OSBPs mean trade volumes and higher revenues for Kenya and Uganda

The recently launched Busia One-Stop-Border Post (OSBP) by the Heads of States of Uganda and Kenya, is one of the fifteen (15) OSBPs in East Africa financially supported by Trade Mark East Africa (TMEA) since 2010. The Busia OSBP will boost intra-regional trade along the Northern Corridor by cutting the time taken to clear goods and to cross the border between Kenya and Uganda.

“The Northern Corridor Time Release Study, 2016” , indicates that on average, crossing time between Kenya and Uganda was 19 hours 45 mins and 5 days 7 hours 31 mins for goods cleared under Transit and Home Use Regimes while Crossing time cleared under Single Customs Territory (STC) regime was 7 hours 31 mins. With the operationalization of the Busia OSBP the Crossing time will considerably improve.

Construction of the Busia OSBP was carried out with funding of US$11.7million from the United Kingdom through the Department for International Development (DFID) while the systems and other related soft infrastructure equivalent to US$1.2million was funded by Global Affairs, Canada. The OSBP investment includes office buildings, roads and parking yards, cargo verification bays, scanner shed, passenger sheds, targeting booths, warehouse and canopies, ICT networks and hardware, furniture, and institutional support to the border agencies.

The OSBP arrangement brings together under one roof, all the Government agencies performing border crossing controls procedures, doing away with need for two stops for motorised traffic and persons to undertake clearance at each side of the border. This arrangement expedites movement, release and clearance of goods and persons across borders, by streamlining border procedures, automation of the border processes and simplification of trade documents.

Kenya is still the leading exporter in the Northern Corridor region according to the “Northern Corridor Transport Observatory”, trading in various products such as tobacco, machinery, transportation equipment, petroleum products, oils, motor vehicles, iron and steel, agricultural products, paper and paper products, pharmaceuticals, fertilizers, construction materials among others. Around 50% of exports to the Northern Corridor region goes to Uganda. And indeed, 93.9% percent of imports to Kenya from the Northern Corridor Region originate from Uganda.

Comparing the performance between 2016 and 2017 from January to June, exports reduced from USD 608,736,595 to USD 623,759,748 while imports increased from USD 82,453,445 to USD 158,446,006. Imports from Uganda almost doubled from USD 77,610,885 to USD 150,393,013.

During the launch of Busia OSBP, Uganda President H.E Yoweri Museveni commended the British government who have supported Uganda through TMEA, in the construction of the one stop border post making it easy to cross the borders and to do business with Kenya. “Trade is a means that will help us create prosperity for the people. My government is committed to creating wealth and jobs for the people through creation of enabling environment for services, Information Communication Technology, commercial agriculture and industries”, President Museveni said.

Kenyan President H.E Uhuru Kenyatta also underscored the importance of the OSBP emphasising that the facility is an important link for ease of trade between the two countries.

“Uganda continues to be an important trading partner for Kenya. Opportunities for increased trade and investment have been created. I am happy to hear that because of this OSBP here in Busia, our revenue authority has been able to collect more revenues, a clear indication of increased trade flows”, recalled President Kenyatta.

According to TMEA CEO Frank Matsaert, The completion and operationalisation of the Busia OSBP is a crucial milestone in increasing access to markets and the facilitation of the movement of cargo along the Northern Corridor.

He said, “Ultimately, our projects in physical infrastructure and automation of key government trade processes like customs, have complemented each other to reduce the cost of doing business and boost trade volumes, increasing both Kenya’s and Uganda’s overall trade competitiveness. Most importantly, they have contributed to governments being able to expand businesses thus creating jobs.”

TMEA, through its donors and in partnership with the East Africa Community has since 2010 to date supported 15 OSBPs in East Africa and has invested about US$117 million in OSBPs and access roads.

With more assistance from Development Partners and Member States, the Heads of States of Kenya and Uganda pledged to ensure all border posts to be upgraded into OSBPs to ease Cargo Clearance and facilitate trade along the Northern Corridor.