Electronic cargo clearance system to boost Kenya’s economy

By Standard Digital Reporter

Kenya: The transition from manual to Electronic Cargo Clearance System is set to boost the economy and increase prosperity in Kenya.

According to the Kenya Trade Network Agency (KenTrade) Chairman Gen Joseph Kibwana (Ret), the October transition will make trade systems simpler, faster and more cost-effective thus improving economy.

He was speaking during a workshop organised by Kentrade to sensitise stakeholders in trade logistics and shipping industry, on the implementation of the Kenya National Electronic Single Window System (KNESWS) project and how it will impact on their businesses.

Gen Kibwana said inefficiencies in the trade logistics in the country have been for many years a major cause of concern to Government and the trading community alike.

“The procedures involved in cargo clearance processes have been cumbersome and expensive and also prone to corruption. We seem not to have paid serious attention to trade facilitation as a country and this has brought a lot of suffering and inconveniences and unnecessary costs to business enterprises particularly those engaged in the import and export trade” Kibwana said.

These inefficiencies, he added, contribute to 45 per cent of the Cost, Insurance and Freight (CIF) value of goods imported and exported, which can easily be translated to estimated losses of up to USD 100 million every year.

Gen Kibwana further said that Kenya’s ranking in the annual World Bank’s survey report on the Ease of Doing Business Index had dropped from position 117 in 2011 to position 121 in 2012.

“When we take a look at the present global scenario in trade facilitation, we note that countries that have embraced the Single Window System and other trade facilitation measures such as Singapore, have made great economic strides and are very competitive,” he added.

The improvement of Kenya’s Doing Business Index Ranking, particularly in the category of trading across borders, is important for the country because potential investors worldwide want to invest in countries that have efficient trade logistics processes and that are cost effective.

He noted that KenTrade has welcomed the President Uhuru Kenyatta’s directive that transit cargo should take a minimum of five days from clearance at the Port of Mombasa to the border posts of Malaba and Busia.  

He further added that the Single Window Project will streamline the business processes and eradicate bottlenecks associated to manual documentation of international trade transactions.

Ken Trade’s Chief Executive Officer Alex Kabuga appraised the stakeholders on the milestones recorded in the project implementation which began in October, 2011 and due for roll out in at the end of October  this year.  

Kenya International Freight and Warehousing Association (KIFWA) National Chairman Boaz Makomere said KIFWA fully backs the introduction of the Single Window System since its implementation will help address the existing inefficiencies in trade logisitics.

Makomere further added: “KIFWA supports implementation of the Single Window System from the top level of leadership to the lowest individual clearing agent on the ground is because we know that its success is not an option to us.

During the workshop, the Kenya Shippers Council CEO Gilbert Langat noted that the shipping industry is in great anticipation of the effective automation of the port clearance and the integrated electronic platform.

Langat said Single Window System will rescue Kenya from economic loses occasioned by wastages and delays as a result of inefficiencies from the paper based cargo clearance at the Port.

Other stakeholders who attended the event were Mombasa County  Secretary for Trade, Energy and Industry Hon Ibrahim Mohammed, Chief Executive Officer of Kenya Shipping Agents Association Juma Tellah, Mombasa County KNCCI Chairman James Mureu, Nakuru County KNCCI Chairman Njuguna Kamau, KIFWA Nairobi Branch Chairman Grace Chege among other stakeholders in trade logistics and shipping industry.