Shipping & Logistics

Kenya in African digital pact to ease movement of goods

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Trucks loaded waiting to cross the Malaba border. FILE PHOTO | NMG

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Summary

  • Kenya, a signatory to Africa’s Free Trade Area agreement now has a regional platform that facilitates faster clearance of goods at border points.
  • Other signatories are Burundi, Djibouti, DR Congo, Ethiopia, Madagascar, Malawi, Kenya, Rwanda, South Sudan, Sudan, Tanzania, Uganda and Zimbabwe.
  • RCTG-Carnet is an international customs and export-import system used to clear customs in participating member states without paying duties and import taxes on merchandise that will be re-exported within 12 months.

Kenya is among 13 African countries that have entered into a digital deal to ease movement of goods across the continent.

The countries have jointly activated the Regional Customs Transit Guarantee Scheme (RCTG-Carnet) that allows free movement of goods among signatories to the platform.

Kenya, a signatory to Africa’s Free Trade Area agreement now has a regional platform that facilitates faster clearance of goods at border points.

Other signatories are Burundi, Djibouti, DR Congo, Ethiopia, Madagascar, Malawi, Kenya, Rwanda, South Sudan, Sudan, Tanzania, Uganda and Zimbabwe.

RCTG-Carnet is an international customs and export-import system used to clear customs in participating member states without paying duties and import taxes on merchandise that will be re-exported within 12 months.

Clearing and forwarding agents will be integrated into the digital system through an app that facilitates paperless processes ending the tedious procedures that take days before goods on transit are cleared at border points.

The Common Market for Eastern and Southern Africa (Comesa) Secretary General Chileshe Kapwepwe who spoke during the RCTG launch said the platform provides access to real-time information to clearing and forwarding agents in the region.

“The App is accessible on Google Play Store and Apple Store and provides a one-stop shop for the agents in member countries to view current bond balance and active Carnets, get notifications on Carnet acquittals and expiry of RCTG Bonds,” he said.

Carnet ensures that governments of transit countries recover duties and taxes from the guarantors should the goods be illegally sold in the local market.

The new platform, which is integrated with the National Customs IT Systems, saw Carnets for customs duty and taxes for goods worth Sh200 billion in transit in the Northern and Central Corridor countries issued to clearing and forwarding agents.

Players say entry of Carnet platform regionalises customs administration over a secure regional system of control, replacing the nationally executed practices and procedures that are border-bound.

The scheme was mooted in 2012 by Comesa member states to address difficulties experienced by transport operators, freight forwarders and clearing agents , such as high cost of bond /guarantee and collaterals charged by sureties and agents, delays at border points and revenue leakage.

Through the new logistics system, Kenya is looking to expand its trade with African countries through elimination of various forms of barriers. The country is also banking on the digital system to revamp its profile as a trade and innovation hub in the region.

Last May, Kenya reported a trade deficit with Africa for the first time in more than two decades where the import bill from other African countries rose to Sh234 billion last year, an 11 percent increase from the Sh210 billion spent in 2018. Export receipts rose by a paltry three percent to Sh224 billion in the year. The increased consumption of foreign goods pushed the balance of trade to a deficit position of Sh9 billion.

“Imports from Africa rose by 11.4 percent to account for 13 percent of the total import bill, attributed to increased imports from South Africa,” states the Economic Survey 2020.