South Sudan cargo stuck at Mombasa port over currency stalemate

Kenya International Freight and Warehousing Association board chairman Roy Mwanthi (centre) addresses a press conference in Mombasa, on January 1, 2025. [Omondi Onyango, Standard] 

South Sudan-bound cargo worth billions of shillings is stuck at Mombasa port following a disagreement between South Sudan Revenue Authority (SSRA) and importers over which currency should be used to pay taxes.

According to the SSRA, the importers must pay their tax in US currency before any cargo heading to South Sudan leaves the port.

But the importers want to pay the taxes in South Sudanese pounds and not US dollars.

Clearing and forwarding agents in Kenya who have been contracted to clear the goods in question complained that a stand off between the two parties over the currency to be used to pay taxes was the cause of delay in removing the cargo from the port.

Kenya International Freight and Warehousing Association (KIFWA) national chairman Roy Mwanthi said  that the refusal of the importers to ="https://www.standardmedia.co.ke/sports/amp/business/article/2001499336/mombasa-port-cargo-volume-up-as-dar-es-salaam-djibouti-hit-by-congestion">follow directives< of the SSRA was killing his members’ businesses.

“We have no objection to this directive as it is between SSRA and its taxpayers in Juba. However the importers who are supposed to pay the duties and taxes to their government have declined to do so,” said Mwanthi.

He said the importers insist their goods should go to Nimule border town in South Sudan where they can pay the taxes in South Sudanese pounds and not in US dollars as demanded by SSRA.

“This stalemate has now spilled over to us as Custom agents, forwarding agents and transporters,” said Mwanthi.

In a press briefing at Mombasa Sports Club yesterday, Mwanthi said the stalemate between the two warring parties in South Sudan was making agents incur storage charges.

“Thousands of containers are incurring storage charges, customs warehouse rents, overnight charges for trucks that are underload and worst, containers demurrage charges for delays in delivery and return of empty containers to shipping lines,” said Mwanthi.

Mombasa KIFWA branch chairman Mr Leonard Njiru warned  that if the trend continued, most of his members will close down their businesses.

"Our members are faced with the real threat of being shut out of business due to huge charges that importers are refusing to pay as they claim they are not responsible for the delays following the stand off between the warring parties," he said.

Members pleaded with SSRA to grant 100 percent waivers to the accrued demurrages for all containers which have been stuck at the port since November 20 last year.

They said this will help in restoring the normal cargo movement as failure to do so will force the members to raise advance demurrages payable prior to the release of the cargo from Container Freight Stations (CFSs).

Njiru said SSRA should also send the 100 percent waiver communication for the cargo in question to CFS and Mombasa port.

“We are suggesting that when this communication is effected it should also be copied to Kenya Revenue Authority to address the ="https://www.standardmedia.co.ke/business/shipping-logistics/article/2001504655/mombasa-port-cargo-up-12-per-cent-as-dar-durban-hit-by-congestion">issues of penalties< because of delays in re-exportation or bond cancellation,” said Njiru.

 Mwanthi said to alleviate the growing congestion at the port and CFSs because of the stalemate, cargo to South Sudan under transit bond should be released immediately.

He suggested that to avoid any delay, SSRA should follow up with importers in South Sudan to enforce taxes prior or on arrival at the Nimule entry border point.

Mwanthi suggested that importers be allowed to pay their duties and taxes in South Sudan currency.

“Allow importers to pay the taxes in South Sudanese currency other than in US dollars which is making it difficult for them to pay on time as demanded,” said Mwanthi.

He asked SSRA to join the ="https://www.standardmedia.co.ke/sports/business/article/2001488095/mombasa-port-handles-over-16m-cargo-containers-in-a-year">East African Community Single Custom Territory< and procure system so that they can collect import duties, taxes and other levies within the EAC laws.