Players in the clearing and forwarding sector are pushing for a new law to help streamline industry operations and kick out rogue clearing agents. The Kenya International Freight Forwarders Association (KIFWA) and the Federation of East African Freight Forwarders Associations (FEAFFA), in partnership with other relevant industry associations, want the adoption of the Kenya Customs Agents and Freight Forwarders Bill 2020. The Bill unveiled in Nairobi on Tuesday is drawn towards enhancing professionalism in service delivery and compliance to the existing regulations , the associations said. It is aimed at ending cargo delays at ports, improve cargo flow, improve revenue collection by the revenue authorities and lowering the cost of doing business. According to FEAFFA President Fred Seka, the new regulation is meant to streamline cargo clearance by ending the deployment of untrained agents, promoting fair competition, protecting industry players from unfair liability and supplementing existing government regulations. It will introduce mandatory registration and training of all customs agents and freight forwarders and fines and penalties for non-compliance and misconduct. “Kenya trades over 30 million tonnes of cargo within the East African community and the volumes keep growing, putting ever more pressure on a system that is inherently inefficient due to the lack of obligatory qualifications,” said Seka. The consequent delays are costing shippers as much as Sh25.6 billion annually in extra demurrage charges. The proposed bill will require all customs agents to demonstrate their understanding of the clearance processes, valuations, classification, rules of origin and management of the changing regional...

A slowdown in manufacturing activities and completion of a modern railway amid a drop in export earnings helped narrow Kenya’s trade deficit for the first time in three years, provisional statistics show. The deficit — the gap between imports and exports — shrank by Sh15.55 billion to Sh1.05 trillion in the 11 months through November 2019, according to fresh data collated by the Kenya National Bureau of Statistics (KNBS), marking the first drop since 2016. The 1.46 percent contraction was largely driven by a slowed growth in manufacturing, which suffered a cash crunch against the backdrop of mounting arrears by the government and credit rationing by commercial banks. The troubles of Kenyan factories, which largely rely on materials and machinery from abroad, helped push down the country’s import bill for the January-November period by Sh33.22 billion, or 2.03 percent, to Sh1.60 trillion. Earnings from exports, on the other hand, slipped at a faster rate of 3.10 percent, or Sh17.66 billion, to stand at Sh551.25 billion in the year to November, the KNBS data show. A persistently higher trade deficit, economists say, slows down creation of new job opportunities for the growing number of graduates as much of the revenue earned within Kenya is spent on buying goods from foreign factories, thereby raising production and job openings there. Source: Business Daily

A decade since it came into force, the East African Community Common Market Protocol, is going through a reality check. This week, Uganda lodged a formal protest against Kenya, over blockage of its milk exports. Kenya also accuses Uganda of imposing hefty duties on some of its exports especially beverages. Tanzania has been involved in several trade skirmishes with Kenya even as they were united in disputing Uganda’s sugar surplus and for a while blocking Ugandan sugar from their markets. In a case of selective amnesia, Uganda also does not believe Tanzania has a rice surplus although many Ugandan entrepreneurs rent land in southern Tanzania to grow rice. When the common market was conceived, it was believed free trade would be a vehicle for efficient allocation of resources across the economic spectrum. For instance, free movement of labour would allow skills to move from areas of surplus to areas in the community that had a deficit. Theoretically, application of those skills would over time raise the productive capacity of such an economy, creating a degree of parity with the rest of the region. What the framers might have anticipated but did not state, was that open markets would trigger a realignment of the regional economy as investors look for the most cost efficient production bases. Uganda got a taste of this early on when multinationals Bata and British American Tobacco shifted their manufacturing operations from Uganda to Kenya. This seeming loss has however, been more than compensated for by the...

Tax, previously relegated to the background as simply another cost of doing business, is high on the agenda of CEOs and boards of multinational enterprises (MNEs)—and small and medium enterprises (SMEs) in global trade and international business. Paradoxically, at a time when countries in East Africa are using tax and investment incentives to attract foreign direct investments and to stay competitive with other regions offering similar incentives, the veritable magnitude of changes in tax policies and laws made in recent years necessitates that directors and senior executives of MNEs—and the preponderance of SMEs—give due consideration to tax issues. Currently, beyond maximising shareholder value, there is growing concern about the handling of negative publicity, enduring heightened pressure from nonprofit advocacy groups to take less aggressive tax positions, and getting to grips with the impact of tax on business decisions. At the same time, community expectations of private sector companies in East Africa to pay their “fair share of taxes” are increasing. Against this backdrop, companies need to deliberately devise appropriate tax planning strategies and to actively engage senior executives, the board, and the finance and tax executives. A factor further complicating the intrinsically technical field of tax is the fast pace of changing policies and laws as the region’s tax authorities cope with the upshot of rapid technological innovations, global interconnectedness, disruptive business models, and the new era of talent mobility. Moreover, contemporary tax policies and laws are built on centuries-old principles and goals. From these observations, we can appreciate the...

Increased orders from Tanzania and Rwanda lifted exports of Kenyans goods to the six-nation East African Community (EAC) market to a four-year high in the period to September. Kenyan traders earned Sh102.69 in the nine-month period, representing a growth of Sh5.60 billion or 5.77 percent compared by the same period a year ago. This is the highest level of receipts from the bloc in the January-September period since Sh104.29 billion was recorded in 2016. It signals improving trade ties between Nairobi and Dar es Salaam. Exports to Rwanda surged Sh3.38 billion, or 25.06 percent, to nearly Sh16.89 billion, while orders from Tanzania climbed Sh2.25 billion, or 10.12 percent, to Sh24.43 billion, data collated by the Kenya National Bureau of Statistics (KNBS) show. Sales to landlocked Uganda, Kenya’s largest trading partner, increased a measly Sh901.3 million, or 1.95 percent, to Sh47.02 billion, while Burundi bought Sh5.18 billion goods — Sh156.4 million or 3.12 percent growth year-on-year. Exports to South Sudan, which has been ravaged by years of civil strife, dropped Sh1.08 billion to Sh9.18 billion, the KNBS data shows. This snaps a trend in recent years where Kenyan factories have struggled to grow exports to regional markets, largely due to tariff and non-tariff barriers fuelled by mistrust and unresolved trade disputes, particularly with Dar es Salaam and, in some isolated cases, Kampala. “If Kenya is to industrialise and really be a manufacturing powerhouse in the region, we need to have our own four-band tariff. This is zero for (importation of) raw...

By CORRESPONDENT, MOMBASA, Kenya, Jan 15 – The commissioning of the Lamu Port, a crucial facility in the Lamu Port South Sudan Ethiopia Transport (LAPSSET) Corridor project, hangs in the balance as Kenya awaits the commitment of regional leaders to grace the event. The port was set to be commissioned in December, but the date was later vacated in a bid to ensure regional Heads of State attend the commissioning. Berth number 1 at the Lamu Port had been completed at the time. Berth 2 and 3 are scheduled to the completed this year. Next month, a large ship operated by Mersk Shipping Line, will dock at Lamu Port, Macharia said. Transport Cabinet Secretary James Macharia on Tuesday joined Ethiopian Ambassador to Kenya Meles Alam and South Sudan’s Undersecretary in the Ministry of Transport Capt David Martin to sign a Memorandum of Understanding (MoU) on LAPSSET, the CS remaining noncommittal on the commissioning of the project. “Lamu Port is a regional project that was launched by the three head of states of Kenya, Ethiopia and South Sudan in March 2012. As a country, we cannot go back and commission it on our own. We want the same head of states to be present during commissioning,” Macharia said, declining to give a date for the official opening. Ambassador Alam allayed fears Ethiopia, having signed a peace deal with Eritrea in 2018, might backtrack from the LAPSSET project. “However, our presence in this meeting testifies the full commitment the Ethiopian government has towards implementation of...

President Uhuru Kenyatta will in mid next month launch the first berth in Lamu Port, Transport Cabinet Secretary James Macharia announced yesterday. Speaking in Mombasa, Mr Macharia said the first ship - owned by Maersk Shipping Line - would also dock at the port during the official launch to be graced by up to five heads of state.“This is a continental project. We postponed to give guests from even South Africa an opportunity to attend,” he said during a regional ministerial meeting on Lamu Port-South Sudan-Ethiopia-Transport (Lapsset) project.Macharia said construction of second and third berths would be completed by December. “We are addressing the security challenges to facilitate the completion of the project.” Last week, more than 1,000 construction works at Lamu port were suspended after Al Shabaab militants attacked a United States military base at Manda Bay airstrip, 10km north of the port.The invasion at the military base took place days after the militants also attacked three buses at the Nyongoro area on the Garsen-Lamu road and killed three passengers. A multi-agency security team is currently combing the expansive Boni Forest believed to be the militants' hiding ground.Last week, the China Communications Construction Company, Ltd, which is building the first three berths at the port, sent its employees home, saying it could not guarantee their security. Yesterday Macharia said work had resumed and construction of two more berths and roads, including the Lamu-Garsen highway, would be completed as scheduled.He was addressing the regional ministerial meeting on the Lapsset corridor,...

While Kenya’s Standard Gauge Railway offers a cheaper more efficient transport option for cargo it has also resulted in job losses. The multibillion-shilling SGR offers its services to landlocked countries in East Africa, and so far container traffic has grown fourfold, with the Inland Container Depot (ICD) in Nairobi handling up to seven cargo trains daily from just one when the freight service was launched in December 2017. The ICD has also benefited after cargo clearance was moved from Mombasa to Nairobi. In 2019, the SGR hauled close to nine million tonnes of cargo to Nairobi after the government introduced ex-hook railage where cargo is offloaded directly from the ship to the wagon. Uganda’s business community has lauded the project as it has reduced time taken to clear and transport their cargo from one week to a few days. Uganda’s consular in Mombasa, Katureebe Tayebwa, said the SGR was timely as more than 80 per cent of transit cargo handled at the port of Mombasa is destined for Kampala. “We support the SGR and despite a few issues with some transporters we hope to resolve them once the Naivasha terminal becomes fully operational,” said Mr Tayebwa. Source: The East African

*Good figures for the port of Mombasa in Kenya, which recorded its best score in 2019, representing a 7.3% growth in container handling.* With more than 1.400 million twenty-foot containers handled in 2019, a growth of more than 7% more than in 2018, the port of Mombasa scored its best score in its history. This is thanks to growth in transit and transhipment activities and numerous investments. A record which encourages it to go even further in its 2020 forecasts. Source: Youtube

The hare one day ridiculed the short feet and slow pace of the Tortoise, who replied, laughing: “Though you be swift as the wind, I will beat you in a race.” The Hare, believing her assertion to be simply impossible, assented to the proposal and they agreed that the Fox should choose the course and fix the goal. The Tortoise never for a moment stopped but went on with a slow but steady pace straight to the end of the course. The Hare, lying down by the wayside, fell fast asleep. At last, waking up and moving as fast as he could, he saw the Tortoise had reached the goal and was comfortably dozing due to fatigue. Two years ago, if you told anyone President Uhuru Kenyatta and former Prime Minister Raila Odinga would travel to Kisumu for the launch of the refurbished port, no one would have believed. And so while the country was being treated to unending politics and other sideshows in the last two years, Kisumu was getting a new lease of life. The launch, earlier scheduled for today, marks a major step towards not only re-energising the economy of not only of Kisumu but the entire Western region. Kisumu is now a major economic hub in the region, especially for the countries that rely on Kenya for imports. This port will be a major boost for regional trade as Uganda and Tanzania have already set up offices there. This makes it a major game-changer especially with...