KenTrade has successfully implemented 18 modules and their functionalities with the remaining two undergoing User Acceptance Testing (UAT) and piloting.
After nearly one and a half years since the National Treasury directed that all imports and exports related documents be processed through the cargo online platform- Kenya TradeNet System- the cost of doing business has recorded a significant drop.
Generation of the preclearance documentation- Sea Manifest, permits and licenses- is now being done online by 30 Partner Government Agencies (PGA) that have been brought on board since the System went live in October 2013.
KenTrade, the implementing agency, in a recent study carried out by CDCL consultants to assess the System’s impact since its roll out shows that traders seeking Import Declaration Forms (IDF) are saving over 35 hours. Those seeking permits and Sea manifests are saving 62.29 and 26.09 hours respectively compared to when they employed manual system. With it comes the cost saving of Sh 595.5 per transaction to process IDF and Sh 1031.50 and Sh 422 to process a single permit and manifest respectively.
“The number of steps in processing clients’ application has reduced by almost 50 percent with the average number of documents required for processing applications going down by 30-50,” KenTrade Chief Executive Officer Mr Amos Wangora said.
Time taken to process clients requests has reduced with some agencies such as Dairy Board recording a reduction of over 50 percent, Mr Wangora noted, adding that the clients no longer needs to physically visit government agencies to solve cargo clearing related problems.
Todate, KenTrade has successfully implemented 18 modules and their functionalities, with all the key PGA involved in issuance of import and export trade related documentation having their processes automated via the Kenya TradeNet System.
The remaining two modules namely duty remission and declaration are undergoing User Acceptance Testing (UAT) and piloting respectively. The roll out of the duty remission modules means that the stakeholders will be able to apply for duty remission and get approval electronically.
“The roll out of the declaration module will activate the cargo release module that will enable importers/exporters to track the process of their documents electronically, enabling them to know which agencies are causing delays,” Mr Wangora said, adding that this will now mean the envisaged full implementation of the system and enjoyment of all its benefits.
Apart from benefits accruing to the shippers, the first clearance of the goods has increased value of the revenue to the government since tax is collected once documents are submitted without delays.
Principal Secretary to the National Treasury Dr Kamau Thugge recently said that the government looks forward to increase revenue yields through efficient collection of taxes and levies enabled by the online system.
“Experience in countries operating mature Single Windows shows that our economy stands to save US$ 150 million to US$250 million in the first 3 years of a mature Single Window and US$ 300 million to US$ 450 million per annum thereafter,” Dr Thugge said.
There is very minimal physical interaction between the shippers and service providers reducing incidences of corruption, another significant benefit according to Mr Wangora. Compliance levels have gone up in PGAs since they have more control over the products they regulate, closing loopholes that unscrupulous traders used to swindle the government.
“With paperless processing and approval of permits, PGAs officers are able to work from anywhere even when attending seminars and workshops. This has eliminated the need for the business to wait for the officers at their offices,” according to Mr Wangora.
An integrated Risk Management System is available for the use by the PGA to help interveners in expediting the process. This has reduced subjectivity and increased objectivity in cargo targeting and verification, recording a significant reduction of the workload.
The Kenya TradeNet System has been created using adaptable technology. The system can therefore interface with other systems and will be able to accommodate the many dynamics that are emerging in the industry such as the recent new requirement by the government that cargo will only be cleared after the importer declares proof of local marine insurance procurement.
“The system is interoperable and can easily interface with other systems effectively. Therefore there is no cause for alarm to the industry in this regard,” Mr Wangora said.
KenTrade also hopes to leverage on Integrated Customs Management System (iCMS) being implemented by Kenya Revenue Authority (KRA) that is expected to replace the 10 years old Simba System.
“Integration will resolve some of the challenges encountered when exchanging messages with SIMBA system. The system has been developed using modern technology and this will definitely result to better performance when integrated with TradeNet System,” Mr Wangora said.
The intention to integrate the TradeNet system with the KRA’s Real Time Monitoring System for the automation of the One Stop Border Post (OSBP) has now taken baby steps. KRA has been implementing RTMS to streamline border processes. In order for RTMS to receive cargo releases from PGAs, there has been the need to integrate the two systems.
“The integration is aimed at addressing the current challenges at the exit and entry border points brought about by the absence of information sharing among stakeholders. A joint team of KRA and KenTrade has finalized the development of the system requirements and the system development has already commenced,” said Mr Wangora.
With the East Africa region embracing joint infrastructural projects, there are hopes that the online cargo clearing platform will go regional. Kenya, Rwanda and Uganda have already implemented their National Single Window Systems while Tanzania is following suit.
“The EAC secretariat is leading an initiative towards establishment of a regional single window system. Consultancy work is ongoing to develop a strategy for the regional platform and expectations are high that Kenya’s vision of having an EAC regional Single Window System will be established and realised,” Mr Wangora said