Cost of doing business in East Africa down by 50pc as reforms reduce red tape

Kenya: The Single Customs Territory (SCT) regime introduced by East African countries a year ago has reduced the cost of doing business by about 50 per cent in the East Africa region, according to Kenya Revenue Authority (KRA).

The system has reduced the time taken to move cargo across the region from 18 days to three between Mombasa and Kampala and 21 days to six between Mombasa and Kigali.

Addressing Mombasa port users at a Mombasa hotel, KRA Chief Manager Customs Service Department, Ebby Khaghuli said it has taken political goodwill to achieve the high performance in cargo delivery in the East African Community (EAC).

In a presentation on the SCT status, Ms Khaghuli said the new system was achieved through great sacrifice by the states because no consultants or donors were involved in the process. She said the human and financial resources were met by each customs administration.

The system is being implemented by revenue authorities in Kenya, Uganda, Rwanda and Burundi amid protests from Kenyan clearing and forwarding agents who claimed it has cost them jobs and business opportunities.

"An analysis in EAC region has shown that the SCT has reduced the cost of doing business by about 50 per cent since implementation and the time taken to move cargo across the region from 18 days to three from Mombasa to Kampala, and 21 days to six days from Mombasa to Kigali. It takes political goodwill to achieve what has been achieved in the EAC region," Khaghuli explained.

Speaking in Mombasa last week, Kenya Ports Authority Managing Director Gichiri Ndua (pictured) said port productivity has improved significantly as cargo dwell time reduced to 3.9 days in 2014 from 4.9 days in 2013.

Turnaround time

He, however, said average vessel turnaround time remained the same at 3.5 days in 2014 and 2013 yet there was an increase in the number and sizes of the vessels that called at the port.

"Total cargo traffic increased by 11.5 perbcent from 22.307 million tonnes in 2013 to 24.87 million tonnes in 2014," Mr Ndua said.

According to Ms Khaghuli, SCT is a stage towards full attainment of the Customs union achievable by the removal of restrictive regulations or minimisation of internal border controls on goods moving between the partner states with an ultimate realisation of free circulation of goods.

For exports, declaration is done in importing State before release. Cargo going outside the region is cleared under the transit regime.