Foreign goods ordered by Kenyan traders for resale in region have risen sharply in the first quarter of the year amid dropping Indian Ocean piracy and improvement in cargo clearance.

Official data shows that trade in re-exports — foreign goods that are imported to be exported again — stood at 11.3 billion in the first two months of year, up from Sh7.7 billion in the same period last year.

The level of re-exports first went above the monthly average of Sh3 billion in November to a new high of Sh6.9 billion in November, a month after Kenya signed a pact with Uganda and Rwanda to ease movement of cargo on the Mombasa-Kampala-Kigali route (Northern Corridor).

Under the pact by the three presidents, the region has automated its cargo clearance and reduced weighbridges and police checks.

“The decision has stripped away a lot of the bureaucratic red tape that snarled the free flow of trade in the East African Community,” noted TradeMark Africa, a multi-donor trade logistics agency.

The reforms have shortened cargo haulage time on the 1,200km stretch from Mombasa to Kampala from nearly 20 days to between three and four. It takes an additional day to move goods on the 525km-road between Kampala and Kigali.

READ: Agencies ordered to speed up cargo movement

Rwanda and Uganda now collect their customs duty in Mombasa, allowing truck drivers to move freely without being subjected to time-consuming inspections.

The re-exports mainly include petroleum fuels, farm and industrial inputs, motor vehicles and equipment not produced in the region.

The rise in re-exports may also imply that the cost of importing some finished goods is cheaper than locally made products, prompting cross-border traders to turn to foreign goods for the East African market.

Exports to Uganda fell from Sh8.54 billion in the first two months last year to Sh7.89 billion this year while Rwanda bound goods remained static at Sh2 billon over the same period.

Last week, the Kenya Trade Network Agency launched an electronic single window system that allows traders to complete all the regulatory export documentation at the touch of a button, saving on time and cost.

Previously importers had to meet storage and parking costs as they queued to file regulatory documentation, a process that involved tedious paperwork lasting a couple of days.

“It is now possible for importers to avoid the costly delays at the port by making pre-arrival declaration of goods,” said Kenya Revenue Authority (KRA) commissioner-general John Njiraini.

Delays at the port and along the Northern Corridor previously accounted for up to 40 per cent of the retail price that consumers paid on the shelves for goods.

Source: Business Daily

Disclaimer: The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of TradeMark Africa.