Customs reform and modernization in East Africa, 1995–2010

Abstract

Between 1995 and 2019 the East African Community (EAC) implemented one of Sub-Saharan Africa’s most ambitious customs-
reform agendas, anchored in the 2005 Customs Union and the 2010 Common Market Protocol. Drawing on a new panel dataset of
statutory tariff schedules, country- and firm-level deviations, and original customs-transaction micro-data from all five EAC
members, this paper evaluates how far reforms translated into (i) faster trade flows, (ii) higher revenue collection, and (iii) deeper
regional integration. We find that average border-clearance times fell by two-thirds, from 21 days in 2000 to 4–7 days in 2019, while
the share of customs revenue in total government receipts rose by 4.6 percentage points despite large internal tariff cuts. Yet the
“common” external tariff (CET) became increasingly fragmented: the annual number of country-specific deviations—Stays of
Application—grew from <100 in 2009/10 to >900 in 2018/19, driven mainly by Kenya, Tanzania and Uganda seeking extra
protection, whereas Rwanda used the same mechanism to lower duties. Firm-level exemptions under the EAC Duty Remission
Scheme reveal that 87 % of tariff reductions were granted on capital- and intermediate-goods imports, suggesting that
modernization prioritized production efficiency over consumer welfare. Overall, customs automation, risk-based controls and one-
stop border posts delivered measurable gains in trade facilitation, but selective erosion of the CET indicates that national industrial-
policy objectives have tempered the integrative logic of the customs union. The paper concludes with policy options to reconcile
revenue, protection and regional-coherence goals in the next phase of EAC reform.

IPRAA WORKING PAPER 122

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