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Online cargo clearance portal goes live in May

Saturday April 12 2014
cargo

Kenya’s position as the regional gateway is expected to improve with the launch of an online cargo clearance system on May 2, 2014. Photo/FILE

Kenya’s position as the regional gateway is expected to improve with the launch of an online cargo clearance system next month.

The long-awaited single electronic window, which is to be officially rolled out on May 2 by President Uhuru Kenyatta, is expected to facilitate international and domestic trade at the port of Mombasa, and has been touted as the solution to the persistent delays at the port.

It is expected to reduce the time it takes to process goods through Customs at the port by half — from seven days to three days.

At the country’s airports, cargo clearance time will reduce to just one day from the current five days and at borders, cargo clearance is expected to take one hour instead of two days, sponsors of the  $18 million project said.

Kenya Trade Network Agency (Kentrade), which is implementing the project, started trials in October last year for the system that will enable traders access and pay for pre-clearance documents like impending arrival reports, import declaration forms and import/export permits online.

The system can disseminate cargo clearance documentation received from shippers to the relevant authorities via electronic means for relevant approvals and processing. It has the potential to greatly ease trade in the region.

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Based on present volume of goods imported and transited through the country, it is estimated that the resulting annual savings to the Kenyan economy during the first three years of its operation will range between $150 million and $250 million.

This will increase to between $300 million and $358 million annually in subsequent years. 

“The Single Electronic Window will allow parties involved in trade and transport to lodge standardised information and documents at a single entry point,” said Amos Wangora, the general manager at Kentrade. “It is expected that the process will end the cumbersome clearing process at the Mombasa port, airport and Kenya’s border points.”

Kenya is the second country in East Africa after Rwanda to roll out the single electronic window system. Kigali launched its automated customs online service in August 2012, aimed at reducing the cost and time of doing business with its East African counterparts.

READ: Rwanda launches electronic system to ease trade with EAC partners

Uganda on the other hand, has a business licensing portal project whose aim is to ease the cost of doing business in the country. Known as the E-registry, it is now operational and is expected to enable investors to identify and obtain licences online. 

In Tanzania, plans are underway to have a national single electronic window.

The Kenyan launch comes shortly after the roll out of a Single Customs Territory (SCT) by Kenya, Rwanda and Uganda, whose aim is to have tax on incoming goods collected at a single point of entry, in this case the port of Mombasa, and is expected to ease trade within the three countries.

Efforts are underway, spearheaded by the EAC Secretariat, to have a regional electronic single window system. A technical working group has been formed to work on the concept and make it work. 

According to Gilbert Langat, Kenya Shippers Council chief executive, the move to automate the cargo clearing process will expedite and simplify information flow between traders and government institutions, and make the clearing process seamless, while increasing efficiency.

The Kenyan single window, Mr Langat said, can now be connected to the Rwandan system and ease the clearance of cargo between the two countries. KPA estimates that the number of containers leaving the port each day is 1,223 but the company has set a new target of 2,000 containers a day.

“Other than minimising errors in data re-entries, the system will lower other business costs through the elimination of manual processes and the need for physical movement to the different departments except to collect goods,” said Mr Langat.

The new system is also expected to introduce greater transparency and accountability into the whole chain of clearing goods. 

READ: Kenya reworks port operations

“The cost of trading through the Northern Corridor will also reduce, as unnecessary costs such as inventory charges will be abolished while others like storage costs will drop,” noted Alex Kabuga, the chief executive at Kentrade. “Since the system will link all cargo handlers, it will be possible to exchange trade and logistics information.”

Mr Kabuga, however, said that the system will be fully implemented by end of the year. “The end result will be increased competitiveness in terms of increased domestic investment and foreign trade due to the simplified clearance process,” said Mr Kabuga.

While the plan is to roll out the program across all relevant government institutions involved in international trade, the Electronic Single Window project will involve the principal organisations involved in clearance of goods at the port of Mombasa including the Kenya Revenue Authority, Kenya Ports Authority, the Kenya Shippers Council, Kenya Bureau of Standards and the Kenya Plant Health Inspectorate Service.

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