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Port delays lower Kenya’s rankings

By Luke Anami | May 6th 2012

By Luke Anami

Inefficiencies at the Port of Mombasa are  to blame for the high cost of doing business, Betty Maina, chief executive officer, Kenya Association of Manufacturers, said. Maina said manufacturers’ fear the vice could lead to relocation of more investors to other countries.

“The time it takes to clear goods at the Port of Mombasa, storage and transportation has affected productivity in a number of manufacturing companies,” Maina said in an interview with The Standard On Sunday.

“Most of the raw materials are imported usually free duty. What adds to the cost is the inventory of imports at the Port of Mombasa.” She said.
She blamed bureaucracy and poor inventory for the backlog at the port.

Paper work
“There is still a lot of paper work, delays in clearing goods, and storage complications making it difficult to clear your goods in time.”

High costs of energy, infrastructure and weak Judiciary have seen a number of companies reclocate. These, among other factors, contributed to the poor ranking of Kenya in the recently released Doing Business in the East African Community 2012 World Bank report.
In the report, Rwanda is ranked position 45 globally in the ease of doing business, followed by Kenya, 109, Uganda 123, Tanzania 127, and Burundi 169.

Maina said it was competition that forced some firms to quit from Kenya.
“If you take an example Palmolive which closed and relocated three years ago, did so because similar products were being manufactured locally,” she clarified.
“Nevertheless, the cost of electricity is cheaper in Egypt. High cost of labour which is largely felt in Agriculture related companies and government agencies are still to blame for our current problems.”

Companies operating in the Kenyan Export Processing Zones in Kitengela, Athi River, Mlolongo and Syokimau made huge losses during power outages for three days.

“The losses  made in the last three days we had no  power are estimated at Sh15 million at the EPZ alone,” said Jonathan Chifalu, a public relations manager at the EPZs.

Kenya Private Sector Alliance chairperson Patrick Obath blames failure by the Government to prioritise the creation of a one-stop shop at the Kenya Investment Authority as another reasons for relocation.

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