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Economy

Electronic clearance to boost competitiveness

The government will in less than three weeks roll out an electronic clearance system hosting all government agencies under one shop.

Officially called the single window system (SWS), it is expected to cut time used in clearing from Mombasa port, a process viewed as a major contributor to Kenya’s lack of competitiveness, and according to its promoters, save the economy nearly Sh22 billion in the near term.

Up to now a multiplicity of agencies has been shuffling paper, at times working at cross-purpose with each other. With banks, clearing agencies and State agencies now housed under one-online system, players are hopeful that trade, especially on the Northern Corridor which serves the Great Lakes region countries will be less painful and costly.

KenTrade chief executive Alex Kabuga told the Business Daily why Kenya can expect major savings from the joint State-Investment Climate Facility project.

Briefly tell us how the SWS will practically work especially in terms of hardware, software and manpower

The SWS is an electronic platform that will integrate or interface the electronic systems of stakeholders involved in the cargo clearance process including Kenya Revenue Authority (KRA), Kenya Bureau of Standards (Kebs), Kenya Plant Health Inspectorate Services (Kephis), Kenya Ports Authority (KPA) and Port Health.  

This facility will enable parties involved in trade and transport to lodge standardised information and documents with a single entry point to fulfill all import, export, and transit-related regulatory requirements.

In terms of hardware/software, the system will encourage interoperability in the systems of stakeholders involved in trade logistics.

The single window system is Internet-based and will be accessible 24/7. Stakeholders will be able to submit electronic documents from anywhere at any time as long as they have the relevant authorisation in the system. The country will save a lot in manpower/man hours as  there  will  be no need for submission and processing of hard copy documents which are manual and expensive.

When it comes to automation, KRA has its own online clearance system called Simba. KPA has had its online system called Kwatos for some time now. So what difference does more automation and centralisation make?

It is not only KRA and KPA which are involved in cargo clearance. There are more than 24 other government agencies and departments involved in the import, export and transit cargo clearance processes in Kenya — some have systems while others have manual processes.

The single window system will not replace the KRA’s Simba or KPA’s Kwatos but will integrate with the two among others.

Apart from integrating with these systems, the Kenya National Electronic Window System (KNESWS) will create a single electronic platform for submission or approvals of cargo clearance documentation and provide an electronic platform for the other agencies to operate efficiently.

In addition, the single window will integrate with the National Payments System via a payments gateway to facilitate online payments for trade documentation which will provide an end-to-end trade logistics process in Kenya.

So which are the other agencies involved?

Nine government agencies out of 25 that form the principal interveners in the trade process were identified to partner with KenTrade in the initial roll out phase. They are KRA, KPA, Kebs, Kephis, Tea Board of Kenya, Pharmacy and Poisons Board, Horticultural Crop Development Authority, Port Health and Department of Veterinary Services.

The reason for starting with these agencies was mainly to manage the scope of the project and use the few as a pilot to ensure the System is working optimally before rolling it out to the rest of the government agencies. But the planned schedule is to have all the 25 government agencies involved in trade logistics to be on the system by the end of April 2014.

There is still a logistics (cranes particularly) problem of loading cargo at the Mombasa port where a lot of human influence as opposed to efficiency makes the difference. How do you intend to go round this?

There are two main infrastructural problems that contribute to delays and congestions at the port: the physical infrastructure and the soft infrastructure (documentation). The government is addressing the problem of the soft infrastructure through the implementation of the Sh290 million KNESWS.

The problem of the physical infrastructure is being addressed through acquisition of new equipment, construction of railway network as well as setting specific targets for each stakeholder through signing service level agreements.

In terms of customs clearance, we know that the issue of whether (and how fast) to scan cargo or not is partly determined by the human influence. As all cargo cannot go through the ‘green channel’ or express counter, how realistic is your aim to cut the clearance time to just three days?

The SWS will have a Dynamic Risk Management Module. This is an intelligent system that will enable targeting of cargo based on pre-determined profiles by the various government agencies.

The system will then automatically flag consignments as green, red or yellow once certain parameters are met hence eliminating or reducing the need for human interventions. Experience elsewhere has shown that this is achievable. For instance, the Port of Singapore is able to handle more than 30 million containers per annum using similar systems.

How are you coordinating the multiple government agencies, some of whose officers are beneficiaries of the inefficiency? Is there more cooperation or resistance to the idea?

One of key success factors in implementation of any system is stakeholder’s involvement and investment in change management. We ensure that we are in constant engagement with our stakeholders at every stage of System implementation.

In addition, KenTrade has partnered with like-minded organisations such as Kenya Freight and Warehousing Association, Kenya National Chamber of Commerce, to ensure training and communication of the correct information to the stakeholders to align any fears arising from and misconceptions on the KNESWS.

Fortunately, most stakeholders are now aware of the SWS and its anticipated benefits and are supporting the initiative.

The single window system is bought from Singapore Cooperation Enterprise (SCE). What are the safeguards for smooth maintenance skills’ transfers?

The SCE through their implementing agency Crimson Logic will not run the KNESWS in Kenya. The SWS will be operated by KenTrade. Crimson Logic will provide system support over the three-year period. The plan is to have Crimson Logic train and build capacity for KenTrade to be able to fully operate KNESWS.

You have talked of massive savings in the three years. How did you determine such amounts are lost and where? Isn’t your system still manipulable through wrong entries?  

First, Kenya is not the first country to implement the system. Such systems are in operation in Singapore, Mauritius and Ghana to mention but a few. Studies from these countries indicate large savings to the economies through reduced trade transaction costs, delays, inefficiencies, corruption, paperwork, cost of capital (JIT Concept), demurrage and improved space utilisation at ports.

Second, chances to manipulate the SWS are very slim. Just like any other system KNESWS is putting in place robust security measures using the most current technologies available.

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