Port efficiency can improve Kenya's global competitiveness

Kenya Association of Manufacturers chair Rajan Shah. [Courtesy]

Slightly over a month ago, whilst presiding over the Port Reforms Working Group Consultative Forum at the Port of Mombasa, President William Ruto reiterated the government's goal to transform Kenyan ports to be globally competitive.

"The productivity of the Port of Mombasa is directly linked to the state of our economy, improving efficiency will help us create jobs, boost export volumes and stimulate economic growth," he said.

We laud the government for taking this bold step. This is in line with Kenya Association of Manufacturers' (KAM) focus pillars on enhancing global competitiveness and fostering export-led growth to expand the manufacturing sector's contribution to gross domestic product (GDP) from the current 7.8 per cent to 20 per cent by 2030.

Maritime transport is the backbone of international trade and the global economy. Over 80 per cent of the volume of international trade in goods is carried by sea, and the percentage is even higher for most developing countries.

Kenyan ports of Mombasa and Lamu not only serve the country but also an extensive hinterland consisting of Burundi, eastern Democratic Republic of Congo, Rwanda, western Somalia, South Sudan, Uganda, northern Tanzania, and southern Ethiopia. Hence, the smooth flow of cargo through our ports is essential in making Kenya the destination of choice for goods coming into the country and those in transit to the hinterland.

Unfortunately, Kenya's global competitiveness in relation to international maritime trade remains low. The main concern for manufacturers is the lack of coordination and duplication of roles among the many government agencies involved in cargo inspection, verification, and clearance processes at the points of entry.

These have cost implications on imported goods, including high demurrage costs, which are passed on to importers or cargo owners as they are the main port consumers.

Further, over the years, importers have cited increased challenges during the importation process including congestion at the Inland Container Depot - Nairobi, re-inspection of cargo that has already been subjected to pre-arrival clearance in accordance with the Pre-Verification of Conformity (PVoC) Programme, and lack of harmonisation and configuration of the HS Codes used under the Integrated Customs Management Systems and Kenya Electronic Single Window System.

Other challenges include frequent clearing agencies systems downtime, and the invalidation of import classifications at various points of entry by customs officials leading to delays in customs clearance and increased costs of importation.

Once they are implemented, the reforms will be a significant step to remedy the numerous challenges at the Port of Mombasa. Seamless port operations through a "Common-user Middleware Technology Platform" for all government port service providers will transform the Port of Mombasa into a globally competitive gateway for Kenya and the wider EAC region.

KAM developed the Standard Operating Procedures (SOPs) for the Inspection, Verification and Clearance of Imports at the Ports/Points of Entry in Kenya in 2020. Through the publication, we seek to ensure that the procedures and processes for verification, inspection, and clearance of cargo are harmonised, to increase the efficiency and accountability of the importation processes, and ultimately, ensure port users remain competitive.

Key areas

We have singled out four key areas that would support our country in realising this. The first is effecting 24-hour operations by all agencies and service providers operating at the Port. Secondly, strict adherence to the PVoC programme including pre-arrival clearance, timely inspection of goods by PVoC Agents as well as the implementation of enriched Certificates of Conformity.

Thirdly, enhanced collaboration and information sharing among government agencies and training port stakeholders on the import process to reduce delays. Fourth is the review of relevant laws to eliminate the duplication of roles amongst the various agencies.

Enhancing efficiency and seamless movement of cargo at the ports of entry will undoubtedly reduce the cost of doing business in the country, stimulate growth and productivity, and increase our competitiveness in the region. We once again appreciate and fully support the government efforts towards this.

This is the only way we can make the ports the preferred entryway for investors in the region and across the globe and in turn enrich our global competitiveness as a country.

- The writer is the chairperson of Kenya Association of Manufacturers and can be reached at [email protected].