Contents
Overview
The East African Community (EAC) is a regional intergovernmental organisation of 6 Partner States, comprising Burundi, Kenya,
Rwanda, South Sudan, Tanzania and Uganda (with its headquarters in Arusha, Tanzania)
The creation of an EAC Common Market (approx. 177 million consumers) is one of the key integration milestones for the countries
of the EAC. The aim is to progressively transform into a ‘single market that allows for free movement of goods, persons, services,
labour and capital while guaranteeing rights to residence and establishment.’
The EAC, as implemented so far, permits the free movement of factors of production (i.e. labour and capital) between the EAC Partner States.
The reality, however, as reported by some of our Members, is that alongside the incomplete EAC Common Market agreements (particularly relating to
customs taxes on goods) the political tensions between the countries are still a hindrance to the movement of factors of production. This means
that most sectors are still to feel the full benefits of the EAC Common Market. (Case Study → BAG Innovation & Hollandia Fair Foods)
Rwanda as a gateway to EAC
For anyone coming from Europe and intending to start a business in East Africa, Rwanda’s political stability, security, infrastructure, and enabling institutions make it a near-ideal place to get started.
However, when compared to some of its neighbours (Uganda, Kenya, Tanzania, DRC), Rwanda has the disadvantage of a smaller population with less purchasing power.
This means that for most businesses exporting to neighbouring countries will be a critical component of success.
The EAC Customs Union, in facilitating the access to the EAC’s 165 million remaining consumers outside of Rwanda, holds huge potential for
Rwandan-based businesses. However, the EAC Customs Union is still incomplete and given the political climate between some of the Members
States still fails to deliver on its “Single Market” vision.
If someone could push a button and enable this East African Community (EAC), it would be such a massive super-power. But there are still small petty arguments standing in the way. (Gabriel Ekman – CEO BAG Innovation)
That being said, Rwanda still features significant advantages for entrepreneurs and investors looking for a test-bed for a new product or service destined for the African market.
After reaching product-market-fit, expansion into EAC countries is still feasible despite the various custom taxes still in place.
One method is to replicate production locally in the neighbouring counties.
Rwanda is a great starting point for brining your product to the East-African market. It acts as a hub from which you can scout surrounding opportunities and then deliver services and goods to surrounding countries(Tobias Reiter – CEO Viebeg)
Fiscal Regime under the EAC Common Market
There has been a misconception among the public that under the Common Market, all goods imported into Rwanda or other member states are exempted from taxes. This is not the case, however; as taxes on international trade will remain with the exception of import duty which remains at 0% on goods from the community that comply with the Rules of Origin Criteria. (RRA)
In other words, only goods that originate in the EAC Partner States (or that have undergone significant processing in an EAC Partner State) are exempt from import duty.
Certificate of Origin
In Rwanda the origin of a product must be certified with a Certificate of Origin which can be issued by any of the following RRA Stations:
- Gikondo Customs department
- Gatuna (Rwanda-Uganda border)
- Rusumo (Rwanda-Tanzania border).
- (The service will soon be introduced at the Rwanda-Burundi border.)
Trading with the EU
Burundi, Rwanda, Tanzania and Uganda are covered by the EU’s Everything But Arms initiative, under which all products from Least Developed Countries — except arms and ammunitions — have preferential access to the EU market.
Export licences
For businesses interested in exporting goods you will need to acquire an export license. The type of product to be exported will determine the type of export license you will need to apply for..
To find information on requirements, procedures and costs of the various Export
Licenses visit The Rwanda Trade Portal –
Export page
Import licenses
For businesses interested in importing goods you will need to acquire an import license. The type of product to be imported will determine the type of import license you will need to apply for.
To find information on requirements, procedures, and costs of the various Import Licenses visit the Rwanda Trade Portal – Import Page
For goods originating outside of the EAC, the EAC Customs Act prescribes the so-called Common External Tariffs (CET). Goods are generally subject to import duty of:
- 0% for raw materials and capital goods,
- 10% for intermediate goods, and
- 25% for finished goods.