Chamber of commerce gets Sh6m reform funds

The government has started reforming the Kenya National Chamber of Commerce and Industry (KNCCI) aiming to turn it into a one-stop shop for export licenses.

The reforms, which will take five months to complete, will see KNCCI regain its key role of issuing mandatory certificates for Kenya’s exports.

Some exporters have complained of difficulties in accessing Chinese and Ethiopian markets after the government stripped KNCCI of authority to issue Certificates of Origin — a key document for export goods — and handed the function to the Kenya Bureau of Standards.

On Tuesday, the United Nations Development Programme (UNDP) released Sh6.3 million, of the Sh12 million that had been requested by the institution, to start the reform process that will include a review of KNCCI’s constitution and management structures.

“These reforms will lead to changes in the constitution of the chamber to bring it in line with that of big business federations or chambers of commerce elsewhere in the world,” said KNCCI chief executive Titus Ruhiu.

The certificate of origin is a document that confirms where export goods originate and their trade value.

The origin of goods could lead to reduction of taxes depending on bilateral trade agreements existing between trading states.

For example, handcrafts and curio goods entering the United States markets must have a certificate of origin from the chamber of commerce indicating that such goods were made by Kenyan businesses so as to benefit from tax rebates under the Africa Growth and Opportunities Act (Agoa).

The issuance of the certificates is entrenched in the International Chamber of Commerce and Industry Geneva Convention.

The document is an instrument arising from an international trade convention of 1923. Kenya signed the convention in 1965.

Chambers of commerce in all the 140 countries that are signatories to the convention are authorised to issue the document.

The Trade ministry revoked KNCCI’s authority to issue the permits in September 2005 because of mismanagement and leadership wrangles that split the organisation into two factions led by city businessman David Githere on one hand and Lawyer Kiprono Kittony on the other.

As a result, the Trade ministry commissioned reforms in the institution three months ago to streamline operations and put it in the same stead with chambers of commerce in other countries.

Fast-track reforms

The ministry will also release funds allocated under the Private Sector Development Strategy to fast-track the reforms.

The chamber of commerce is an autonomous body of private companies and manufacturing firms which lobbies governments for conducive trade policies, links investors, locates new markets, trains her members on international trade, and sources for credit facilities for members.

UNDP has already appointed a consultant to carry out reforms at the institution.

“The consultant will go around the country to collate views from business people. The first meeting will take place in Nairobi,” said Mr Ruhiu.

The issuance of the certificates of origin generated 50 per cent of the chamber’s annual income.

Officials say the institution’s operations have been hampered by inadequate funds.

KNCCI’s losses resulting from denial of the authority to issue licenses is estimated at Sh4 million annually.

The organisation charged about 0.25 per cent of the value of the export goods to issue a licence.