Electronic cargo clearance set to start in October

Kenya will in October automate cross-border trade procedures at ports of entry, cutting by more than half the time it takes to clear imported goods through the port of Mombasa.

The Electronic Single Window System will provide a platform for exchange of trade-related documentation and help reduce the clearance time from eight days on average to a maximum of three days.

The Kenya Trade Network Agency (KenTrade), the body charged with rolling out the virtual one-stop cargo clearing shop, says the system could save the economy Sh26.2 billion lost yearly through inefficiencies in cargo clearance.

READ: Online system to track cargo clearance at Mombasa port

“The single window platform will transform the way we do business in the country by simplifying and streamlining processes and integrating the systems of the multiple numbers of stakeholders that traders have to deal with ,” said KenTrade chief executive Alex Kabuga in an interview with the Business Daily.

“The first phase of the single window goes live in October 2013 while the second phase will be ready in April 2014.”

A single window is defined as a portal where all customs documents are lodged and payments submitted online, cutting the red tape associated with clearing goods at sea ports and border points.

The system will reduce cargo dwell time at the Jomo Kenyatta International Airport from the current average of five days to a maximum of a day and streamline clearance at land border posts to take two hours.

Kenya will become the second country in the region after Rwanda to migrate to digital cargo clearance platform.

Rwanda, which holds pole position as EAC’s favourite business destination, implemented its Sh278 million online clearing system in August last year and businesses are expected to save around Sh758 million annually on customs costs.

READ: Rwanda starts electronic goods clearance system to spur cross-border trade

KenTrade says it will cost Sh1.9 billion to roll out the single window project that is expected to increase Kenya’s trade competitiveness and cut the cost of doing business in East Africa’s largest economy.

Previous efforts to embrace technology in the clearing system have not been quite successful as the Kenya Revenue Authority (KRA) and KPA rolled out the Simba and KWATOS applications respectively which work independent of each other and cannot be integrated.

“Attempts by KRA and the port’s authority to integrate Simba and KWATOS have not succeeded mainly due to system limitations and down time,” said KenTrade.

The first phase will automate all the cargo documentation processes by integrating the systems of all the key stakeholders involved in cargo clearance such as KRA, Kenya Ports Authority (KPA), Kenya Bureau of Standards (Kebs) and Kenya Plant Health Inspectorate Services (Kephis).

Phase Two will involve integration of the Single Window System with the National Payments System (NPS) incorporating online banking and mobile money, resulting in an end to end electronic solution in trade logistics.

The port of Mombasa, the gateway to landlocked economies in east and central Africa is dogged by lengthy paperwork which results in perennial congestion and underutilisation of the port.

“These delays are expensive to the shippers and the economy because they result into incurring unnecessary port storage, customs warehouse rent, and container demurrage charges, among others,” said Mr David Mackay, the chairman of the Kenya Ships Agents Association.

“This is a cost to the economy and also makes Mombasa port uncompetitive,” said Mackay.

[email protected]