Rwanda and the Democratic Republic of Congo have removed Nido, tobacco and timber on a list of commonly traded goods under the Comesa free trade area, making them uncompetitive in pricing in domestic markets.
The products were struck off the list during a technical bilateral meeting in Kigali called for the two countries to harmonise the lists of common traded goods under the Comesa Simplified Trade Regime.
Despite being a member of Comesa, DR Congo had not agreed on a list of the commonly traded goods— that should be exempt from import duty when traded in either country.
“We are to signed MoUs with Uganda, Zambia, South Sudan and Rwanda,” said Jean Jacques Chiribagula Ntwali, head of the Congolese delegation and investment aisor in the Kinshasa government’s Ministry of Commerce.
The Rwandan negotiators opposed tobacco from Democratic Republic of Congo largely on health ground, saying exemption from import duty will trigger increased consumption, which is a health risk to the population.
Rwanda also objected to Nido manufactured in Congo to be included on the list, saying DR Congo imports most of the raw materials.
Peace Basemera, an international trade negotiator and co-operation specialist at the Ministry of Trade and Industry.
Rwanda expects to increase its revenue collections from tobacco imports and also protect the local manufacturers from competition.
In the 20152016 Budget, the taxman slapped a 120 per cent excise duty on tobacco as the country seeks to reduce dependency on donor aid.
The Democratic Republic of Congo negotiators also countered Rwanda by stopping the country from including timber and its products on the list, saying it would jeopardise their forest conservation efforts.
To conserve the forest, the DR Congo timber industry is subjected to quotas which are monitored.
However the DR Congo team allowed 119 products including those of Bralirwa— Rwanda’s principal brewer and soft drinks bottler.
Analysts believe the new development, which could come into force before the year ends, will cushion Bralirwa against falling exports and cushion save the company against the plummeting revenues.
READ: Bralirwa feeling effects of new beer levy by Kinshasa
DR Congo is the leading informal export market for Rwandan products, controlling 81.6 per cent of the exports.
But the brewer suspended exports to Congo, citing high taxes that made her products uncompetitive in pricing since 2013.
The products were subjected to import duty, VAT and excise duty when the DR Congo became hostile to Rwanda and businesses on allegation that the Kigali government was aiding the M23 rebels.