Dar’s move to ease cargo clearance a boost to business, regional investors

Kenyan manufacturers and businesses will heave a sigh of relief following Tanzania Government decision to roll out round the clock cargo clearance at its border posts. Adan Mwakololo, a customs and excise officer’s announcement that Tanzania was determined to follow Kenya’s example and clear goods on a 24-hour basis is good news for local businesses and potential investors interested in making Kenya the hub of their operations in the East and Central African markets.

The current goods clearance regime means that truckers have to wait for 27 hours before they can enter into Tanzania. Interestingly, the Tanzanian truck drivers entering Kenya wait for only two hours. Tanzanian reforms come in the wake of the operationalisation of a One-Stop-Border-Post (OSBP) where relevant State agencies from both sides of the border harmonise customs procedures.

Evidence from the border posts between Kenya, Uganda and Rwanda where the OSBP has been implemented suggests that the savings on time lost due to repetitive procedures is huge. The implementation of the OSBP also comes with a sharp reduction in corruption because most of the procedures are automated and leave little room for negotiations between truckers and customs officers.

The hope is that Tanzania will also embrace the Single Customs Territory regime introduced by Kenya, Uganda and Rwanda last year which seen a 50 per cent drop in the cost of doing business. The result has been the drop in the cost of doing business. One does not have to be a crystal gazer to conclude that the resultant competitiveness of goods produced locally is the reason foreign investors are lining up to make Kenya their hub for the regional market. The first to spot the emerging opportunities were the British investors who late last year visited the country and pledged to invest over Sh50 billion in the country’s private and public sectors.

The US multinational firm Wrigley, broke ground for a Sh5.8 billion manufacturing plant in Machakos County, in April, this year. But the icing on the cake was China’s announcement a month earlier that Kenya had beaten Ethiopia and Tanzania to become its preferred African industrial nerve centre.

 These were only a few of the tangible benefits the country is reaping for reforming its business environment and stepping up modernisation of infrastructure which has seen it lead its regional peers. The fly in the ointment, however is that many of these gains may be frittered away unless the Industrialisation and Enterprise Development ministry drastically scales back, if not entirely eliminating, trade in counterfeit goods.

It is no longer enough for the ministry to decry lack of human and financial resources. This follows  Principal Secretary in the ministry Wilson Songa’s the admission last week that the Government has committed to substantially fund its counterfeit and intellectual property agencies.

 

More counterfeits

What Kenyans are waiting to see how the ministry officials fighting the menace that is not only robbing Treasury of billions of shillings in lost revenue because counterfeits are smuggled into the country but also steals the jobs of millions of Kenyans.

Ministry officials cannot do the job alone. They require cooperation from other State agencies, especially customs and the police. This was demonstrated in the recent incidents where ivory worth millions of shillings was smuggled through Mombasa Port. But the ministry must take charge.

If Parliament needs to strengthen the laws governing the sector, so be it. Let the AG be notified and set the ball rolling, otherwise, the trillions of shillings spend to improve competitiveness and attract local and foreign investors may fail to yield the expected dividend.