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Africa Trade Training Program 2014 by the Australian Government
MINISTERIAL BRIEF ON TRADE FACILITATION FOR THE
NORTHERN CORRIDOR TRADE ROUTE
PRESENTED
By
WELDON KORIR
Senior Economist (Policy)
Kenya Ports Authority
Corporate Development Department
July –October 2014
South Australia

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Africa Trade Training Program 2014 by the Australian Government
Table of Contents
1. OBJECTIVE …………………………………………………………….4
2. BACKGROUND …………………………………………………….……..4
3. MARKET COMPOSITION AND POTENTIAL GROWTH …………………5
4. LATEST DEVELOPEMNET IN THE CORRIDOR …………………………..7
5. CHALLENGES …………………………………………………………………………….....7
6. CONCLUSION …………………………………………………………………………..…...8
7. POLICY RECOMMENDATIONS …………………………………………….…..9
References …………………………………………………………..10

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Africa Trade Training Program 2014 by the Australian Government
List of Figures
Figure No. 1: Map of EAC Members states (2014)
Figure No. 2: Throughput (‘000’ DWT): 2004 – 2013
Figure No. 3: Container Traffic (TEUs): 2004 - 2013
Figure No. 4: Transit Cargo Volumes (2004-2013)
List of Abbreviations
ADB African Development Bank
DWT Dead Weight Tonne
EAC East Africa Community
GDP Gross Domestic Product
GOK Government of Kenya
IMF International Monitory Funds
ICT Information Communication and Technology
IFC International Finance Corporation
JICA Japan International Cooperation Agency
MDG Millennium Development Goals
NCTT Northern Corridor Transport Transit
NTBs Non-tariff barriers
TEUs Twenty Foot Equivalent
MDG Millennium Development Goal
WTO -World Trade Organization

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Africa Trade Training Program 2014 by the Australian Government
1. OBJECTIVE
The objective of this brief is to explain the following:
 The constraints that affect member states using the transit transport corridor;
 The importance of the corridor for the region’s economy;
 The measures that need to be put in place by member states to address the
teething problems associated with the implementation of the treaty; and
 The actions that the Minister is recommended to take.
2. BACKGROUND
The Northern Corridor transport Transit Trade route connects Kampala, Kigali and
Bujumbura to the Port of Mombasa and includes a road network; railways; rail-lake
transport; inland water routes; and container terminals (Inland Container Depots). It
covers a distance of approximately 8,800 kms, and carries 80% of transit traffic for four
of the EAC member States.
Source: The Northern Corridor Transit 2004
Figure 1: Map of the Northern Corridor Transport Transit Route
The EAC Member states signed the Trade Facilitation Agreement in 1985 which contains
a number of provisions to facilitate 'transit' trade, with a view to promoting an efficient,
cost-effective and reliable transit transport system.

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Africa Trade Training Program 2014 by the Australian Government
The treaty was negotiated by the governments of Burundi, Kenya, Rwanda and Uganda,
and came into force in 1986 after the necessary ratification. The Democratic Republic
of Congo became the fifth member after acceding to the Agreement in 1987.
3. THE ECONOMIC SIGNIFICANCE OF THE CORRIDOR
The Northern Corridor is the busiest and most important transport route in East and
Central Africa, providing a gateway through Kenya to the landlocked economies of
Uganda, Rwanda, Burundi and the eastern Democratic Republic of Congo. It also serves
Southern Sudan since it broke away from Khartoum. This is a huge market for both
import and export trade.
Source: KPA Annual Bulletin of statistics
Figure 2: Throughput (‘000’ DWT): 2004 - 2013
The graph above shows a huge and growing trade volume with throughput between 2004
and 2013 rising from 12,920,000 DWT in 2004 to 22,307,000 DWT in 2013. In terms of
container volumes, there was a growth from 438,597 TEUs in 2004 to 894,000 TEUs in
2013 (see graph below).
Figure No. 3: Container Traffic (TEUs): 2004 - 2013
Source: KPA Annual Bulletin of Statistics 2013
Figure 3 Growth in container volumes: 2004 - 2013
0
200,000
400,000
600,000
800,000
1,000,000
1,200,000
1,400,000
1,600,000
1,800,000
2,000,000
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
438,597
436,671
479,355
585,367 615,733 618,816
695,600
770,804
903,463 894,000
TEU

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Africa Trade Training Program 2014 by the Australian Government
The need to promote implementing international and regional treaties, laws and
agreements geared towards trade and transport facilitation is stronger than ever
before. A comparative analysis between Singapore, the world’s best country to do
business in today - and members states of the Northern corridor provides a clear
indication that simplification, rationalization, harmonization, standardization and
modernization of trade business processes and documentation is the only positive way
for member states to make the region competitive for trade and potential
investors(International Finance Corporation 2012).
Removing non-tariff barriers to trade and reducing of the cost of doing business along
the Northern Corridor are still major challenges (African Development Bank, 2011). The
corruption by the police, weighbridge officials and delays associated with long
documentation is making the cost of doing business in the region very high
(International Finance Corporation, 2012). This is a threat to the potential for
continuing growth in trade by members states (see graph No. 3 below) and might lead
to creating fear among future potential investors in the region.
Transit Cargo using the NC
Source: KPA Annual Bulletin of Statistics 2013
Figure 4: Transit Cargo Volume (2004-2013)
3.1 Value Added concept to enhancing Growth Potential and Competitiveness
2,891
3,536
3,808
4,423
4,874 4,981
5,382 5,596
6,626
6,709
-
1,000
2,000
3,000
4,000
5,000
6,000
7,000
8,000
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
'000'DWT

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Africa Trade Training Program 2014 by the Australian Government
The region has great potential for increasing value added production if they can attract
new investors. More private sector economic activity can lead to gaining momentum
and developing sustainably higher growth. This will require a flexible framework on
business, a supportive legal environment, access to bank credit and a conducive trade
facilitation programme for both import and export.
Many of the necessary reforms are difficult to implement without political support but
some can be pursued with greater confidence (China Accession to WTO). A consequence
of not pursuing reforms could lead to a stagnating economy by “Klepto-cracy” by setting
so many regulations (Russia Accession) and the results are Success versus Failure,
opening the market to the world versus closing the business to yourself.
4. LATEST DEVELOPMENTS IN THE CORRIDOR
There have been positive developments resulting from the activities of member
countries in collaboration with development partners and the private sector. Among
them are:
 The introduction of one stop Centre concept at the cargo clearing facilities (Trade
mark East Africa)
 Infrastructure development at the port of Mombasa (GOK&JICA)
 Capacity building for officers working on documentation on cargo clearances
using ICT(kentrade agency)
 Positive steps taken by the Government of Kenya to eradicate corruption and
unnecessary delays along the route e.g. police officers and weighbridge
officials.(Daily Nation Kenya- 6th August 2014)
5. CHALLENGES

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Africa Trade Training Program 2014 by the Australian Government
5.1 Sharing of common information among member states or the general public is a
basic requirement at all entry points. However, this is still a challenge, for
instance there is no information on the internet, or publication of this
information in trade journals.
5.2 Although there is a certain level of involvement with the private sector on trade
consultations issues affecting them and their contribution, there is need for more
private sector/ Government consultation on implementation of some of the
issues as signed in the treaty.
5.3 The simplification of trade documents, harmonized in accordance with
international standards, is still wanting and this situation affects business
especially at the border points.
5.4 Although some of the agencies involved incargo clearance are currently utilizing
ICT, there are other agencies still lagging behind on implementing the electronic
exchange of data or automated border clearance.
5.5 Co-operation between various agencies of the various countries involved in the
corridor is essential, though this is not currently in practice especially among the
customs authorities.
6. CONCLUSION
Transit costs for landlocked countries constitute 35-40% of the value of imported goods.
A reversal of this situation will lead to many long term benefits to potential investors,
traders and the region at large and lead to speeding up of economic growth in the
region.
The governments of Kenya and Uganda have signed a contract to re-build the Kenya
Uganda Railway. The region therefore needs to increase its trade to enable the two
countries get a good return on their investment, and to ensure attaining the MDG.

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Africa Trade Training Program 2014 by the Australian Government
7. POLICY RECOMMENDATIONS
7.1 It is recommended that the Minister proposes to his/her counterparts in
the other corridor member countries that a study be carried out to
compare the current trade facilitation measures in place in the corridor
with the performance levels expected by the member states and also by
the private sector using the corridor.
7.2 It is recommended that member states should each form a cross-border
inter-ministerial committee to deal with the challenges and proposed
actions highlighted by the study once it is completed. The inter-
ministerial committees should then be used for monitoring and evaluation
of the progress made in addressing the identified problems.
7.3 It is recommended that all Governmental agencies dealing with cargo
clearance embrace electronic exchange of data or automation of all
border clearance in order to have a common framework for the systematic
elimination of Non-Tariff Barriers within the corridor.
COMMENT: Distinction. Well Done Weldon
References:

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Africa Trade Training Program 2014 by the Australian Government
Africa Development Bank (2011), Eastern Africa regional integration strategy paper 2011 – 2015, Regional
departments – East i & East ii (orea/oreb)
Cass. D, Williams G, Baker G, (2003) china and the world trading system entering the new millennium, university
press Cambridge. pp 21-22
Northern Transit Transport Authority (2012), 6th Northern Corridor Trade and Transport logistics chain stakeholders
consultative forum meeting held at Centre Romeo Golf Kinshasa, Democratic Republic of Congo.
Northern Transit Transport Authority (2004), a Paper Prepared by the TTCA Secretariat for Presentation at the
COMESA Business Kampala, UGANDA
The Port Management Association ofEastern and SouthernAfrica(2010), “Permanent RegionalCorridor Development
Working Group”, UN – ECA. pp 22
Websites:
International Finance Corporation (2012), Doing business- trade across the boarders (Singapore, Rwanda & Kenya)
International Monetary Fund reports-IV- reports (2012), Kenya, Uganda & Rwanda 10 years
World Trade Organization, China Accession (2005)
World Trade Organization, Russia Accession (2005)
World Trade Organization tariff online (2014)