To facilitate trade across borders and enhance ease of doing business, there is need for the simplification, modernisation and harmonisation of export and import processes and procedures. Trade facilitation reduces the time to clear goods and cost of movement of goods and services across borders, and thus contributes to ease of doing business, which in turn stimulate growth and reforms for a country’s economy.
The main aim of trade facilitation in Customs is to expedite movement, release and clearance of goods across borders whilst ensuring safety and security of the trade supply chain. Trading Across Borders (Tabs) is one of the 12 World Bank trade facilitation indicators under the Ease of Doing Business Index. As at June 30, 2021, Kenya was performing at 98 percent in as far as implementation of Tabs reforms is concerned.
Trade facilitation measures entail reform and modernisation processes geared towards creation of a business enabling environment. This encompasses different types of interventions and activities put in place by the government to address the bureaucratic delays and “red tape.”
The current Tabs case study for Kenya examines border and documentary compliance of the exportation of tea, coffee, spices, herbs and importation of brand new motor vehicle spare parts. Kenya Revenue Authority in collaboration with other partner government agencies have put in place various measures and frameworks to ensure a seamless, easy and cost effective transnational trade.
Key Tabs reforms include the implementation of Green Channel for exportation of selected crops and importation of brand new motor vehicle spares, reduction in the number import and exports Customs clearance documents, full roll out of Integrated Customs Management System for exports and the implementation of integrated Customs Management System in processing of Import Declaration Form.
Other reforms are the elimination of pre-shipment inspection by Customs for exports, establishment rail scanner at Port Reitz Mombasa and Drive-through smart gates fitted with scanners at Inland Container Depot Nairobi to reduce truck queuing time and waiver by Kenya Bureau of Standards of the requirements to obtain a Certificate of Conformity for importation of brand new motor vehicle spare parts saving importers $260 and 144 hours.
As a result of these reforms, several trends in international trade and logistics have been witnessed. These trends are seen through improved trade in manufactured goods including developing countries’ imports and exports as well as globalised production processes whereby businesses now trade more and more in intermediate goods with a growing share of inter-company trade.
The more businesses want to sell and source abroad, the more they benefit from trade facilitation measures that foster transparency and use of international standards.
Finally, the potential of new technologies and trade facilitation measures such as the Single Window, electronic documents or Customs automation are all easier to implement today compared to a decade ago.
Lilian Nyawanda is the Commissioner for Customs and Border Control at the Kenya Revenue Authority.