Businesses in Kenya benefit from improved trade facilitation
November 11, 2015
|Flowers being packed at Karen Roses ready for export
The flower business is a time sensitive enterprise, as Juliana Rono, Sales and Marketing Manager at Karen Roses, can testify. One of Kenya’s major exporters of cut flowers, Karen Roses exports over 6 tons of flowers daily to Australia, Germany, Hong Kong, the Netherlands, Russia, Sweden, and United Kingdom. The perishable nature of flowers means time is of the essence for them.
“Unfortunately, the export clearing process was very cumbersome. It involved a lot of paperwork and constant follow up to get export clearances. It resulted in a lot of wasted time,” says Juliana.
For many years, traders in Kenya faced the same challenges as Karen Roses. In order to obtain the necessary clearances to export, they had to go through a manual system of physically submitting and filing hard copies of their documents at various agencies. This was then followed by several visits to these agencies to check the status of their applications.
In the case of Karen Roses, this involved four different agencies: the Kenya Plant Health Inspectorate Services (KEPHIS) for a phytosanitary certificate, Horticultural Crops Development Authority (HCDA) for an export certificate, Kenya Revenue Authority Customs Department for customs entries and the Airline for an airway bill. This lengthy process led to delays, wastage and high transaction costs for businesses.
But all this has come to an end, thanks to the Kenya TradeNet System, a new single window trade facilitation system that will speed up Customs clearance processes for air, sea and land cargo. Launched by East African Heads of State on 2nd May 2014, Kenya TradeNet brings together all key stakeholders involved in importation and exportation of goods under one online portal. It provides a single point of entry for traders to submit and process their trade transactions, check status of requests and obtain certificates and other clearances. It makes the whole cargo clearance process simpler, faster and more transparent.
Funded by the Government of Kenya, with support from the Investment Climate Facility for Africa (ICF), and the International Finance Corporation (IFC), the new System is expected to have great impact for Kenya and the region. It will reduce delays, significantly lower the costs associated with the clearance of goods for both businesses and Government, and ultimately increase Kenya’s competitiveness. With the new system, cargo dwell time at the Port of Mombasa is expected to reduce from 8 days to 3 days; at Jomo Kenyatta International Airport from 5 days to 1 day; and at border posts from 2 days to 1 hour.
In order to avoid disruption to businesses, the Kenya TradeNet System was rolled out in a controlled environment, in November 2013, starting with a selected number of users during the piloting stage. Karen Roses was one of those pilot users.
To date 20 modules and their functionalities have been successfully rolled out on the Kenya TradeNet System and has already received a total of 1,525 transactions. Agencies that are connected to the system include Kenya Medical Laboratory, Department of Veterinary Services, Agricultural Fisheries and Food Authority, Kenya Bureau of Standards, Kenya Plant Health Inspectorate Services, Port Health Services, Pharmacy and Poisons Board, Agricultural Fisheries and Food Authority, Pest Control Produce Board, Kenya Dairy Board, Radiation Protection Board, Kenya Wildlife Services and Agricultural Fisheries and Food Authority.
Banks include: National Bank, Equity, I M, Co-operative Bank, KCB, Standard Chartered, Citi and Bank of Africa.
The Kenya TradeNet System is managed by the Kenya Trade Network Agency (KenTrade), a State Corporation mandated to facilitate cross border trade and establish, manage and implement the National Electronic Single Window System as a Vision 2030 flagship project for Kenya. According to the KenTrade Chairman, Gen. Joseph Kibwana (Ret), the new System has only winners. “I strongly believe that, this project will be key in putting Kenya as a forefront player of international trade. There are no losers only winners in this process,” he said. “I would like to thank ICF for seeing the value of the National Electronic Single Window System project and being a key partner in capacity building and in the sensitization process, among other things.”
Back at Karen Roses, Juliana could not be any happier. “I am now able to lodge all trade documentation, track their process of approval at the different government agencies and make necessary payments from the comfort of my office,” she said.
“Thanks to the Kenya Trade Net System, Karen Roses can now focus its energy on other areas of business.”
Kenya is the second country in East Africa, after Rwanda, to roll out the single window electronic system.