The long-awaited Kenya National Electronic Single Window System (KNESWS), expected to improve the movement of goods across the borders, went live last night.
It has been, partly, integrated with those of Kenya Revenue Authority and the National Payment System allowing for electronic settlement of due taxes and payment of fees on a pilot basis. Full integration with the National Electronic Payments Gateway is scheduled for completion by December 2014.
The pilot stage involves 10 out of the 24 government agencies involved in cargo clearance at the country’s seaports and airports.
The documents which importers and exporters in the pilot project will lodge electronically include licences, import declaration forms (IDF), sea and air manifests. The transactions will be rolled out to a selected number of shipping lines, clearing and forwarding agents, importers, exporters, banks and insurance companies. The analysts’ optimism that the introduction of the Single Window System will make the country more competitive as a business destination is heightened by the realisation that the same system is used by countries like Singapore, Korea, Malaysia, Mauritius, Tunisia and Ghana — and all enjoy high global rankings of ease of doing business.
Kenya is not only ranked near the bottom but even more galling for a country that has been at peace while the others went through periods of civil wars, its neighbours, Uganda and Rwanda, are ranked much higher.
Studies from these newly-industrialised countries suggest that the system will realise huge savings, reduce trade transactions costs, reduce delays and inefficiencies, eradicate corruption in trade logistics by either doing away with manual documentation and paperwork or reducing their use to a bare minimum.
This will, in turn, reduce the cost of capital, eliminate the need to pay huge demurrage charges and raise utilisation of space at the seaports and airports ensuring better turn-around times for ships and aeroplanes.
It has been estimated that the yearly savings to the Kenyan economy during the first three years will range between Sh10.5 billion and Sh17.5 billion per year. These sums are estimated to rise to between Sh21 billion and Sh31.5 billion in subsequent years.
These savings are hugely significant when it is considered that the National Treasury risked driving up the cost of living and inflationary rates to unsustainable levels earlier this year in its drive to raise Sh10 billion from the re-introduction of Value Added Tax (VAT) on essential commodities. While the jury is still out on the damage caused by these new taxes, it is clear, however, that many a trader took advantage of their re-introduction to increase prices on items that are not covered by the new tax law.
The good news is that Kenya is not introducing the single window system alone. The country’s trade partners, especially Uganda, Rwanda and South Sudan have also been roped into the system for mutual benefit.
Equally significant, the new system is being introduced in tandem with other measures such as the elimination of weigh-bridges and the building of a new standard-gauge railway line.
And all are aimed at reducing the cost of doing business all round with the final consumer being the major beneficiary.