Kenya reviewing trade ties: is the country panicking?

After months of uncertainty in regional commerce stemming from the political violence that had griped East Africa’s largest economy, Kenya is reviewing its trade relations with its land locked neighbours.

After months of uncertainty in regional commerce stemming from the political violence that had griped East Africa’s largest economy, Kenya is reviewing its trade relations with its land locked neighbours.

Kenyan minister of transport and infrastructure Ambassador Chirau Ali Mwakwere met with his former Rwandan counterpart Stanislas Kamanzi and members of the Rwanda private sector at the ministry of infrastructure in Kigali mid this week to review their trade ties.

The head of trade and regional integration department in Private Sector Federation (PSF) John Bosco Kalisa said the meeting was a good move to restore confidence among Rwandan traders, who had lost trust in importing via Mombasa port.

In the meeting, Rwandan traders raised their concerns covering the post- election crisis as well as those faced along the northern corridor.

The Kenya delegation that also included officials from the Northern Corridor Transit Transport Coordination Authority (NCTTCA) and, the Port Management Association of East and Southern Africa (PMAESA) responded positively to the Rwandan business community concerns.

Resolutions

Ports charges

Since many goods were stuck at Mombasa port during the post election crisis, the two parties agreed that the government of Kenya should consider the waiver of port storage charges, customs warehouse rent and container demurrage charges by shipping lines for goods that arrived during the chaos in Kenay.

Transit goods license: Before, Rwandan trucks did not have transit license through Kenya, but it was agreed that the Rwandan government shall license its trucks involved in the transportation of goods under customs control across borders. And that there is need to review the East African Customs management Act which allows trucks licensed to transport transit goods to carry import or export cargo across the EAC region on their return journeys so that they do not return empty.

Multiple weighing of trucks This delaye transportation of imports. It was therefore agreed that the trucks be weighed at the points of entry and exit. The Kenya Pipeline Company and all the petroleum products marketing companies should load petroleum products in accordance with the axle load limit.

Road toll

Rwandan traders complained that these charges were high thus increasing importation costs. The two parties agreed that the two countries’ revenue authorities should charge in conformity with the Common Market for East and Southern African (Comesa) road user regulations.

Scanning and verification

The trader complained that therre were many check points to verify axle load limits. It was agreed that scanning or verification of transit cargo should be done only when the customs seal is broken and/or where there is suspicion, as agreed upon by the Northern Corridor Authority Council of Ministers.

Axle load

Rwandan traders argued that the three axle load limits their imports. But it was however agreed that the two countries’ ministries of transport and that of roads and public works of Kenya will establish a liaison office to deal with complaints from stakeholders.

Bonds

As many freight forwarders were much affected too, by the post election crisis, the Kenyan government agreed to extend the period for the cancellation of the bonds for freight forwarders in reference to goods that were affected by the crisis in Kenya.

Container Freight Stations (CFS’s)

It was agreed that the KPA will assist transporters in the follow up of the losses of goods in CFSs if any. And the Kenyan government will review its law to allow the establishment of Rwanda CFSs beyond the current limit of 10 kilometres radius in Mombasa.

Escorts

Rwandan traders claimed that they were sometimes robbed of their goods and their trucks vandalise. The meeting agreed to expedite the replacement of physical escorts with modern electronic surveillance systems.

Is Kenya panicking?

With the quick and positive response, traders say the Kenyan government could be panicking should landlocked countries including Rwanda, Uganda, Burundi and Democratic Republic of Congo that import and export most their goods relocate to Dar es Salaam.

Justifiably, the Rwandan government and the private sector were early this year involved in intensive meetings with the Tanzanian authorities to shift a greater percentage of their imports and exports to the central corridor of Tanzania. Uganda too is said to have followed suit having suffered more than any other landlocked country relaying on the northern corridor for importations.

Kenya that is now trying to rebuild her economy would lose millions, in revenue earned from re-exports to these two countries.

Some of the problems that came up include violation of trade deals among member countries as if they were not aware of the regional bodies’ trade rules.

The Rwanda- Kenya meeting came at a time the East African Business Council (EABC), an apex body of business associations in the region had issued a statement urging partner states to institute measures to enable businesses recover the losses incurred during the last two months Kenya was plunged into post election violence.

A statement issued EABC Secretariat statement reads that loss of revenue to the businesses and their respective governments (as) all sectors, especially but not limited to manufacturing, export, import and tourism were affected therefore need compensations.

The Secretariat therefore suggested governments to give waivers on taxes and other charges, including VAT and port demurrage to help businesses recover.

However, even if the meeting and its resolutions seem to be a sign of panic by the Kenyan government, the move will ease doing business in the region and make East African economic bloc an investment destination.

The author is a private analyst

Contact: eddiemukaaya@yahoo.com

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