Multiple documentation, corruption and lack of a one-stop location to comply with trade requirements are hindering growth of the export sector, stakeholders have said.
According to Kenya Association of Manufacturers (KAM) CEO Phyllis Wakiaga, the current export sector regime is also characterised by costly logistics and regulatory requirements, which are hurting the industry.
John Maina, the CEO of Youngline Clearing and Forwarding, has been in the export business for 15 years and lists these factors as the biggest hurdles to growing the volume of goods Kenya sells abroad.
Kenya’s total share of the world’s exports stood at a dismal 0.03 per cent in 2014.
“The documents needed are just too many. For instance, in 2000, there was a one manual form, the C29, which could be picked from the Government printer and filled in five to 10 minutes. It contained all the information one needed to export cargo,” said Mr Maina.
“But today, you need to fill about six forms, which are found in different offices that are far from each other. There’s the invoice, parking list, customs entry, and GSP certificate for general cargo.
“If you’re exporting fresh horticultural supplies, in addition to the four forms, you also need documents from Kephis [Kenya Plant Health Inspectorate Service] and HCDA [Horticultural Crops Development Authority], whose offices are in different places.”
Online platform
Sector players are now calling for a one-stop shop for export companies to reduce the costs of doing business.
“The documents don’t cost much at an average of Sh4,000, but the time spent picking them and submitting them is a hindrance the export sector does not need,” Maina said.
The Government, however, has made efforts toward integrating all necessary documentation on the Kentrade online platform, but Maina said this has not borne much fruit as the system relies on Internet connectivity, which is sometimes patchy or unavailable.
In a 2014 study titled ‘Barriers to trade: The case of Kenya’ that was published in Connecting to Global Markets: Challenges and Opportunities, respondents noted that too many institutions were involved in approving exports.
They also singled out the hurdles of administrative levies, arbitrary or multiple documentation, lengthy classification and valuation of export processes, and corrupt practices.
Further, 83.3 per cent of respondents cited lengthy classification, lengthy clearance processes and corrupt practices as having severely impacted on their businesses.
Corruption acts as a form of tax, hence reducing respondents’ profits, increasing the costs of production and hindering the movement of goods.
The good news is that KAM is working collaboratively with Government agencies to improve systems and build up exports.
“Together with these agencies, we are developing more streamlined solutions for our members to increase their competitiveness within the region,” said Ms Wakiaga.
“We are also looking into mainstreaming transparency, analysing risk and including genuine stakeholder consultation in regulatory processes, as these will ultimately lead to the formulation of better policies, easier implementation, as well as less opportunities for corruption.”
