Only Innovations Can Reduce Costs in EAC

Trade Mark East Africa, an organization promoting trade in East Africa, launched the ‘Logistics and Innovation For Trade’ (LIFT) fund in Burundi last week,to help reduce the cost of transport and logistics in East Africa.-By J.BerchmansSiboniyo

TMEA delivering the prize to CFCIB at City Hill Hotel, Bujumbura. ©Iwacu

The idea originates in an analysis carried out by the World Bank (WB) in 2013, showing that freight logistics costs in East Africa are more than 50% higher than in the USA and Europe. The WB study goes on to showthat a reductionin transport costs by 10% could increase trade volumes by as much as 25%, thus reducing the cost of living and contributing to higher exports and faster economic growth.
Burundian businessmenbelieve Burundi to be thecountry that is mostaffected by the lack of technology in transport. In a meeting that Trade Mark East Africa (TMEA) held in Bujumbura, Burundian businessmen discussed their concerns regarding transport.

“Custom officers in Burundi do not have enough technology to control imported and exported products. To control goods they oblige us to offload them. They forget that there are breakable items that may lose their value during this process of offloading and uploading”, says one participant. Members of the audience also mentioned that Burundi has valuable products which cannot be exported due tothe lack of suitable means of transport. One of the participants pointed to fish from Tanganyika, particularlymukeke and ndagara. “These kinds of fish are liked in many countries. But we have no technology to keep them fresh during transport from Burundi to the destination”, he says.

Anthe Vrijlandt, the Country Directorof TMEA in Burundi says: “Logistics and transport are pillars of international trade,and TMEA is committed to helping any individual or enterprise with an innovative plan to reduce cost and time of transport, and to promote export tothe EAC Member States”. She continues that LIFT disposes of 16 million US dollar to fund any EAC entrepreneurs who show competence in transport and export innovation.
LIFT invites concept notes from private companies in the transport and logistics industry and those providing services to it, including non-profit organizations.

To encourage competitiveness, TMEA organizes competitions each year. TMEA used the occasion of the launching of LIFT to grant prizes to the winners of last year’s TMEA competition on transport and export. The CFCIB (ChambreFédérale de Commerce au Burundi) was awarded a cheque of $345,000 for promoting transport.EconyNdayegamiye, representing the CFCIB, expressed his appreciation: “The prize is very encouraging but my satisfaction is in that the TMEA through LIFT supports those who are willing to bring innovation.”

Rugo farm, a factory located at Rugombo, Cibitoke province, Burundi, which produces patchouli used for producing and distilling oil used in cosmetics, received $376,928 for promoting export in East Africa.ChadrickHabonimana, the Director of Rugo Farm, says these competitions have a real social impact on the EAC population in general, and on Burundians in particular. He asks theBurundian government to protect the interests of everyone willing to invest in Burundi.