The governments of the United Republic of Tanzania and Uganda have finally reached a bilateral agreement to reduce the road user fees imposed on Ugandan cargo trucks from the initial $500 per trip to $10 for every 100km.
The reduction in the levy is a huge relief to the private sector and especially the logistics sector players who viewed it as a barrier to trade in the region.
The agreement was reached by the two countries during the official two-day visit to Uganda by Her Excellency President Samia Suluhu Hassan.
The mandatory levy caters for the costs incurred in repairs and maintenance of the roads plied by the trucks with the view of enhancing the safety of users.
“This is a dream come true for the logistics sector players who over the years, have been pushing EAC governments to reconsider the none harmonized road user fees in the region.” said, Mr. Fred Seka, FEAFFA president.
According to Mr. Seka, harmonization of the levies charged along the transport corridors will enhance competitiveness in the sector as it will eliminate the undue advantage it was putting on foreign truckers promoting free movement of trucks across the region thereby contributing to increased intra-regional trade in East Africa.
In mid-2021, Tanzania had increased the road levy to $500, translating to a whopping UGX 1,779,087 chargeable for every Ugandan truck transporting cargo from the port of Dar es Salaam to Uganda. The levy on trucks bound for Rwanda on the other hand was retained at $152.
“When the levy was increased, we officially filed a complaint with the East African Community Council of Ministers and the East African Freight Forwarders Associations for increased advocacy to push for a uniform rate,” said Mr. Charles Mwebembezi, the Chairperson of Uganda Freight Forwarders Association (UFFA).
Uganda accused Tanzania of breaching the Common Market Protocol by imposing different road user charges on partner states in the same trading bloc.
The lowering of the road user fees also gives the port of Dar a consideration by Ugandan importers because of the likely reduction in logistics costs.
Tanzania, according to a joint communique issued by the presidency, directed the relevant ministers to find amicable solutions to the existing non-tariff barriers and allow for the smooth flow of trade between the two countries. This they believe will harness the Uganda-Tanzania trade potential and even benefit the region.
They also applauded the re-opening of the Mwanza-port Bell-Kampala route which is now operational and has greatly reduced the transit time from Dar to Kampala from 9 to 4 days thus reducing the cost of doing business.
Tanzania, through the port of Dar es Salaam, serves as the gateway to its landlocked EAC neighbors including the Republics of Uganda, Burundi, Rwanda, and DRC who recently joined the EAC.