such a scoreboard could report

the status of the NTB/TB action plans and the number of infringement proceedings due to

new NTB/TB s initiated against member states. These proceedings could be initiated as a

consequence of continuing or new application of a NTB/TB by a member state. In this

case, the member state is encouraged to quickly remedy the situation, and if it fails to do

so it is referred to the EAC court, which can impose a sanction. To supervise the proper

functioning of the internal market for goods in the EAC, the Secretariat would need to

develop adequate capacity for classifying NTB/TB reported and monitoring, as would the

member states in identifying and notifying the observed NTB/TB. Later this could be

supplemented by capacity for enforcement and redress action (IFPRI, 2008). Other EAC

institutions could be needed to contribute to this important function (EAC-EABC 2006).

2.5 Chapter Summary

The study, in this chapter, has addressed the main objectives of the research as

appropriate. The Non-Tariff Barriers, Technical Barriers to Trade and the mitigating

factors have been addressed in sections 2.2, 2.3 and 2.4 respectively. The next chapter is

about the research methodology the study adopted to answer the research questions

mentioned in chapter one.

27

CHAPTER THREE

3.0 RESEARCH DESIGN AND METHODOLOGY

3.1 Introduction

This chapter describes the research methodology and procedures that were used to carry

out the study. In this chapter, the population and sampling design used were also

described. Under sampling design the: sampling frame, sampling technique, sample size

and research procedures were presented. Described also in the chapter are data collection

and analysis techniques employed.

3.2 Research Design

A research design is the plan and structure of investigation so conceived as to obtain

answers to research questions (Cooper & Schindler, 2000). It expresses both the structure

of the research problem and the plan of investigation used to obtain empirical evidence on

relations of the problem. Maylor and Blackmon (2005), states that a research design is a

plan or structured framework of how one intends to solve the research problem and to

expand knowledge and understanding. This study employed exploratory research designs.

Exploratory study is used when a researcher lacks a clear idea of the problems they are

likely to meet during the study (Cooper & Schindler, 2008). This form of research design

provides a clear understanding of a problem where small amount of information exist

(Saunders, Lewis, & Thornhill, 2009). According to Adams and Schvaneveldt (1991)

exploratory research is likened to the activities of the traveller or explorer. The purpose of

studying a situation or problem is in order to establish the relationship between variables

(Saunders, Lewis, & Thornhill, 2003).

The study aimed at establishing both the technical and non-tariff trade barriers that faced

Kenyan exporters within the East African Community. This study sought to elaborate on

the various challenges that Kenyan exporters faced in their quest of selling their goods

and services within EAC markets. Further, it explored the necessary measures that ought

to be taken to address these challenges. Through an explorative research design, this

research sought to highlight various technical and non-tariff trade barriers that hindered

trade within EAC with particular emphasis, on barriers that hindered Kenyan exporters in

the EAC.

28

3.3 Population and Sampling Design

3.3.1 Population

Population is total collection of elements upon which inferences can be made (Schindler,

2008). The larger set of observation is the population while the smaller set of this big

population is called the sample. To obtain the population in this study the, 9,585 exporters

in Kenya, specifically from Nairobi were considered.

Table 3.1: Population Distribution

DISTRIBUTION

Category No. Percentage

Automobile 1600 17

Manufacturing 3200 33

Agriculture 4785 50

Total 9585 100

Source: Export Promotion Council (2013)

3.3.2 Sampling Design

A sample is a group from the population that is the representative of the population

(Coopers & Schindler, 2008). Sampling design is a technique used in selecting a

proportionate representation from the total sample size, which is the population under

study. Sampling enables: lower cost, accuracy of results, increased speed of data

collection, and availability of population elements. The study used a random sampling

technique to get a representative sample size.

3.3.2.1 Sampling Frame

Sampling frame is a list of elements from which the sample is actually drawn and it is

closely related to the population under study (Cooper & Schindler, 2008). They further

explain that this list could of geographical areas, institutions, individuals, or other units.

In this study, a list of Kenyan Exporters (from Nairobi) provided by the Kenya Export

Promotion Council was adopted.

3.3.2.2 Sampling Technique

To determine the study sample, the researcher used statistics and employed random

stratified sampling techniques. Stratified random sampling is a method of sampling that

29

involves the division of a population into smaller groups known as strata (Saunders,

Lewis, & Thornhill, 2003). Stratified random sampling, the strata are formed based on

members’ shared attributes or characteristics (Cooper & Schindler, 2008). A random

sample from each stratum is taken in a number proportional to the stratum's size when

compared to the population. These subsets of the strata are then pooled to form a random

sample (Saunders, Lewis, & Thornhill, 2003). Stratified sampling was used because it

allowed the researcher to divide the sample into appropriate strata that were mutually

exclusive to the afore-mentioned sample frame. The three main advantages of sampling

are that the cost is lower, data collection is faster, and since the data set is smaller, it is

possible to ensure homogeneity and to improve the accuracy and quality of the data

(Cooper & Schindler, 2008).

3.3.2.3 Sample Size

A sample size as the set of elements from which data is collected (Schindler & Cooper

(2003). A good sample size should provide information that is detailed and

comprehensive (Maylor & Blackmon, 2005). Researchers rarely survey the entire

population for two reasons: the cost is too high, and the population is dynamic in that the

individuals making up the population may change over time (Mugenda & Mugenda,

2003).

The Yamane‘s formula of 2001 (Israel (2002) was used to determine the sample size from

population within each stratum. It provided a 95 percent level of confidence and a

maximum variability (p) =.09. A standard error of 9% was considered in the sampling

calculation. On a population of 9585, an approximate figure from the export promotion

council gave a sample of 121 respondents as shown.

n = N

1+N (e) 2

Where n was the sample size, N was the population size and e was the level of precision:

n = 9585

1+ 9585(0.09x0.09)

= 121 Respondents

30

Table 3.2 Sample Size

DISTRIBUTION

Category No. Percentage

Automobile 21 17

Manufacturing 40 33%

Agriculture 60 50

Total 121 100

Source: EPC (2013)

3.4 Data Collection Methods

Primary as data observed or collected from firsthand experience (Cooper & Schindler,

2008). Data was collected from primary sources using questionnaires. The questionnaire

was designed to capture the essential information needed for analysis. It captured

respondents’ general information and specific information arising from the various

objectives of the study.

The questionnaire consisted of structured questions that were both open and closed ended.

The researcher assisted the respondents, where necessary to understand the significance

of the study and ensured that the response was compatible with the objective of the study.

A letter of introduction was attached to the questionnaires explaining to the respondents

the reason for the study and assuring them of their confidentiality.

3.5 Research Procedures

A pilot study was conducted randomly on six respondents from the three major business

categories indicated in the sample size frame so as to ascertain the suitability of the tool

(questionnaire) before administering it in the study. Pre-testing enabled the researcher to

fine tune the questionnaire and enhance the objectivity and effectiveness.

3.6 Data Analysis Methods

Data analysis is a research technique for the objective, systematic and qualitative

description of the manifest content of a communication (Cooper & Schindler, 2008). In

order for research quality in this study, quantitative methods of data analysis were used.

Descriptive statistics involves a process of transforming a mass of raw data into tables,

charts, with frequency distribution and percentages, which are a vital part of making

31

sense of the data (Denscombe, 2006d). The research data was analyzed using Statistical

Package for Social Sciences (SPSS) program and presented using tables to give a clear

picture of the research findings at a glance. Key among the quantitative tools that was

employed were descriptive statistics, which included measures of central tendencies, such

as means, standard deviation, frequencies, and percentages. These tools of analysis used

for instance to determine views of commonality and deviations from commonality.

Correlation was another useful statistic that described the degree of relationship between

variables used and was employed to see if such relationships existed among variables

being studied.

3.7 Chapter Summary

Chapter three has described the methodology and procedures that were used to carry out

the study. It started with a brief introduction highlighting the general methodology and

structure of the chapter. The chapter also highlighted the method that was used to conduct

the research and its use was justified. The population was defined and the sampling

technique, technique, and sample size described. Finally, the data collection techniques

and research procedures to be used have been discussed. The next chapter discusses the

study results and findings.

32

CHAPTER FOUR

4.0 RESULTS AND FINDINGS

4.1 Introduction

This chapter presents the study findings received after analyzing the collected data using

SPSS. The section presents the data in the form of tables and graphs, with brief

explanations on the figures presented within the graphs and tables.

4.2 Response Rate and General Information

4.2.1 Response Rate

The researcher distributed 121 questionnaires to the respondents. After the collected

questionnaires were cleaned and refined, there were 96 questionnaires that were

completely filled. This gave the study a response rate of 79.3% which was above the

required threshold.

4.2.2 General Information

In this sub-section, background information of the businesses is provided. This is in terms

of, nature of business, length in EAC export, and trade barriers encountered.

4.2.2.1 Nature of Business

The study inquired about the nature of their business owned by the respondents and the

response in Figure 4.1 shows that: 34.9% were wholesalers/ suppliers, 25.6% were

manufacturers, 20.9% were automobile dealers, and 18.6% were service providers.

Figure 4.1 Nature of Business

33

4.2.2.2 Length in EAC Export

The study sought for the length of time the exporters had been in the export business in

EAC and the response in Figure 4.2 shows that: 52.1% had been exporters for 1-2 years,

18.8% had been exporters for 3-5 and 6-8 years respectively, 6.2% had been exporters for

11 years and above, and 4.2% had been exporters for 9-10 years. These results show that

the population had been in the exporting business for a good period of time making them

eligible for the study.

Figure 4.2 Length in EAC Export

4.2.2.3 Trade Barriers Encounter

The study sought do determine whether the exporters had experienced any trade barriers

in their business and the response in Figure 4.3 shows that: 77.1% had encountered

barriers in export trade, while 22.9% had not. These results show that majority of

exporters in Kenya experience trade barriers.

Figure 4.3 Trade Barriers Encounter

34

4.3 Non-Tariff Barriers on Trade (NTBs)

This sub-section provides the results of NTBs rating, correlation and regression analysis

with regards to the response received. These results have been presented in the form of

tables.

4.3.1 Rating of Non-Tariff Barriers in Trade

The study sought to examine the rating of non-tariff barriers in trade by exporters using

the scale Strongly Agree, Agree, Neutral, Disagree, and Strongly Disagree. The response

received was as indicated in Table 4.1.

Table 4.1 Rating of Non-Tariff Barriers in Trade

Str

on

gly

Agre

e

Agre

e

Neu

tral

Dis

agre

e

Str

on

gly

Dis

agre

e

Mea

n

Std

Dev

Documentation and

Procedures

50% 31.2% 14.6% 4.2% 0% 1.73 .868

Too many agencies involved

in overall export inspection

and certification in the region

39.6% 35.4% 14.6% 10.6% 0% 1.95 .988

Verification of transit cargo 44.7% 29.8% 10.6% 10.6% 4.3% 2.00 1.179

Lack of harmonization in

working hours at the border

posts

20.8% 43.8% 22.9% 8.3% 4.2% 2.31 1.035

Delays at weighbridges 41.7% 29.2% 22.9% 6.2% 0% 1.94 .954

Multiple police road blocks

and mobile control

39.6% 31.2% 10.4% 10.4% 8.3% 2.17 1.293

Prohibition on transportation

of locally produced goods

12.5% 33.3% 29.2% 8.3% 16.7% 2.83 1.260

East Africa Community transit

licenses for goods

25% 29.6% 16.7% 14.6% 4.2% 2.33 1.136

Truck entrance fees and grace

period

33.3% 39.6% 14.6% 6.2% 6.2% 2.13 1.141

Business registration 52.1% 29.2% 8.3% 6.2% 4.2% 1.81 1.104

Use of immigration and visa

procedures

35.4% 35.4% 18.8% 8.3% 2.1% 2.06 1.039

Poor information

dissemination across the East

Africa Community

31.2% 37.5% 27.1% 4.2% 0% 2.04 .874

Language barrier 27.1% 27.1% 25% 8.3% 12.5% 2.52 1.321

Insecurity/ highway

crimes/loss of goods at the

container freight stations

47.9% 25% 20.8% 6.2% 0% 1.85 .967

35

Table 4.1 shows that documentation and procedures were a barrier as strongly agreed to

by 50%, agreed to by 31.2%, 14.6% were neutral, and disagreed to by 4.2%; the results

had a mean of 1.73 and a standard deviation of 0.868. Too many agencies are involved in

overall export inspection and certification in the region was a barrier as strongly agreed to

by 36.9%, agreed to by 35.4%, 14.6% were neutral, and disagreed to by 10.6%; the

results had a mean of 1.95 and a standard deviation of 0.988. Verification of transit cargo

was a barrier as strongly agreed to by 44.7%, agreed to by 28.9%, 10.6% were neutral,

10.6% disagreed, and 4.3% strongly disagreed; the results had a mean of 2.00 and a

standard deviation of 1.179.

Lack of harmonization in working hours at the border posts was a barrier as strongly

agreed to by 20.8%, agreed to by 43.8%, 22.9% were neutral, 8.3% disagreed, and 4.2%

strongly disagreed; the results had a mean of 2.31 and a standard deviation of 1.035.

Delays at weighbridges was a barrier as strongly agreed to by 41.7%, agreed to by 29.2%,

22.9% were neutral, and 6.2% disagreed; the results had a mean of 1.94 and a standard

deviation of 0.954. Multiple police road blocks and mobile control was a barrier as

strongly agreed to by 39.6%, agreed to by 31.2%, 10.4% were neutral, 10.4% disagreed,

and 8.3% strongly disagreed; the results had a mean of 2.17 and a standard deviation of

1.293. Prohibition on transportation of locally produced goods was a barrier as strongly

agreed to by 12.5%, agreed to by 33.3%, 29.2% were neutral, 8.3% disagreed, and 16.7%

strongly disagreed; the results had a mean of 2.83 and a standard deviation of 1.260.

East Africa Community transit licenses for goods was a barrier as strongly agreed to by

25, agreed to by 29.6%, 16.7% were neutral, 14.6% disagreed, and 4.2% strongly

disagreed; the results had a mean of 2.33 and a standard deviation of 1.136. Truck

entrance fees and grace period was a barrier as strongly agreed to by 33.3%, agreed to by

39.6%, 14.6% were neutral, 6.2% equally disagreed, and strongly disagreed; the results

had a mean of 2.13 and a standard deviation of 1.141.

Business registration was a barrier as strongly agreed to by 52.1%, agreed to by 29.2%,

8.3% were neutral, 6.2% disagreed, and 4.2% strongly disagreed; the results had a mean

of 1.81 and a standard deviation of 1.104. Use of immigration and visa procedures was a

barrier as strongly agreed to by 35.4%, agreed to by 35.4%, 18.8% were neutral, 8.3%

disagreed, and 2.1% strongly disagreed; the results had a mean of 2.06 and a standard

36

deviation of 1.039. Poor information dissemination across the East Africa Community

was a barrier as strongly agreed to by 31.2%, agreed to by 37.5%, 27.1% were neutral,

and 4.2% disagreed; the results had a mean of 2.04 and a standard deviation of 0.0874.

Language barrier was a barrier as strongly agreed to by 27.1%, agreed to by 27.1%, 25%

were neutral, 8.3% disagreed, and 12.5% strongly disagreed; the results had a mean of

2.52 and a standard deviation of 1.321. Insecurity/ highway crimes/loss of goods at the

container freight stations was a barrier as strongly agreed to by 47.9%, agreed to by 25%,

20.8% were neutral, and 6.2% disagreed; the results had a mean of 1.85 and a standard

deviation of 0.967.

4.3.2 Correlations of Non-Tariff Barriers in Trade

A correlation test was carried out to determine the significance of the various non-tariff

barriers in trade factors that affected exporters. A p value of less or equal to 0.01 and/or

0.05 indicated that the particular factor was significant as a barrier. The results are

summarized in Table 4.2.

Table 4.2 Correlations of Non-Tariff Barriers in Trade

Correlations

Documentation and Procedures .402**

.005

Too many agencies involved in overall export inspection and

certification in the region

.581**

.000

Verification of transit cargo .646**

.000

Lack of harmonization in working hours at the border posts .511**

.000

Delays at weighbridges .456**

.001

Multiple police road blocks and mobile control .432**

.002

Prohibition on transportation of locally produced goods .232

.113

East Africa Community transit licenses for goods .500**

.000

Truck entrance fees and grace period .335*

.020

Business registration .184

.210

Use of immigration and visa procedures .304*

.036

Poor information dissemination across the East Africa Community .260

.074

37

Language barrier .048

.745

Insecurity/ highway crimes/loss of goods at the container freight stations .497**

.000

** Correlation is significant at the 0.01 level (2-tailed)

* Correlation is significant at the 0.05 level (2-tailed)

Table 4.2 shows that documentation and procedures were a significant non-tariff barrier

to trade (r=0.402, p<0.01). Too many agencies involved in overall export inspection and

certification in the region were a significant non-tariff barrier to trade (r=0.581, p<0.01).

Verification of transit cargo was a significant non-tariff barrier to trade (r=0.646, p<0.01).

Lack of harmonization in working hours at the border posts was a significant non-tariff

barrier to trade (r=0.511, p<0.01). Delays at weighbridges were a significant non-tariff

barrier to trade (r=0.456, p<0.01). Multiple police road blocks and mobile control were a

significant non-tariff barrier to trade (r=0.432, p<0.01).

East Africa Community transit licenses for goods were a significant non-tariff barrier to

trade (r=0.500, p<0.01). Truck entrance fees and grace period was a significant non-tariff

barrier to trade (r=0.335, p<0.05). Use of immigration and visa procedures was a

significant non-tariff barrier to trade (r=0.304, p<0.05). Insecurity/ highway crimes/loss

of goods at the container freight stations was a significant non-tariff barrier to trade

(r=0.497, p<0.01).

Prohibition on transportation of locally produced goods was an insignificant non-tariff

barrier to trade (r=0.232, p>0.05). Business registration was an insignificant non-tariff

barrier to trade (r=0.184, p>0.05). Poor information dissemination across the East Africa

Community was an insignificant non-tariff barrier to trade (r=0.260, p>0.05). Language

barrier was an insignificant non-tariff barrier to trade (r=0.048, p>0.05).

4.3.3 Regression Analysis for Non-Tariff Barriers in Trade

A regression analysis for Non-Tariff Barriers was computed and the results provided a

model summary for NTB barriers to trade. The results are summarized in Table 4.3.

38

Table 4.3 Regression Model Summary for NTB Barriers to Trade

Model R R Square Adjusted R Square Std. Error of the Estimate

1 .685 .469 .229 .99042

a. Predictors (Constant): NTB Barriers to Trade

The regression model summary in Table 4.3 indicates that 22.9% of the variance in trade

barriers can be explained by NTB barriers of trade. These indicates that NTB barriers to

trade impact exporters by 22.9%, and the rest could be explained by other factors.

4.3.4 Regression Coefficients for NTB Barriers to Trade

A regression analysis for Non-Tariff Barriers factors was computed and the results

provided regression coefficients. The results are summarized in Table 4.4.

Table 4.4 Regression Coefficients for NTB Barriers to Trade Factors

Model

Unstandardized

Coefficients

Standardized

Coefficients

t

Sig. B Std. Error Beta

1 (Constant)

Customs & administrative

procedures

Institutions & custom controls

Verification of transit cargo

Border posts working hours

Weighbridge delays

Police road blocks & mobile

control

Local goods prohibition

EAC transit licenses

Truck entry fees & grace period

Business registration

Immigration & visa procedures

Translation costs

Information constraints

Insecurity & loss of goods

.558

.152

-.051

.367

.147

-.206

-.253

.096

.474

-.050

.192

-.300

.290

-.161

.077

.612

.256

.310

.201

.202

.252

.148

.152

.182

.193

.197

.188

.219

.158

.224

.119

-.045

.385

.137

-.174

-.294

.109

.479

-.050

.192

-.279

.226

-.185

.067

.913

.595

-.163

1.825

.727

-.817

-1.708

.633

2.597

-.257

.974

-1.592

1.324

-1.014

.345

.369

.556

.871

.078

.473

.420

.098

.531

.014

.799

.337

.122

.195

.318

.733

a. Dependent Variable: Barrier to Trade

The coefficients in Table 4.4 show that EAC transit licenses had a positive and significant

influence on trade barrier since its precision level was <0.05. The table shows that

customs and administrative procedures, institutions and custom controls, verification of

transit cargo, border posts working hours, weighbridge delays, police road blocks and

39

mobile control, local goods prohibition, truck entry fees and grace period, business

registration, immigration and visa procedures, translation costs, information constraints,

and insecurity and loss of goods had an insignificant influence on trade barrier since the

precision level for all factors was >0.05 which was the study’s threshold.

4.4 Technical Barriers to Trade (TBT)

This sub-section provides the results of TBTs rating, correlation and regression analysis

with regards to the response received. These results have been presented in the form of

tables.

4.4.1 Rating of Technical Barriers to Trade

The study sought to determine the rating for technical barriers to trade using the scale

Strongly Agree, Agree, Neutral, Disagree, and Strongly Disagree. The response received

was as indicated in Table 4.5.

Table 4.5 Rating of Technical Barriers to Trade

Str

on

gly

Agre

e

Agre

e

Neu

tral

Dis

agre

e

Str

on

gly

Dis

agre

e

Mea

n

Std

Dev

Technical barriers to trade

includes voluntary standards

and conformity assessment

procedures

25.5% 40.4% 19.1% 14.9% 0% 2.23 1.004

Institutional barriers to

Kenya’s trade in the EAC is a

technical barrier to trade

28.3% 37% 21.7% 10.9% 2.2% 2.21 1.052

Some Kenyan ministries,

departments and parastatals

have become technical barriers

to trade

14.9% 40.4% 25.5% 12.8% 4.3% 3.62 7.727

KRA enforces and manages

the custom laws and the

administration of common

external tariffs

40.4% 38.3% 12.8% 8.5% 0% 1.89 .937

Kenya Plant Health

Inspectorate Service inspects

plants and issues a plant import

permit

40.4% 21.3% 29.8% 6.4% 2.1% 2.08 1.080

Kenya Bureau of Standards

tests and grades the quality of

goods and in process causes

barriers to trade

32.6% 32.6% 8.7% 19.6% 6.5% 2.35 1.303

40

Application of numerous

certification and conformity

assessments

27.7% 36.2% 25.5% 8.5% 2.1% 2.21 1.020

The rules of origin which

stipulate that a good must

wholly be produced or contain

imported content of no more

than 40 percent of the cost,

insurance and freight value of

the materials used in

production

17% 38.3% 25.5% 12.8% 6.4% 2.53 1.120

The procedure for obtaining

the certificate of origin is

cumbersome and lengthy,

which itself is costly for the

business community

41.3% 30.4% 17.4% 8.7% 2.2% 2.00 1.075

The variations in the

procedures for obtaining

licenses and business permits

across countries

31.9% 27.7% 23.4% 12.8% 4.3% 2.29 1.177

Table 4.5 shows that technical barriers to trade are agreement deals with all technical

requirements, voluntary standards and conformity assessment procedures as strongly

agreed to by 25.5%, agreed to by 40.4%, 19.1% were neutral, and 14.9% disagreed; the

results had a mean of 2.23 and a standard deviation of 1.004. Institutional barriers to

Kenya’s trade in the EAC is one of the categories of technical barriers to trade was a

barrier as strongly agreed to by 28.3%, agreed to by 37%, 21.7% were neutral, 10.9%

disagreed, and 2.2% strongly disagreed; the results had a mean of 2.21 and a standard

deviation of 1.052. Various Kenyan ministries, departments and parastatals are the

institutional barriers to trade as strongly agreed to by 14.9%, agreed to by 40.4%, 25.5%

were neutral, 12.8% disagreed, and 4.3% strongly disagreed; the results had a mean of

3.62 and a standard deviation of 7.727.

KRA is responsible for the enforcement and management of the customs laws and the

administration of common external tariffs hence causing TBT as strongly agreed to by

40.4%, agreed to by 38.3%, 12.8% were neutral, and 8.5% disagreed; the results had a

mean of 1.89 and a standard deviation of 0.937. Kenya Plant Health Inspectorate Service

inspects plants and issues a plant import permit as strongly agreed to by 40.4%, agreed to

by 21.3%, 29.8% were neutral, 6.4% disagreed, and 2.1% strongly disagreed; the results

had a mean of 2.08 and a standard deviation of 1.080. Kenya Bureau of Standards tests

and grades the quality of goods and in process causes barriers to trade as strongly agreed

41

to by 32.6%, agreed to by 32.6%, 8.7% were neutral, 19.6% disagreed, and 6.5% strongly

disagreed; the results had a mean of 2.35 and a standard deviation of 1.303.

Application of numerous certification and conformity assessments as strongly agreed to

by 27.7%, agreed to by 36.2%, 25.5% were neutral, 8.5% disagreed, and 2.1% strongly

disagreed; the results had a mean of 2.21 and a standard deviation of 1.020. The rules of

origin which stipulate that a good must wholly be produced or contain imported content

of no more than 40 percent of the cost, insurance and freight value of the materials used

in production as strongly agreed to by 17%, agreed to by 38.3%, 25.5% were neutral,

12.8% disagreed, and 6.4% strongly disagreed; the results had a mean of 2.53 and a

standard deviation of 1.120. The procedure for obtaining the certificate of origin is

cumbersome and lengthy, which itself is costly for the business community as strongly

agreed to by 41.3%, agreed to by 30.4%, 17.4% were neutral, 8.7% disagreed, and 2.2%

strongly disagreed; the results had a mean of 2.00 and a standard deviation of 1.075. The

variations in the procedures for obtaining licenses and business permits across countries

as strongly agreed to by 31.9%, agreed to by 27.7%, 23.4% were neutral, 12.8%

disagreed, and 4.3% strongly disagreed; the results had a mean of 2.29 and a standard

deviation of 1.177.

4.4.2 Correlations of Technical Barriers to Trade

A correlation test was carried out to determine the significance of the various technical

barriers to trade factors that affected exporters. A P value of less or equal to 0.01 and/or

0.05 indicated that the particular factor was significant as a barrier. The results are

summarized in Table 4.6.

Table 4.6 Correlations of Technical Barriers to Trade

Correlations

Technical barriers to trade includes voluntary standards and conformity

assessment procedures

.377**

.009

Institutional barriers to Kenya’s trade in the EAC is a technical barrier

to trade

.169

.263

Some Kenyan ministries, departments and parastatals have become

technical barriers to trade

-.059

.695

KRA is responsible for the enforcement and management of the

customs laws and the administration of common external tariffs hence

causing TBT

.060

.690

Kenya Plant Health Inspectorate Service inspects plants and issues a -.103

42

plant import permit .491

Kenya Bureau of Standards tests and grades the quality of goods and in

process causes barriers to trade

-.106

.484

Application of numerous certification and conformity assessments .032

.829

The rules of origin which stipulate that a good must wholly be produced

or contain imported content of no more than 40 percent of the cost,

insurance and freight value of the materials used in production

.305*

.037

The procedure for obtaining the certificate of origin is cumbersome and

lengthy, which itself is costly for the business community

.238

.111

The variations in the procedures for obtaining licenses and business

permits across countries

.039

.793

** Correlation is significant at the 0.01 level (2-tailed)

* Correlation is significant at the 0.05 level (2-tailed)

Table 4.6 shows that Technical Barriers to Trade are agreement deals with all technical

requirements, voluntary standards and conformity assessment procedures were a

significant technical barrier to trade (r=0.377, p<0.01). The rules of origin which stipulate

that a good must wholly be produced or contain imported content of no more than 40

percent of the cost, insurance and freight value of the materials used in production was a

significant technical barrier to trade (r=0.305, p<0.05).

The table however shows that, institutional barriers to Kenya’s trade in the EAC as one of

the categories of technical barriers to trade was an insignificant technical barrier to trade

(r=0.169, p>0.05). Various Kenyan ministries, departments and parastatals being the

institutional barriers to trade was an insignificant technical barrier to trade (r=0.059,

p>0.05). KRA being responsible for the enforcement and management of the customs

laws and the administration of common external tariffs hence causing TBT was an

insignificant technical barrier to trade (r=0.060, p>0.05). Kenya Plant Health Inspectorate

Service inspecting plants and issuing a plant import permit was an insignificant technical

barrier to trade (r=-0.103, p>0.05). Kenya Bureau of Standards testing and grading the

quality of goods and in process causing barriers to trade was an insignificant technical

barrier to trade (r=-0.106, p>0.05). Application of numerous certification and conformity

assessments was an insignificant technical barrier to trade (r=0.032, p>0.05). The

procedure for obtaining the certificate of origin being cumbersome and lengthy, which

itself is costly for the business community was an insignificant technical barrier to trade

(r=0.238, p>0.05). The variations in the procedures for obtaining licenses and business

permits across countries was an insignificant technical barrier to trade (r=0.039, p>0.05).

43

4.4.3 Regression Analysis for Technical Barriers to Trade

A regression analysis for TBT was computed and the results provided a model summary

for TBT barriers to trade. The results are summarized in Table 4.7.

Table 4.7 Regression Model Summary for TBT Barriers to Trade

Model R R Square Adjusted R Square Std. Error of the Estimate

1 .533 .285 .068 1.00549

a. Predictors (Constant): TBT Barriers to Trade

The regression model summary in Table 4.7 indicates that 6.8% of the variance in trade

barriers can be explained by TBT barriers of trade. These indicates that TBT barriers to

trade impact exporters by 6.8%, and the rest could be explained by other factors.

4.4.4 Regression Coefficients for NTB Barriers to Trade

A regression analysis for Technical Barriers to Trade factors were computed and the

results provided regression coefficients. The results are summarized in Table 4.8.

Table 4.8 Regression Coefficients for TBT Barriers to Trade Factors

Model

Unstandardized

Coefficients

Standardized

Coefficients

t

Sig. B Std. Error Beta

1 (Constant)

Conformity Assessment Process

Institutional Barriers

Government ministries

Customs Laws & External Tariffs

Plant Import Permit

Quality Tests for Products

Certification Assessments

Rules of Origin

Certification of Origin Process

Variation in Certification Process

1.744

.228

-.118

-.013

.063

-.206

-.068

-.057

.358

.162

-.069

.537

.194

.226

.025

.289

.182

.192

.242

.209

.191

.164

.227

-.118

-.100

.057

-.216

-.082

-.056

.388

.171

-.079

3.248

1.171

-.521

-.518

.218

-1.133

-.354

-.235

1.711

.846

-.419

.003

.250

.606

.608

.829

.266

.726

.815

.097

.404

.678

a. Dependent Variable: Barrier to Trade

44

The coefficients in Table 4.8 shows that conformity assessment process, institutional

barriers, government ministries, customs laws & external tariffs, plant import permit,

quality tests for products, certification assessments, rules of origin, certification of origin

process, and variation in certification process had an insignificant influence on trade

barrier since the precision level for all factors was >0.05 which was the study’s threshold.

4.5 Mitigating Factors for the Trade Barriers

This sub-section provides the results of mitigating factors’ rating, correlation and

regression analysis with regards to the response received. These results have been

presented in the form of tables.

4.5.1 Rating of Mitigating Factors on Trade Barriers

The study sought to examine the rating of the mitigating factors on non-tariff barriers and

technical tariff barriers to Trade to trade using the scale Strongly Agree, Agree, Neutral,

Disagree, and Strongly Disagree. The response received was as indicated in Table 4.9.

Table 4.9 Rating for Mitigating Factors on Trade Barriers

Hig

h

Mod

erate

Low

Not

Su

re

Not

at

All

Mea

n

Std

Dev

Use lessons to be borrowed

from the European Union (EU)

and Association of Southeast

Asian Nations (ASEAN) for

planning and minimizing

policy errors

38.6% 40.9% 13.6% 6.8% 0% 1.88 .894

Harmonizing product standards

and developing mutual

recognition of standards across

member countries

20% 53.3% 17.8% 6.7% 2.2% 2.80 4.673

Verification of information on

NTBs

31.8% 34.1% 22.7% 11.4% 0% 2.14 1.002

Prioritization of products 18.2% 45.5% 20.5% 13.6% 2.3% 2.36 1.014

Developing specific work

program

22.2% 42.2% 15.6% 13.3% 6.7% 2.40 1.175

Sector-based approach strategy

to be employed to deal with

issues in specific economic and

politic sectors

29.5% 27.3% 25% 9.1% 9.1% 2.41 1.263

Enhance exchange of

information and views on a

26.7% 35.6% 17.8% 20% 0% 2.31 1.083

45

range of active NTB

elimination programs/projects

Establish a communication

network between NTB focal

points

29.5% 27.3% 20.5% 20.5% 2.3% 2.38 1.185

Establishing appropriate

procedures for identifying and

eliminating NTBs

29.5% 38.6% 15.9% 13.6% 2.3% 2.20 1.091

Regular meetings by member

states to discuss of the NTBs to

be eliminated

34.9% 20.9% 23.3% 16.3% 4.7% 2.35 1.251

EAC should invest in One-

Stop-Centers and electronic

single window systems at

border stations

28.9% 37.8% 26.7% 6.7% 0% 2.11 .910

Review of port charges to

international levels

33.3% 35.6% 24.4% 6.7% 0% 2.04 .928

Designing effective

mechanisms for identifying

and verifying information

about NTBs

36.4% 29.5% 20.5% 11.4% 2.3% 2.14 1.112

Involve the general public in

the process of EAC integration

37.8% 29.5% 20.5% 11.4% 2.3% 2.08 1.183

Develop strategy for reducing

differences and capacity

constraints

37.8% 35.6% 17.8% 8.9% 0% 1.97 .965

Invest in infrastructure 45.5% 27.3% 15.9% 4.5% 6.8% 2.00 1.200

Apply the principle of

asymmetry and promote the

use of English

21.7% 47.8% 13% 13% 4.3% 2.30 1.092

Monitoring for new NTBs and

technical barriers (NTB/TB)

44.4% 20% 22.2% 8.9% 4.4% 2.08 1.202

Table 4.9 shows that use of lessons to be borrowed from the European Union (EU) and

Association of Southeast Asian Nations (ASEAN) for planning and minimizing policy

errors would mitigate trade barriers as shown by 38.6% who responded with high, 40.9%

stated moderate, 13.6% stated low, and 6.8% were not sure; the results had a mean of

1.88 and a standard deviation of 0.894. Harmonizing product standards and developing

mutual recognition of standards across member countries errors would mitigate trade

barriers as shown by 20% who responded with high, 53.3% stated moderate, 17.8% stated

low, 6.7% were not sure, and 2.2% stated not at all; the results had a mean of 2.80 and a

standard deviation of 4.673.

46

Verification of information on NTBs would mitigate trade barriers as shown by 31.8%

who responded with high, 34.1% stated moderate, 22.7% stated low, and 11.4% were not

sure; the results had a mean of 2.14 and a standard deviation of 1.002. Prioritization of

products would mitigate trade barriers as shown by 18.2% who responded with high,

45.5% stated moderate, 20.5% stated low, 13.6% were not sure, and 2.3% stated not at

all; the results had a mean of 2.36 and a standard deviation of 1.014. Developing specific

work program would mitigate trade barriers as shown by 22.2% who responded with

high, 42.2% stated moderate, 15.6% stated low, 13.3% were not sure, and 6.7% stated not

at all; the results had a mean of 2.40 and a standard deviation of 1.175. Sector-based

approach strategy to be employed to deal with issues in specific economic and politic

sectors would mitigate trade barriers as shown by 29.5% who responded with high, 27.3%

stated moderate, 25% stated low, 9.1% were not sure, and another 9.1% stated not at all;

the results had a mean of 2.41 and a standard deviation of 1.263.

Enhance exchange of information and views on a range of active NTB elimination

programs/projects would mitigate trade barriers as shown by 26.7% who responded with

high, 35.6% stated moderate, 17.8% stated low, and 20% were not sure; the results had a

mean of 2.31 and a standard deviation of 1.083. Establishing a communication network

between NTB focal points would mitigate trade barriers as shown by 29.5% who

responded with high, 27.3% stated moderate, 20.5% stated low, another 20.5% were not

sure, and 2.3% stated not at all; the results had a mean of 2.38 and a standard deviation of

1.185. Establishing appropriate procedures for identifying and eliminating NTBs would

mitigate trade barriers as shown by 29.5% who responded with high, 38.6% stated

moderate, 15.9% stated low, 13.6% were not sure, and 2.3% stated not at all; the results

had a mean of 2.20 and a standard deviation of 1.091.

Regular meetings by member states to discuss of the NTBs to be eliminated would

mitigate trade barriers as shown by 34.9% who responded with high, 20.9% stated

moderate, 23.3% stated low, 16.3% were not sure, and 4.7% stated not at all; the results

had a mean of 2.35 and a standard deviation of 1.251. EAC investing in One-Stop-

Centers and electronic single window systems at border stations would mitigate trade

barriers as shown by 28.9% who responded with high, 37.8% stated moderate, 26.7%

stated low, and 6.7% were not sure; the results had a mean of 2.11 and a standard

deviation of 0.910. Reviewing of port charges to international levels would mitigate trade

47

barriers as shown by 33.3% who responded with high, 35.6% stated moderate, 24.4%

stated low, and 6.7% were not sure; the results had a mean of 2.04 and a standard

deviation of 0.928.

Designing effective mechanisms for identifying and verifying information about NTBs

would mitigate trade barriers as shown by 36.4% who responded with high, 29.5% stated

moderate, 20.5% stated low, 11.4% were not sure, and 2.3% stated not at all; the results

had a mean of 2.14 and a standard deviation of 1.112. Involving the general public in the

process of EAC integration would mitigate trade barriers as shown by 37.8% who

responded with high, 29.5% stated moderate, 20.5% stated low, 11.4% were not sure, and

2.3% stated not at all; the results had a mean of 2.08 and a standard deviation of 1.183.

Developing strategy for reducing differences and capacity constraints would mitigate

trade barriers as shown by 37.8% who responded with high, 35.6% stated moderate,

17.8% stated low, and 8.9% were not sure; the results had a mean of 1.97 and a standard

deviation of 0.965.

Investing in infrastructure would mitigate trade barriers as shown by 45.5% who

responded with high, 27.3% stated moderate, 15.9% stated low, 4.5% were not sure, and

6.8% stated not at all; the results had a mean of 2.00 and a standard deviation of 1.200.

Applying the principle of asymmetry and promote the use of English would mitigate trade

barriers as shown by 21.7% who responded with high, 47.8% stated moderate, 13% stated

low, 13% were not sure, and 4.3% stated not at all; the results had a mean of 2.30 and a

standard deviation of 1.092. Monitoring for new NTBs and technical barriers (NTB/TB)

would mitigate trade barriers as shown by 44.4% who responded with high, 20% stated

moderate, 22.2% stated low, 8.9% were not sure, and 4.4% stated not at all; the results

had a mean of 2.08 and a standard deviation of 1.202.

4.5.2 Correlations of Mitigating Factors for Trade Barriers

A correlation test was carried out to determine the significance of the various mitigating

factors on non-tariff barriers and technical tariff barriers that would affect exporters. A P

value of less or equal to 0.01 and/or 0.05 indicated that the particular factor was

significant as a barrier. The results are summarized in Table 4.10.

48

Table 4.10 Correlations of Mitigating Factors for Trade Barriers

Correlations

Lessons to be borrowed from the European Union (EU) and Association

of Southeast Asian Nations (ASEAN) for planning and minimizing

policy errors

.429**

.000

Harmonizing product standards and developing mutual recognition of

standards across member countries

-.059

.702

Verification of information on NTBs .381*

.011

Prioritization of products .252

.099

Developing specific work program .154

.318

Sector-based approach strategy to be employed to deal with issues in

specific economic and politic sectors

.124

.421

Enhance exchange of information and views on a range of active NTB

elimination programs/projects

.250

.102

Establish a communication network between NTB focal points .349*

.020

Establishing appropriate procedures for identifying and eliminating

NTBs

.516**

.000

Regular meetings by member states to discuss of the NTBs to be

eliminated

.238

.125

EAC should invest in One-Stop-Centers and electronic single window

systems at border stations

.413**

.005

Member states should review of port charges to international levels and

political goodwill to facilitate cross-border movement of people

.283

.062

Designing effective mechanisms for identifying and verifying

information about NTBs

.390**

.009

Involve the general public in the process of EAC integration .466**

.001

Develop strategy for reducing differences and capacity constraints .372*

.013

Invest in infrastructure .197

.206

Apply the principle of asymmetry and promote the use of English .503**

.001

Monitoring for new NTBs and technical barriers (NTB/TB) .400**

.007

** Correlation is significant at the 0.01 level (2-tailed)

* Correlation is significant at the 0.05 level (2-tailed)

Table 4.10 shows that use of lessons to be borrowed from the European Union (EU) and

Association of Southeast Asian Nations (ASEAN) for planning and minimizing policy

errors would be a significant mitigating strategy to trade barriers (r=0.429, p<0.01).

Verification of information on NTBs would be a significant mitigating strategy to trade

barriers (r=0.381, p<0.05). Establishing a communication network between NTB focal

49

points would be a significant mitigating strategy to trade barriers (r=0.349, p<0.05).

Establishing appropriate procedures for identifying and eliminating NTBs would be a

significant mitigating strategy to trade barriers (r=0.516, p<0.01).

EAC investing in One-Stop-Centers and electronic single window systems at border

stations would be a significant mitigating strategy to trade barriers (r=0.413, p<0.01).

Designing effective mechanisms for identifying and verifying information about NTBs

would be a significant mitigating strategy to trade barriers (r=0.390, p<0.01). Involving

the general public in the process of EAC integration would be a significant mitigating

strategy to trade barriers (r=0.466, p<0.01). Developing strategy for reducing differences

and capacity constraints would be a significant mitigating strategy to trade barriers

(r=0.372, p<0.01). Applying the principle of asymmetry and promote the use of English

would be a significant mitigating strategy to trade barriers (r=0.503, p<0.01). Monitoring

for new NTBs and technical barriers (NTB/TB) would be a significant mitigating strategy

to trade barriers (r=0.400, p<0.01).

Harmonizing product standards and developing mutual recognition of standards across

member countries would be an insignificant mitigating strategy to trade barriers (r=-

0.059, p>0.05). Prioritization of products would be an insignificant mitigating strategy to

trade barriers (r=0.252, p>0.05). Developing specific work program would be an

insignificant mitigating strategy to trade barriers (r=0.154, p>0.05). Sector-based

approach strategy to be employed to deal with issues in specific economic and politic

sectors would be an insignificant mitigating strategy to trade barriers (r=0.124, p>0.05).

Enhancing exchange of information and views on a range of active NTB elimination

programs/projects would be an insignificant mitigating strategy to trade barriers (r=0.250,

p>0.05). Member states meeting a couple of times per year and discuss of the NTBs to be

eliminated would be an insignificant mitigating strategy to trade barriers (r=0.238,

p>0.05). Member states reviewing of port charges to international levels and political

goodwill to facilitate cross-border movement of people would be an insignificant

mitigating strategy to trade barriers (r=0.283, p>0.05). Investing in infrastructure would

be an insignificant mitigating strategy to trade barriers (r=0.197, p>0.05).

50

4.5.3 Regression Analysis for Mitigating Factors to Trade Barriers

A regression analysis for mitigating factors to trade barriers was computed and the results

provided a model summary for mitigating factors for trade barriers. The results are

summarized in Table 4.11.

Table 4.11 Regression Model Summary for Mitigating Factors for Trade Barriers

Model R R Square Adjusted R Square Std. Error of the Estimate

1 .778 .605 .421 .90712

a. Predictors (Constant): Mitigating Factors for Trade Barriers

The regression model summary in Table 4.11 indicates that 42.1% of the variance in trade

barriers can be explained by the mitigating factors for trade barriers. This indicates that

mitigating factors for trade barriers would impact exporters by 42.1%, and the rest could

be explained by other factors.

4.5.4 Regression Coefficients for Mitigating Factors for Trade Barriers

A regression analysis for mitigating factors to trade barriers were computed and the

results provided regression coefficients. The results are summarized in Table 4.12.

Table 4.12 Regression Coefficients for Mitigating Factors for Trade Barriers

Model

Unstandardized

Coefficients

Standardized

Coefficients

T

Sig. B Std. Error Beta

1 (Constant)

Use of Borrowed Lessons

Harmonizing Product Standards

Information Verification

Prioritization of Products

Sector-based Approach Strategy

Regular Meetings by Members

Investment of One-Stop-Centers

Review of Port Charges

General Public Involvement

Reducing Capacity Constraints

Infrastructure Improvement

Asymmetry Application

Monitoring NTB and TBTs

-.331

-.052

.009

.395

.009

.017

.455

.233

-.150

.135

.072

.128

-.155

.169

.548

.253

.041

.201

.235

.164

.146

.287

.235

.201

.245

.170

.207

.220

-.039

.037

.332

.008

.019

.473

.179

-.119

.138

.059

.131

-.142

.174

-.603

-.205

.226

1.964

.039

.107

3.123

.812

-.637

.673

.295

.752

-.747

.766

.551

.839

.823

.060

.969

.916

.004

.424

.529

.506

.770

.458

.461

.450

a. Dependent Variable: Barrier to Trade

51

The coefficients in Table 4.12 shows that regular meetings by members had a positive

significant influence on trade barrier since its precision level was <0.05. The table shows

that use of borrowed lessons, harmonizing product standards, information verification,

prioritization of products, sector-based approach strategy, investment of one-stop-centers,

review of port charges, general public involvement, reducing capacity constraints,

infrastructure improvement, asymmetry application, and monitoring NTB and had an

insignificant influence on trade barrier since the precision level for all factors was >0.05

which was the study’s threshold.

4.6 Chapter Summary

The chapter has presented the findings of the study. Correlation analysis has been used to

determine the relationship between the study variables. Brief explanations have been

given before or after the tables and figures that describe the meaning of the numbers

presented within the figures and tables. The next chapter provides the summary of the

findings followed by discussions based on the objectives, the conclusion and finally

recommendations.

52

CHAPTER FIVE

5.0 DISCUSSIONS, CONCLUSIONS, AND RECOMMENDATIONS

5.1 Introduction

This chapter concludes the study. The chapter gives the conclusions in various sections

that address the summary of findings; discussions; conclusions; and recommendations

both for improvement and for further studies.

5.2 Summary of Findings

The purpose of the study was to investigate the effects of non-tariff and technical barriers

to trade on the Kenyan exporters within the East African Community. Non-tariff and

technical barriers continues to hinder inter-country trade within the East African

Community and this study sought to highlight the effects of the barriers to Kenyan

exporters. The study was guided by the following research questions: What are the non-

tariff barriers faced by Kenyan exporters within the East African Community? What are

the technical barriers to trade affecting the Kenyan exporters within East African

Community? What are the mitigating factors on non-tariff barriers and technical barriers

to trade?

Explanatory research design to clearly articulate the various technical and non-tariff trade

barriers that hinder trade within EAC within particular emphasis on barriers that hindered

Kenyan exporters in EAC. The study assumed a random sampling technique in getting a

representative sample size of 121 individuals from automobile, manufacturing and

agricultural population. Questionnaires were the main data collection instrument that

were used by the researcher. Descriptive analysis was used in the data analysis and

reporting of results.

Documentation and procedures, too many agencies involved in overall export inspection

and certification in the region, escort of all sensitive and hazardous products through the

territory of each EAC transit country, verification of transit cargo, lack of harmonization

in working hours at the border posts, delays at weighbridges, multiple police road blocks

and mobile control, prohibition on transportation of locally produced goods, East Africa

community transit licenses for goods, truck entrance fees and grace period, business

registration, use of immigration and visa procedures, poor information dissemination

53

across the East Africa community, language barrier, and insecurity/ highway crimes/loss

of goods at the container freight stations were all non-tariff barriers to trade in EAC.

Technical Barriers to Trade are agreement deals with all technical requirements,

voluntary standards and conformity assessment procedures. The study showed that

exporters in Kenya faced institutional barriers to Kenya’s trade in the EAC. The study

showed that various Kenyan ministries, departments and parastatals were the institutional

barriers to trade, and that KRA was responsible for the enforcement and management of

the customs laws and the administration of common external tariffs hence causing TBT.

The study showed that application of numerous certification and conformity assessments,

and the procedure for obtaining the certificate of origin being cumbersome and lengthy

were a barrier to trade.

Some mitigation procedures for minimizing the impact of trade barriers would include:

harmonizing product standards and developing mutual recognition of standards across

member countries, carrying out verification of information on NTBs, prioritizing

products, developing specific work programs, and carrying out a sector-based approach

strategy that deals with issues in specific economic and politic sectors. Other mitigation

strategies would include: enhancing exchange of information and views on a range of

active NTB elimination programs/projects, establishing a communication network

between NTB focal points, and establishing appropriate procedures for identifying and

eliminating NTBs.

5.3 Discussions

5.3.1 Non-Tariff Barriers on Trade (NTBs)

Documentation and procedures was still a trade barrier. These results are similar to World

Bank (2008), several sessions, forums and meetings have been undertaken by the EAC

Council of Ministers with the aim of simplifying and synchronizing customs

documentation, formalities and procedures at the border posts. Little of this has been

translated into action.

Too many agencies were involved in overall export inspection and certification in the

region. These results are similar to Beghin (2006), the point agreed by most of the EAC

member governments is that there are too many agencies involved in overall export

54

inspection and certification in the region, stretching the administrative capacity and

resource needs.

Verification of transit cargo was a trade barrier. These results are similar to Ihiga (2007),

a lot of transit cargo is scanned and verified by the revenues authorities, like the Kenya

Revenue Authority and the Rwanda Revenue Authority, though it is not for use in the

member country concerned. The goods destined for the member country in many cases

are subject to 100 percent physical inspection, particularly where they involve refund or

drawback claims, regardless of the compliance record of the exporter.

Lack of harmonization in working hours at the border posts was a trade barrier. These

results are similar to Ihiga (2007), there is lack of harmonization in terms of the agreed

working hours at the intra-EAC borders. World Bank (2008), a crucial partner in the 24-

hour operation, has not yet been adopted due to work force and budget constraints.

Delays at weighbridges were a barrier to trade. These results are similar to Ihiga (2007),

the mandatory weighbridges for goods all along the transit route, and not only at the

border, impede trade through addition to transit time and cost of transporter upkeep.

These are particularly significant on the Kenyan and Tanzanian sides of the transport

corridors.

Multiple police road blocks and mobile control was a trade barrier. These results are

similar to EABC (2004), unrelated with weighing or clearing the cargo, police roadblocks

are constantly cited by traders and transporters as location for rent seeking and transit

delays. World Bank (2008), what bothers transporters is that there is a general lack of

coordination among the police in carrying out their duties, such that a truck is subject to

similar checks at all traffic stops. This creates room for the police to openly press for

petty bribes.

Prohibition on transportation of locally produced goods was a barrier to trade. These

results are similar to EABC (2009), transit goods license issued for a truck allows the

truck only to route goods through boarders, but it prohibits transportation of locally

produced goods from Kenya/Rwanda as exports and transportation of goods from another

EAC member into Kenya/Rwanda as imports.

55

The study showed that truck entrance fees and grace period was a barrier to trade. These

results are similar to EABC (2009), the EAC transit regulations allow a grace period of

seven days without payment of fees for vehicles entering the territory of a member state,

but compliance varies across member states and across time periods.

Business registration was a barrier to trade. These results are similar to EABC (2009)

treatment of businesses originating in the EAC as “foreign” and different national

procedures make cross-border registration of business branches difficult. Payment for

registration of business names and the multiplicity of licenses for production,

distribution/sale of goods among the five EAC countries is cumbersome.

Use of immigration and visa procedures was a barrier to trade. These results are similar to

EABC (2008), there are cumbersome, duplicative, and in many instances used contrary to

the EAC Protocol. EAC-wide, visa fees was removed in June 2007 and replaced by

temporary work permits for visitors seeking temporary work assignments. These do not

apply to traders, transporters, and visitors who are not seeking temporary employment. At

the border, officials at Namanga, Tanzania not only charge each truck USDD50, but also

impose a charge of USD100 as work permit for accompanying businesspersons who

would like to exhibit their products in Tanzania (EABC, 2008).

There is poor information dissemination across the East Africa Community. These results

are similar to Okumu (2010), not only are the rules and regulations not mutually

recognized or harmonized, but the dissemination of information on them is extremely

poor across member states and within them. Traders are not aware of some of the

decisions made at the EAC Council, such as the new transit regulations. At the borders,

the customs agents often do not have the latest directives and/or forms from their revenue

authorities, and truck drivers may not know the regulations specific to their cargo.

Language barrier was a barrier to trade. These results are similar to Mutambara (2009),

language of communication is yet another non-tariff barrier recognized by Burundian

traders and trucks that travel in Uganda, Tanzania, and Kenya. Traders face specific

charges. For instance, those who export goods to francophone Burundi from Kenya pay a

USD300 fee to translate the required regulations to English at Jomo Kenyatta

International Airport (JKIA) in Nairobi.

56

Insecurity/ highway crimes/loss of goods at the container freight stations was a trade

barrier. These results are similar to EABC (2005), heightened security concerns along the

trade routes and highway thefts add to concerns for traders and transporters. Along the

Ugandan segment of the Northern Corridor, transporters who make night runs complain

about acts of banditry. Ayoki (2007) also points out that, operation of the CFSs at various

locations is affected by pilferage of cargo. Exporters end up losing their goods and are

often unable to lodge claims because they do not know whose responsibility it is to pay

for the claims.

5.3.2 Technical Barriers to Trade

Technical barriers to trade are agreement deals with all technical requirements, voluntary

standards and conformity assessment procedures. These results are similar to Kee, Looi,

Nicita and Olarreaga (2006) Technical Barriers to Trade (TBT) are agreement deals with

all technical requirements, voluntary standards and conformity assessment procedures.

Various Kenyan ministries, departments and parastatals are the institutional barriers to

trade. These results are similar to Kenya Revenue Authority (2004), various Kenyan

ministries, departments and parastatals regulate the country’s trade, including the

Ministries of Trade, Finance, Justice and Constitutional Affairs, Public Health and

Immigration. These hindrances occur because of the setting of product standards,

technical regulations and conformity assessment procedures that constitute technical

barriers to trade.

KRA is responsible for the enforcement and management of the customs laws and the

administration of common external tariffs hence causing TBT. These results are similar to

Kenya Revenue Authority (2004), the KRA has the most significant impact on

intraregional trade. It is responsible for the enforcement and management of the customs

laws and the administration of common external tariffs. Additionally, the clearance of

goods by the KRA takes time because of the lack of harmonized import/ export

documentation and procedures.

Kenya Plant Health Inspectorate Service inspects plants and issues a plant import permit.

These results are similar to Mold (2005), other important agencies that affect the EAC’s

trade in Kenya include KEPHIS, which inspects plants and issues a plant import permit.

57

All these agencies operate independently of each other, without much coordination

(thereby occasioning delays). In addition, most of them do not operate 24 hours a day.

Kenya Bureau of Standards tests and grades the quality of goods and in process causes

barriers to trade. These results are similar to Mold (2005), KEBS, which tests and grades

the quality of goods operates independently, without much coordination (thereby

occasioning delays).

Application of numerous certification and conformity assessments was a barrier trade.

These results are similar to World Bank (2007) EAC member countries apply numerous

certification and conformity assessments to ensure technical quality standards in intra-

EAC trade. However, there are differences in product standards and agencies that are

accredited to undertake the standardization procedures. Some agencies accredited to

conduct standardization in one country are not recognized by officers in another country -

a problem that adds to the cost of conducting certification and wastes time.

Rules of origin which stipulate that a good must wholly be produced or contain imported

content of no more than 40 percent of the cost, insurance and freight value of the

materials used in production. These results are similar to World Bank (2009), rules of

origin that stipulate that a good must wholly be produced or contain imported content of

no more than 40 percent of the cost, insurance and freight value of the materials used in

production has a cumbersome and lengthy process, which itself is costly for the business

community.

Procedure for obtaining the certificate of origin is cumbersome and lengthy, which itself

is costly for the business community. These results are similar to World Bank (2009), the

procedure for obtaining the certificate of origin is cumbersome and lengthy, which itself

is costly for the business community.

Variations in the procedures for obtaining licenses and business permits across countries

was a barrier. These results are similar to World Bank (2007) the procedures for obtaining

these various licenses vary across countries. In addition, there is a lack of preferential

treatment to EAC-originating businesses makes cross-border registration of businesses a

difficult, cumbersome and expensive process.

58

5.3.3 Mitigating Factors on Non-Tariff barriers and Technical Tariff Barriers

Lessons to be borrowed from the European Union (EU) and Association of Southeast

Asian Nations (ASEAN) for planning and minimizing policy errors would mitigate

barriers. These results are similar to Fliess and Lejarraga (2005), lessons are borrowed

from the European Union (EU) and Association of Southeast Asian Nations (ASEAN),

since they contain a number of lessons that can help EAC plan well and minimize policy

errors.

Harmonizing product standards and developing mutual recognition of standards across

member countries would mitigate barriers. These results are similar to Fliess and

Lejarraga (2005), the ASEAN strategy involving the establishment of a modality for

eliminating NTBs including harmonizing product standards and developing mutual

recognition of standards across member countries would increase trade.

Verification of information, prioritization of products, and developing specific work

program would mitigate barriers. These results are similar to ASEAN Secretariat (2010),

the general features of the process for eliminating NTBs consists of verification of

information on NTBs, prioritization of products, developing specific work programme

and obtaining a mandate from the ASEAN Economic Ministers to implement a work

programme.

Sector-based approach strategy to be employed to deal with issues in specific economic

and politic sectors. These results are similar to ASEAN Secretariat (2010), major

characteristic that distinguishes the ASEAN experience from that of the EU in dealing

with NTBs is its sector-based approach. In this strategy, ASEAN has focused its

economic integration and elimination of trade barriers on a few sectors (chosen among

sectors with the highest potential for intra-regional trade and integration).

Enhancing exchange of information and views on a range of active NTB elimination

programs/projects would mitigate barriers. These results are similar to World Bank

(2008), ongoing activities for elimination of NTBs include a review of national NTBs

reports, national procedures for inter-ministry co-operation on NTBs, exchange of

information and views on a range of active NTB elimination programmes/projects and

establishing a communication network between NTB focal points.

59

Establishing a communication network between NTB focal points would mitigate

barriers. Establishing appropriate procedures for identifying and eliminating NTBs would

mitigate barriers. These results are similar to World Bank (2008), establishing appropriate

procedures for identifying and eliminating NTBs, and procedures to have high level

commitment and support and visibility ASEAN (2010).

Regular meetings between member states to discuss of the NTBs to be eliminated would

mitigate barriers. These results are similar to World Bank (2008), member states

commitment to provide the framework for continued work on NTBs, meet a couple of

times per year, otherwise communicating by telephone and e-mail, identify NTBs on a

continuous basis, prepare the respective annual reports on NTBs, consider the formation

in each country of a national inter-ministry/agency communication network chaired by a

high-level official from EU Secretariat.

EAC investing in One-Stop-Centers and electronic single window systems at border

stations, and member states reviewing of port charges to international levels and political

goodwill to facilitate cross-border movement of people would mitigate barriers. These

results are similar to World Bank (2008), the programme of investment in One-Stop-

Centers and electronic single window systems at border stations, review of port charges to

international levels, political goodwill to facilitate cross-border movement of people

while waiting for finalization of relevant protocol, mutually recognize inspection

procedures, and inspection reports and certificates, clear guidelines for stopping

commercial vehicles, a daily record of vehicles stopped, reasons and measures taken,

joint verification of goods at border posts, infrastructure improvement, cancellation of

transit bonds, investment in parking sheds and parking yards, lifting restrictions of truck

haulage, expand working hours.

Designing effective mechanisms for identifying and verifying information about NTBs

would mitigate barriers. These results are similar to Abegaz (2008), one of the key steps

to take is to design effective mechanisms for identifying and verifying information about

NTBs, and prioritizing and ensuring their elimination. This will require giving the EAC

Secretariat the mandate to compel individual countries to eliminate any identified NTB

and to ensure that no new ones are created.

60

Involving the general public in the process of EAC integration would mitigate barriers.

These results are similar to Hangi (2010), the full involvement of the private sector

associations and civil society organizations should intensify public awareness campaigns

about customs union and its economic opportunities. Every effort should be made to

reach out to the entire population of the EAC countries.

Developing strategy for reducing differences and capacity constraints would mitigate

barriers. These results are similar to Beghin, (2006), one way forward for developing a

strategy for reducing/removing NTBs given national differences and capacity constraints

is to adopt a product/sector view in a phased manner.

Investing in infrastructure would mitigate barriers. These results are similar to Hangi

(2010), government monopolies and/or fiscal constraints have given rise to severe

infrastructure constraints, the related NTBs will need prior large-scale investments and

long-term interventions in expansion/rehabilitation of physical infrastructure in a

coordinated manner, thus, improvement of infrastructure is fundamental to lowering costs

of business and facilitating efficiency in production, transportation and delivery of goods

and services.

Applying the principle of asymmetry and promote the use of English would mitigate

barriers. These results are similar to Stephen, Karingi, Fekadu and Belay (2009) states

that, as EAC explores a program to achieve the common market, they recommend putting

in place a policy to mitigate the effects of the completion of the internal market on

relatively disadvantaged member states.

Monitoring for new NTBs and technical barriers (NTB/TB) would mitigate barriers.

These results are similar to World Bank (2008), the monitoring for new NTBs and

Technical barriers that may be imposed by member states, the EAC could learn from the

EU’s adoption of preventive measures which oblige member states to notify all draft

regulations and standards related to technical specifications to be introduced on national

territories. In this way, the Commission is able to monitor and prevent the raise of new

national barriers to intra-EU trade.

61

5.4 Conclusions

5.4.1 Non-Tariff Barriers on Trade (NTBs)

Documentation and procedures, too many agencies involved in overall export inspection

and certification in the region, escort of all sensitive and hazardous products through the

territory of each EAC transit country, verification of transit cargo, lack of harmonization

in working hours at the border posts, delays at weighbridges, multiple police road blocks

and mobile control, prohibition on transportation of locally produced goods, East Africa

community transit licenses for goods, truck entrance fees and grace period, business

registration, use of immigration and visa procedures, poor information dissemination

across the East Africa community, language barrier, and insecurity/ highway crimes/loss

of goods at the container freight stations were all non-tariff barriers to trade in EAC.

5.4.2 Technical Barriers to Trade

Technical barriers to trade are agreement deals with all technical requirements, voluntary

standards and conformity assessment procedures. The study concludes that exporters in

Kenya faced institutional barriers to Kenya’s trade in the EAC. The study therefore

concludes that various Kenyan ministries, departments and parastatals were the

institutional barriers to trade, and that KRA was responsible for the enforcement and

management of the customs laws and the administration of common external tariffs hence

causing TBT. The application of numerous certification and conformity assessments, and

the procedure for obtaining the certificate of origin being cumbersome and lengthy are a

barrier to trade.

5.4.3 Mitigating Factors on Non-Tariff barriers and Technical Tariff Barriers

Some mitigation procedures for minimizing the impact of trade barriers would include:

harmonizing product standards and developing mutual recognition of standards across

member countries, carrying out verification of information on NTBs, prioritizing

products, developing specific work programs, and carrying out a sector-based approach

strategy that deals with issues in specific economic and politic sectors. Other mitigation

strategies would include: enhancing exchange of information and views on a range of

active NTB elimination programs/projects, establishing a communication network

between NTB focal points, and establishing appropriate procedures for identifying and

eliminating NTBs.

62

5.5 Recommendations

5.5.1 Recommendations for Improvement

5.5.1.1 Non-Tariff Barriers on Trade (NTBs)

The study recommends that the consultation process between all stakeholders in the

export business be enhanced by involving the trading community at the drafting stage of

customs laws, regulations and trading procedures. The parties should ensure that all input

offered is taken into consideration in international consultations.

5.5.1.2 Technical Barriers to Trade

National technical and standard bodies and involved parties often have insufficient

capacity to participate actively in standardization activities. The study therefore

recommends that more effort is put by all border organizations in order to fully align

structure, rules, procedures and operations with international and good practice.

Responsibilities for transposing technical regulations should be clearly defined for all

involved parties and responsible ministries should ensure that new technical regulations

are properly enforced by co-operating with market surveillance authorities.

5.5.1.3 Mitigating Factors on Non-Tariff barriers and Technical Tariff Barriers

The study recommends that existing advance ruling mechanisms in various boarders and

countries be classified according to the national customs tariff and verification of the

origin of goods declared for preferential treatment. All parties could also introduce an

advance ruling mechanism to provide information on the method that will be applied for

customs valuation.

5.5.2 Recommendations for Further Studies

This study focused on investigating the effects of non-tariff and technical barriers to trade

on the Kenyan exporters within East African Community. The study recommends that

similar studies be carried out in neighboring countries like Uganda, Tanzania, and

Rwanda so as to have a better understanding of the trade barriers that exporters from the

EAC region face, and this will help policy makers formulate better recommendations.

63

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69

APPENDICES

APPENDIX A: TIME SCHEDULE

Week

1

Week

2

Week

3

Week

4

Week

5

Week

6

Week

7

Week

8

Week

9

Proposal

writing

Data

collection

Data Entry

Data

analysis

Report

writing

Presentation

Binding and

production

70

APPENDIX B: BUDGET

Cost (items) Cost (Kenya

Shillings)

Proposal development- Printing and stationery 8,000

Data collection 1) Stationery and printing

2) Transport expenses

8,000

7,000

Data analysis and report 1)Printing and stationery

2) Transport

8,000

7,000

Miscellaneous 4,000

TOTAL BUDGET 42,000

71

APPENDIX C: COVER LETTER

ANYAL MICHAEL OKUTE

UNITED STATES INTERNATIONAL UNIVERSITY-AFRICA

P.O. BOX 14634, 00800.

NAIROBI

Dear Respondent,

I am carrying out research on the Technical and Non- Tariff trade barriers on the Kenyan

exporters within the East African Community. This study is a requirement for the partial

fulfillment of the Master in Business Administration in International Business (MBA)

program at the United States International University Africa (USIU-AFRICA). The

purpose of this study is to investigate the various non-tariff and technical barriers to trade

and the effects they have the Kenyan exporters within East African Community.

This study uses various stakeholders who are in the exportation business within the East

African Community, the case study from which you have been selected as one of the

lucky respondent.

This is an academic research and confidentiality is strictly emphasized, your name will

not appear anywhere in the report. Kindly spare some time to complete the questionnaire

attached.

Thank you in advance,

Yours sincerely

Anyal Michael Okute

72

APPENDIX D: SAMPLE QUESTIONNAIRE

PART I: GENERAL INFORMATION

Kindly answer all the questions either by ticking in the boxes or writing in the spaces

provided.

1. Nature of your business

Automobile

Manufacturing

Agricultural

2. Length of exporting within the EAC region

Less than 2 years

6-8 years

3-5 years

9 years and over

3. Do you encounter any trade barriers in your area of trade?

Yes No

73

Section B: Non-Tariff Barriers on Trade (NTBs)

On a scale of: (1) Strongly Agree, (2) Agree, (3) Neutral (4) Disagree and (5) Strongly

Disagree; Please tick the numeric value corresponding to your personal opinion for each

statement.

1.S

tron

gly

Agre

e

2.A

gre

e

3.N

eutr

al

4.D

isagre

e

5.S

tron

gly

Dis

agre

e

1. Documentation and Procedures

2. Too many agencies involved in overall export

inspection and certification in the region

3. Escort of all sensitive and hazardous products

through the territory of each EAC transit country

4. Verification of transit cargo

5. Lack of harmonization in working hours at the

border posts

6. Delays at weighbridges

7. Multiple police road blocks and mobile control

8. Prohibition on transportation of locally produced

goods

9. East Africa Community transit licenses for goods

10. Truck entrance fees and grace period

11. Business registration

12. Use of immigration and visa procedures

13. Poor information dissemination across the East

Africa Community

14. Language barrier

15. Insecurity/ highway crimes/loss of goods at the

container freight stations

What other Non-Tariff Barriers and Technical Barriers to Trade you are aware of?---------

------------------------------------------------------------------------------------------------------------

------------------------------------------------------------------------------------------------------------

------------------------------------------------------------------------------------------------------------

74

C: Technical Barriers to Trade (TBT)

On a scale of: (1) Strongly Agree, (2) Agree, (3) Neutral (4) Disagree and (5) Strongly

Disagree; Please tick the numeric value corresponding to your personal opinion for each

statement.

1.S

tron

gly

Agre

e

2.A

gre

e

3.N

eutr

al

4.D

isagre

e

5.S

tron

gly

Dis

agre

e

1. Technical Barriers to Trade (TBT) are agreement

deals with all technical requirements, voluntary

standards and conformity assessment procedures

2. Institutional barriers to Kenya’s trade in the EAC is

one of the categories of technical barriers to trade

3. Various Kenyan ministries, departments and

parastatals are the institutional barriers to trade

4. KRA is responsible for the enforcement and

management of the customs laws and the

administration of common external tariffs hence

causing TBT

5. Kenya Plant Health Inspectorate Service

(KEPHIS) inspects plants and issues a plant import

permit

6. Kenya Bureau of Standards (KEBS) tests and

grades the quality of goods and in process causes

barriers to trade

7. Kenya Ports Authority (KPA) manages port

charges

8. Regulatory Barriers to Trade is the second category

of technical barriers to trade

9. Customs Clearance is one of the regulatory barriers

to trade in EAC

10. Application of numerous certification and

conformity assessments

11. The rules of origin which stipulate that a good must

wholly be produced or contain imported content of

no more than 40 percent of the cost, insurance and

freight value of the materials used in production

12. The procedure for obtaining the certificate of origin

is cumbersome and lengthy, which itself is costly for

the business community

13. The variations in the procedures for obtaining

licenses and business permits across countries

What other technical barriers to trade your experience?------------------------------------------

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75

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Section D: Mitigating factors on Non Tariff barriers and Technical Tariff Barriers

(NTBs /TBTs)

1.H

igh

2.M

od

erate

3.L

ow

4.N

ot

Su

re

5.N

ot

at

all

1. Lessons to be borrowed from the European Union

(EU) and Association of Southeast Asian Nations

(ASEAN) for planning and minimizing policy errors

2. Harmonizing product standards and developing

mutual recognition of standards across member

countries

3. Verification of information on NTBs

4. Prioritization of products

5. Developing specific work program

6. Sector-based approach strategy to be employed to

deal with issues in specific economic and politic

sectors

7. Enhance exchange of information and views on a

range of active NTB elimination programs/projects

8. Establish a communication network between NTB

focal points

9. Establishing appropriate procedures for identifying

and eliminating NTBs

10. Member states to meet a couple of times per year and

discuss of the NTBs to be eliminated

11. EAC should invest in One-Stop-Centers and

electronic single window systems at border stations

12. Member states should review of port charges to

international levels and political goodwill to facilitate

76

On a scale of: (1) High, (2) Moderate, (3) Low (4) Not Sure and (5) Not at all; Please

indicate the level at which the below factors can mitigate NTBs and TBTs

What other mitigating factors can be applicable?--------------------------------------------------

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THANK YOU FOR TAKING YOUR TIME TO COMPLETE THE QUESTIONNAIRE

cross-border movement of people

13. Designing effective mechanisms for identifying and

verifying information about NTBs

14. Involve the general public in the process of EAC

integration

15. Develop strategy for reducing differences and capacity

constraints

16. Invest in infrastructure

17. Apply the principle of asymmetry and promote the use

of English

18. Monitoring for new NTBs and technical barriers

(NTB/TB)