By Prossy Nandudu
The lack of knowledge about import procedures by traders and importers is increasing the cost of doing business on the part of Ugandan businessmen at the Kenyan port of Mombasa and within the East African Community (EAC) at large.
This observation was made by the representative of Ugandan business community in Mombasa, William Lusabya Kidima recently on the sidelines of the launch of the Mombasa community charter in Mombasa.
As a result, Ugandan businessmen fail to clear their goods in time, attracting penalties which further reduces the scale of would-be profits from any given consignment or container.
Kenyan president Uhuru Kenyatta attended the launch, during which he called on implementing agencies to ensure that the charter is put to use.
Kenyatta also called for closer monitoring of projects under the charter electronically for proper accountability.
“This is the only way we shall hold responsible implementing agencies accountable when objectives of the charter are not met to prevent cases where nice documents are shelved, claiming there is no money for implementing and yet East African Economies depend on the efficiency of this port through the charter for improved cost of doing business,” he said.
It is estimated that out of all the containers and goods auctioned at the port of Mombasa due to non-payment of charges that come along with delays in clearing, 99% of these belong to Ugandan traders.
“What happens is that Ugandan businessmen prefer paying for the shipped goods when the ship has docked, and yet by the time they discover the ship has docked through their agents at the port, it is like a month after it docked, meaning the goods could have already attracted penalties for overstaying at the port,” explained Lusabya.
Under normal circumstances importers are supposed to clear all charges of the goods as soon as they load them on the vessel from the country of imports, an issue that has been ignored by Ugandan importers.
“Instead of getting the shipping documents to Mombasa before the ship arrives, they wait until the ship has docked to send the documents. That is when they try to clear but by that time, the container has already has incurred penalties.”
Kenyan president Uhuru Kenyatta attended the launch of the Mombasa community charter in Mombasa
However delays in payment attract a surge charge through a process called remarshaling which is aimed at punishing those who fail to clear their containers in time.
When an importer doesn’t clear his goods in time, he/she is required to pay USD165 for a 40-foot container and USD110 for a 20-foot container on the first day after the nine-day grace period.
Starting on the third day after the grace period, importers pay USD70 for the following seven days. Then after the seventh day, the fee goes up to USD90 for the next day s until an importer clears his/her goods.
According to the Ugandan business community representative, the launch of the Mombasa Port Community charter will bring together all clearing agents and authorities at the port to find a way of working together so that some of the charges that importers pay in terms of penalties can be discussed collectively as a means of reducing the cost of doing business.
The chairman of the Mombasa Community charte, Gilbert Langat, explains that the charter seeks to provide an innovative monitoring and evaluation framework with a performance dashboard for ease in analysis, policy and operational decisions and interventions.
The charter was developed with support from Trade Mark East Africa (TMEA), aimed at facilitating trade in the region according to the Chris Kiptoo from TMEA.
“The charter will address some of the external constraints that might hamper successful implementation of other projects under the partnership,” said Kiptoo.