Sh290m grant to ease trade processes

November 28, 2012


JIT is a production strategy that strives to improve a business return on investment by reducing in-process inventory and associated carrying costs/FILE
NAIROBI, Kenya, Nov 28 – The Kenyan government and the Investment Climate Facility for Africa (ICF) have signed a grant agreement for Sh296,744,000 that will support the Kenya Trade Network Agency (KENTRADE) as it implements the National Electronic Single Window System in order to reduce the cost of doing business in the country.

Speaking at the signing ceremony, Finance Minister Robinson Githae said that the Single Window System will complement the government’s determination to address the inefficiencies in doing business in the country, which has caused the cost of consumer products to skyrocket for the common mwananchi.

“The number of days it takes to clear cargo through the port of Mombasa averages 10 days, while at the airport it takes an average of five days to clear urgent shipments, which have taken only eight hours to fly to Kenya,” he said.

“The story is the same at our border posts where inordinate delays are experienced in cargo crossing the borders due to inefficient clearance methods. This scenario is unacceptable and we must change,” he emphasised.

Githae explained that to address the downward trend of the country’s economy, the government has established KENTRADE to facilitate trade through the establishment of the Single Window System platform, which is meant to facilitate external trade by reducing delays and lowering costs associated with the clearance of goods at the borders.

“The objective is to reduce dwell time of cargo at the port to a maximum of three days, one day at the airport and only one hour at the border posts,” he said.

“This system will eliminate subjectivity and corruption, as it will be paperless. It will increase capacity utilisation at ports due to reduction of cargo clearance processes and it will enable the implementation of the Just In Time (JIT) concept in international logistics due to predictability of clearance figures,” he explained.

JIT is a production strategy that strives to improve a business return on investment by reducing in-process inventory and associated carrying costs.

ICF CEO Omar Issa added that they estimate that the implementation of the Single Window System will result in savings of Sh12.71 billion to Sh21.19 billion per annum for the first three years and between Sh25.43 billion to Sh38.15 billion per annum thereafter.

He explained that this will be through improved services such as the reduction in trade transaction costs, delays, inefficiencies, corruption, manual documents, demurrage, cost of capital and improved space utilisation at ports.

“The electronic single window platform will enable submission, receipting, and processing of documentation used in clearing trade-related cargo. It will be the sole entry point for lodging trade transaction documents in Kenya,” he said.

He added that the platform will provide clearing and freight forwarding agents to key trade stakeholders such as the Kenya Revenue Authority, Kenya Ports Authority, Kenya Bureau of Standards, Kenya Plant Health Inspectorate Services and the Port Health Services.

“The overall objective of the project is to facilitate international trade in Kenya by reducing delays and lowering costs associated with clearance of goods at the Kenyan borders, while maintaining the requisite controls and collection of levies, fees, duties and taxes, where applicable, on imports or exports,” he explained.

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