Time and Costs of Trading Across Kenyan Borders Reduces

Kenya’s efforts in automation of key trade processes, upgrading of physical infrastructure and removal of non-tariff barriers has improved the ease of trading across borders according to a report by TradeMark East Africa.

The report revealed that time taken to trade across Kenyan borders like Malaba, Busia, Taveta has reduced by up to 80 percent. This has had a direct impact on reducing transaction costs related to cross border trade.

The evaluation report analyzed 28 projects worth US$ 90Million supported by TMEA’s Kenya Country Programme.  The Projects were implemented between 2011 to June 2017.

The evaluation results indicate a return on investment of about US$21.4 for every US$1 invested; building a case to the successes of trade facilitation initiatives that provide solutions to specific challenges.

Over this period, TMEA partnered with the Government of Kenya and the private sector and was funded by the development agencies of Belgium, Canada, Denmark, Finland, the Netherlands, United Kingdom, and the United States of America.

The report cast a spotlight on various interventions which it stated had significantly contributed to an improved business environment. They include improvements at the port of Mombasa, automation of key import and export processes within government agencies, removal of non-tariff barriers along the Northern Corridor and One Stop Border Posts.

The report noted that transporting a standard 40ft container from Mombasa to Kigali has dropped to US$4800 in 2016 from US$6500 in 2011 generating cost savings of approximately US$7m on this route alone.

Kenya border crossing times for cargo trucks at Busia and Taveta have reduced by an average of 80 percent against a target of 30 percent.

Specifically, the time taken to cross Taveta/Holili has reduced by 90% from 1 day in 2011 to 2 hours in October 2016 and time took to cross Busia has reduced by 14 hours in 2011 to 2.9 hours in June 2016.

A comparison of the time it took cargo trucks to cross from Busia Kenya to neighboring Busia Uganda between 2011 and 2016 show a 79 percent reduction in time taken. That is, from 15 hours in 2011 to 3 hours as of 2016.

Kenyan SME’s are now enjoying efficient service from Kenya Bureau of Standards (KEBS) where the average testing time of goods has reduced from 3 days in 2010 to 2 days in 2014. The bureau has also increased its product certification from 619 in 2010 to 1820 in 2014 due to the acquisition of new machines and capacity building of staff. It means, traders have their products certified for marketing across borders.

Horticulture exporters in Kenya are now finding it easier and cheaper to acquire Certificate of Origin from the Kenya National Chamber of Commerce. Automation of the document processing for the CoO has reduced from 2 days in 2014 to 2 hours in 2016 with average transaction cost reducing from US$88 to US$10. A CoO is an electronic document that is completed by the exporter and certified by a recognized issuing body, attesting that the goods in an export shipment have been produced, manufactured or processed in a country. Without out it, the goods cannot be cleared at exit points.

“These results demonstrate our committed efforts to supporting the Government of Kenya enhance trade environment, improve business competitiveness and also improve physical access to markets through the elimination of non-tariff barriers. We are happy that there is quite a significant return on investment for every dollar spent in the program,” noted Ahmed Farah, Kenya Country Director, TradeMark East Africa.

“Our strategy 2 work will be built on the successes of strategy one and will focus more on supporting innovative programmes that facilitate trade and build an enabling environment for Kenyans to do business within and across borders,” concluded Mr. Farah.

TradeMark East Africa is a not for profit agency whose aim is to promote economic growth through trade and regional integration in East Africa.