Trade crippled as South Sudan imposes new levy

Cranes offloading containers from MV Jolly Giada LOA The 3rd full at the Kenya Ports Authority in Mombasa County on Wednesday 6th March 2024. The Ignazio Messina Line is 260mtrs and 4395 TEUS capacity.[FILE,Standard]

Clearance of transit cargo destined for South Sudan has been crippled following a notice abolishing the container deposit fee and instead introducing a $3,580 (Sh461,820) container levy through the South Sudan Revenue Authority (SSRA).

Clearing and forwarding agents processing South Sudan cargo have suspended work following enforcement of the directive by the commissioner general of SSRA from November 28 this year.

The new maritime container release levy is demanded in the South Sudan system, which clearing agents describe as a violation of existing legal undertakings with shipping lines and laws under the East African Community Customs Management Act, 2004.

The agents, led by Roy Mwanthi and Leonard Njiru, stated that the directive will increase the cost of doing business through the port of Mombasa and the Northern Corridor due to the new levy. This, they said will leav traders in South Sudan facing substantial financial losses that could lead to the collapse of their businesses or enterprises.

“On the subject of abolition of container deposits by the commissioner general SSRA, it is noteworthy that these deposits are paid against elaborate contracts and agreements between legally registered entities, with clearly stated legal obligations and liabilities between shipping lines, shipping agents, shippers, importers, or agents like ourselves. 

“Some of these agreements involve depositing a revolving fund against which containers are released without paying the huge container deposits, providing significant relief to operational cash flows for importers, including those in South Sudan. Why now create such a hefty cost burden for South Sudan importers?” the agents asked.

The agents noted that container deposit securities are refundable upon fulfilling the stated guarantee conditions, but it is not clear whether the new levy will follow the same practice.

The notice does not state whether the maritime container release OTP (One-Time Password) fee of USD 3,580 shall be refunded, how it will be refunded, whether there will be deductions, and if so, for what reasons, to whom, and when.

“This is a grey area where traders risk losing their hard-earned money,” they said.

In a statement, the clearing agents, also known as customs agents, said they will not relent until the directive is withdrawn in writing, terming it a major non-tariff barrier to trade in the region.

They warned that traders in South Sudan are likely to seek alternative entry ports for their cargo, which could benefit the port of Dar es Salaam. South Sudan is the second-largest user of the Mombasa port after Uganda, handling about 1.7 million metric tonnes of cargo in 2024, with volumes expected to increase in 2025. “Dar es Salaam port will likely benefit. We therefore call upon the Kenyan government, and especially the relevant departmental committee of the National Assembly, to intervene and determine who the interested parties are in this matter in South Sudan,” they said.

They alleged a scheme to monopolise the clearance and transportation of South Sudan cargo by a few companies in the country.