NAIROBI, Kenya, Oct 6 – The East African Community (EAC) leaders have been urged to hasten the full implementation of the new EAC Rules of Origin gazetted in January this year.
General Motors East Africa Limited Managing Director Rita Kavashe laments that slow implementation of these rules continues to hinder the expansion of the auto industry especially easy access of motor vehicles within the region.
She was speaking on Wednesday when Tanzanian President Jakaya Kikwete officially flagged off the first batch of locally assembled vehicles from General Motors East Africa Head Quarters in Nairobi, destined for the Tanzanian market.
“Trade across borders is very important to us at General Motors East Africa. Tanzania has traditionally been a very significant market for General Motors East Africa. It is part of our DNA that we operate across East Africa and the move to ease trade between Kenya and Tanzania,” she said.
The rules recognise goods produced wholly or partially from materials imported from outside the partner States, as long as the value of the imported materials does not exceed 60 percent of the total cost of the materials used in the production of the final product.
In this case, the final products should not attract duty when sold to another EAC member State.
Kavashe also called for harmonisation of age limit for second hand vehicles entering the region adding that this still remains a challenge for the growth of the sector.
In response, President Kikwete assured that Tanzania was ready to work with Kenya and would look into the matter as well as removing all the non-tariff barriers that may continue to hinder business between Kenya and Tanzania.
“Trade between EAC member States is a meagre Sh597.9 billion in total. This is very small compared to the amount of trade that the EAC does with the outside world. We are working to bolster this by putting in place innovative incentives like the zero rating of duty on products produced in one member state and sold in another,” President Kikwete assured.
Kikwete’s visit to GM’s plant comes after the company entered the Tanzania market. This was followed by official lifting of a 30 percent excise duty levied on General Motors East Africa products that are assembled in Kenya for that market effective October 1, 2015.
In July 2015, General Motors East Africa Limited signed a dealership agreement with Quality Automotive Mechanization Limited (QAML) that will allow the Isuzu and Chevrolet brands to enter the Tanzanian market.
The Tanzanian President who toured the General Motors vehicle assembly facility in Nairobi noted that the renewed business collaboration between Kenya, Tanzania and the rest of the EAC would further improve economic relations.