Rwandan clearing agents told to register firms in Kenya

Friday March 27 2015

Containers at the port of Mombasa. Rwandan clearing and forwarding agents have been advised to register their firms in Kenya to reduce cost of empty containers. PHOTO | FILE

Containers at the port of Mombasa. Rwandan clearing and forwarding agents have been advised to register their firms in Kenya to reduce cost of empty containers. PHOTO | FILE NATION MEDIA GROUP

By KABONA ESIARA, RT Special Correspondent

Rwandan clearing and forwarding agents have been advised to register their firms in Kenya to reduce cost of empty containers.

Rwandans pay Rwf1.3 million for each a 20ft container and the amount doubles for a 40ft as security to the shipping lines before the containers are allowed to leave Mombasa for Kigali. This adds to the cost of consumer goods and cost of doing business.

For instance, when a Rwandan clearing agent handles 00 containers of 40ft, he will have to deposit $400 million with a shipping line.

This amount is held by the shipping lines until the container is returned to the port.

However, clearing agents complain that shipping lines delay to refund the money, which had been deposited.

The clearing agents further complain that the capital requirement is huge, which locks out many small clearing firms from big deals. Such business is taken up by multinational clearing and forwarding firms.

It is against this backdrop that Jean Baptiste Gasangwa, Rwanda private sector representative at Mombasa port told Rwanda clearing agents to register in Kenya to avoid paying extra costs.

“The Rwandan companies will benefit from the revolving container depositary system Kenyan agents enjoy,” said Mr Gasangwa.

These are some of the challenges that have persisted despite reforms meant to expedite movement of transit cargo along the Northern Corridor and clearance at Mombasa port. Delays in submitting the ships’ manifest and manifest numbers by shipping lines is another challenge, which leads to delays in documentation and deliveries.

The challenges have remained and new ones keep coming up adding to the cost of doing business in landlocked countries, Mr Gasangwa said.

Rwandan importers also complained about the lengthy clearance time occasioned by constant breakdown of the information and communication technology infrastructure and congestions at the port.

The frequent system breakdown at the port and Kenya Revenue Authority systems result in delays in processing, loading and releasing containers from the port.

John Bosco Rusagara, chairman of the Rwanda Shipping Council also pointed out that congestion at the port is increasing and ships have to wait longer before being cargoes are offloaded.

Drop in volume of goods

This, he said, could explain why there was a drop in the volume of goods Rwanda imported through Mombasa port in last year compared with 2013 as importers become jittery about the delays at Mombasa port.

Data from the Kenya Ports Authority indicates that 235,912 tonnes of cargo destined to Rwanda was handled last year against 240,099 tonnes in 2013, a marginal decrease of 4,187 tonnes.

The port handled 7,199,140 tonnes last year against 6,709,236 tonnes realised in 2013 with Uganda being the leading user of Mombasa port among the landlocked countries.

Traders further blamed tedious inspections and checks by Customs officials, which account for 80 per cent of the cargo dwell time.