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The East African : Sep 5th 2015
34 The EastAfrican BUSINESS SEPTEMBER 5-11,2015 Single Window System alone will not delive≥ wanted ≥esults I nternational trade has grown rapidly in recent years, thanks to the progressive reduction of tariffs and quotas through multilateral trade liberalisation. More trade means more goods crossing borders and having to comply with Customs formalities. Businesses suffer both direct border-related costs, such as expenses related to supplying information and documents to the relevant authority, and indirect costs, such as those arising from procedural delays, lost business opportunities and lack of predictability in the regulations. Surveys aimed at calculating these costs suggest that they may range from 2 per cent to 15 per cent of the value of traded goods in developed countries and upto between 30 per cent and 42 per cent in production costs in developing countries. Inefficient border procedures cost governments in terms of lost revenue, smuggling and difficulties in implementing trade policy, for instance because of difficulties in determining the origin of products or in collecting accurate statistics. With increasing integration of economies around the world, facilitating the smooth flow of trade becomes a pressing requirement for governments and businesses. Efficient information systems and procedures can significantly reduce the time taken to move goods, reduce costs and improve business. In Kenya, trade facilitation is carried out by a number of institutions. The roles of the trade facilitating agencies range from revenue collection, provision of services for cargo movement and ensuring that goods conform to the set standards and health regulations, efficiency and enhance the overall COMMENTARY GILBERT LANGAT “Essentially, everyone stands to gain from making the process of trade easier.” economic performance of a country. The overall objective of the Kenya Electronic Single Window System Project also known as Kenya TradeNet System is to facilitate international trade in Kenya by reducing delays and lowering costs associated with clearance of goods at the border, while maintaining the requisite controls and collection of levies, fees, duties and taxes on imports or exports. Despite recent reforms, trade related procedures remain lengthy and costly; an aspect which has negatively impacted on the competitiveness of Kenyan goods in the region. The rationale for implementing the Single Window System results from the following weaknesses inherent in the current system: Besides having upto 27 agen- cies, duplication has become the order of the day, for example between Kenya Bureau of Standards and National Transport Safety Authority on vehicle inspections, Pharmacy & Poisons Board and Nursing Council of Kenya, National Bio safety Authority and Radiation Protection Board. Again the motivation does seem to be elsewhere – revenue generation. Essentially, everyone stands to gain from making the process of trade easier. Governments gain because efficient border proce- dures enable them to process more goods and improve control of fraud, thus increasing government revenue. Businesses gain because, if they can deliver goods more quickly to their customers, they are more competitive. And consumers gain because they are not paying the costs for lengthy border delays. The benefits of single window clearance of cross-border cargo to an economy are numerous. The World Bank says that economies that have adopted single window systems for transparent, efficient and faster cargo clearance are better than those without. The Bank’s 2014 Logistics Per- formance Index ranking places Kenya at number 74 while Egypt and South Africa are at 62 and 34 respectively. Based on the present volume of goods imported into and in transit through Kenya, it is estimated that the streamlined procedures will result in savings to the Kenyan economy of some $150 million annually during the first three years. This will increase to between $300 million and $450 million annually in subsequent years. The Single Window System is relevant to implementation of 8 of the 13 articles of the Trade Facilitation Agreement commonly known as the Bali Agreement. However, for the gains already realised to be sustainable, Kenya must give priority to a number of key success factors, especially the legal framework for the Kenya TradeNet System. All the government trade fa- cilitation agencies envisioned as stakeholders in the Kenya TradeNet System are currently anchored within the Kenyan laws with clear mandates and objectives. Participation of these agencies in implementing the Kenya TradeNet System will involve some of them ceding their mandates to the operating entity of the Kenya TradeNet System. The other crucial success fac- tor is the e – readiness of stakeholders. While stakeholders in the private and public sectors have invested in ICT, some government departments are still relying on manual processing. The Kenya TradeNet System will be anchored in a strong ICT base though lack of infrastructure is likely to hamper progress in its implementation. But to gain from the Single Window System, system stability and the harmonious co-existence between Kenya Revenue Authority and KenTrade, timely delivery of the Port Charter and strict adherence of Kenya Ports Authority (KPA) and KRA to their service delivery are all essential. KPA and KRA must also re- view their business processes by eliminating rigid and outdated rules and non-tariff barriers, embracing modern technology to prevent leakage of revenue while at the same time providing customer friendly environment The government must also eliminate the duplication of work among system users. Shippers too must play their part by paying duties, submitting documents on time, making accurate declaration, improving their systems and employing best practices. Gilbe≥t Langat is the CEO of the Shippe≥s Council fo≥ Easte≥n Af≥ica and chai≥ of Mombasa Po≥t Cha≥te≥. He also ≥ep≥esents shippe≥s’ inte≥est at the KenT≥ade Boa≥d. Dr Sezibera Picture: File EAC ≥eclaims So≥oti Flying school By ADAM IHUCHA Special Correspondent THE EAST AFRICAN Community Secretariat will reclaim the regional aviation academy in Soroti, eastern Uganda. “The EAC secretary general should submit a proposal for the reinstatement of the Soroti Flying School to the Sectoral Council on Transport, Communications and Meteorology,” reads the report from the 32nd meeting of the Council of Ministers. The Council further directed the secretary general to report progress at its 33rd meeting this month. Uganda took over the 48-year old East African Civil Aviation Academy (EACAA), renamed Soroti Flying School, after the collapse of the first EAC in 1977. But the cash-strapped academy is now a pale shadow of what it used to be prompting threats of closure for flouting ICAO’s safety standards. “We have agreed wholeheart- edly that Soroti Flying School be taken back as an institution of the EAC. After all, that is where it originally belonged,” Uganda’s Minister for EAC Affairs Shem Bageine said. Uganda has all along lobbied to have the school funded and managed by the EAC, saying Kampala was facing budget constraints. On July 3, 2014, the Ppresidents of Kenya, Uganda’s and Rwandaconceived the idea of designating the EACAA as one of the centres of excellence in the EAC. However, they underlined the need to make it one of the EAC’s institutions first so it could start enjoying budget from the regional body, before designating it as the centre of excellence in aviation studies. EAC Secretary General Dr Ri- chard Sezibera confirmed that upon reinstatement, the academy will have access to funds from EAC development partners. However, Dr Sezibera warned, the school must be run as an autonomous institution of the EAC. The institution offers training Port of Mombasa. If all systems work as intended to, goods will be cleared faster. Picture: File for commercial and private pilots, flight instructors and airport maintenance engineers among others.
Aug 29th 2015
Sep 12th 2015