Posted on July, 21, 2022 at 09:08 am
As Kenya seeks to add more imports amidst the rising costs of commodities, increased permit costs and transportation, dollar shortage, and delayed clearance at border points are reducing the ease of doing business for traders.
For instance, authorities in Tanzania have increased the cost of acquiring export permits from the previous 27,000 per truck to 52,000 shillings, translating to about 93 percent.
The country has also imposed a new requirement on grain traders to get an export permit before shipping maize out of the country, in a policy shift that has locked already bought stocks of grain by Kenyan millers at the border.
The cost of transporting maize from the source markets has also increased by approximately 150 percent. As a result, the transporters are charging the equivalent of 1,500 shillings up from 600 shillings for a single bag of maize from either Malawi or Zambia. This has pushed the landing cost of a 90-kilo bag in Nairobi to 6,000 shillings.
The ongoing dollar shortage in the country poses a threat to most important sectors such as manufacturing, which rely on dollars to import key raw materials and inputs used in processing and capital goods investments.
According to the Kenya Association of Manufacturers, the situation, which is affecting the relationship between manufacturers and suppliers, is already disrupting Kenya’s reputation as an open market.
Meanwhile, a report by the Alliance for a Green Revolution in Africa (AGRA) shows that delayed pre-arrival clearances by the Kenya Revenue Authority (KRA) are causing traffic queues at border points thus reducing the ease of doing business for traders.
Kenya and Uganda are staring at another round of trade wars after Nairobi reintroduced a levy on eggs imported from the neighboring country.
On a positive note, importers and exporters in Kenya are however set to benefit from increased competitiveness and reduced cost of doing business from reduced shipment delays and demurrage charges after President Uluru Kenyatta assented to the National Electronic Single Window System Bill, 2021, on June 21.
The government has also embarked on a sensitization campaign countrywide to create awareness amongst the business community on the opportunities offered by the African Continental Free-Trade (AfCFTA), and how to exploit the openings offered.
Source: Soko Directory