PSI Should End Soon

PRE-SHIPMENT inspection is hated by Ugandan importers. It adds to costs and causes unnecessary delays. Any benefit goes to government not to the private sector. Exporters do need pre-shipment inspection because they want to get paid as soon as their crops are loaded onto trucks, trains or planes. But because exports are not taxed, they are free to use whichever inspection company they prefer. Several specialists in Kampala cater for the different agricultural exports. The rationale for PSI is that the company inspects goods before they are shipped and verifies their true value. This prevents importers from under-invoicing their goods to reduce the import duties payable. Unfortunately in many cases the PSI companies are not very efficient. They arbitrarily uplift the value of goods to justify their existence to the Ministry of Finance and delay in visiting suppliers abroad. The Uganda Investment Authority, the Uganda Manufacturers Association and the Uganda Exporters and Importers Association are all keen to get rid of PSI, not surprisingly since it adds 0.8 per cent on to the cost of their imports. However government has always resisted the pressure to scrap PSI believing that the URA cannot be trusted to check the value of goods entering Uganda, even if its inspection facilities are beefed up. So Uganda remains one of the sad 30 countries in the world that has to have compulsory PSI. Now help is at hand. The World Trade Organisation and GATT have decided that PSI is a restraint on trade and will not be permitted among its members (The New Vision, 22 February, P22). By 2003, God willing, PSI will be history in Uganda. Hallelujah! Imports will become almost one per cent cheaper. Ends