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Kenya: Given due attention, import/export sector will boost economyWednesday, April 15, 2015 > 09:58:48
(Standard Digital by William Ojonyo)
International trade the world over is the backbone of much-needed foreign exchange inflows, which boost economic growth. But in Kenya, not enough is being done to ensure the country exploits the full potential of international trade.
In any working economy, the service industry will always be an indicator of good or bad times. International trade logistics in Kenya should be a part of the service industry that can be used, at a glance, to determine the trend of the economy. Unfortunately, the key drivers of this industry are either being ignored or have accepted the position of remaining largely disorganised. As one of the players in the multi-billion-shilling freight forwarding industry, better known as the clearing and forwarding industry, I believe that if it were better supported, it would have a greater impact on economic growth. TAX COLLECTION Clearing agents have enough business given the proximity of the Mombasa Port to our regional neighbours, and the millions of containers evacuated annually for local and regional consumption.
This, converted into revenue in terms of tax collection and related dues, translates to billions of shillings. The requirement that all transactions be handled by clearing agents means that to secure the industry’s earnings, the freight forwarding process must be professionally run. All stakeholders must uphold business conduct that is above reproach to achieve a more successful and robust clearing and forwarding sector. There is more than enough in the freight logistics sector to sustain and grow the Kenyan economy; all that needs to be done is for the industry to insist on professional, well-trained cargo handlers with integrity. A quick survey indicates that about six vessels with a capacity of between 2,000 and 3,000 cars call at the Mombasa Port monthly. If you include containers and bulk-cargo vessels, this translates to more than 10,000 cars and containers transiting the port to different destinations, with clearing agents handling billions of shillings in fees and disbursements monthly. If well managed and regulated, the industry is capable of giving the country better returns, both in terms of wages and revenue. Given requisite attention, as is the case in most developed countries, the private sector’s greater involvement in freight logistics may just provide a way to reverse the high inflation rate wreaking havoc on household budgets.
As clearing agents, we must quickly retreat to regulate the private sector and purpose to train our personnel to work hand in hand with the public sector — led by the Kenya Revenue Authority and Kenya Ports Authority — to ensure a more vibrant and productive industry. More trained personnel handling cargo will result in better efficiency at the port and other related frontiers, translating to more revenue. Regional confidence would also be enhanced, which would see the Mombasa Port become the port of choice.