Private Sector to address high cost of business

The Private Sector has been challenged to address business issues that have made the cost of doing business in the country to remain high.

Trade and Industry Principal Secretary Dr. Chris Kiptoo singled out high fees and charges, duplication of inspections, licensing system in state corporations, import and export procedures and customs process and procedures as areas that need urgent interventions.

Dr. Kiptoo said it was very costly to transport goods within East Africa, noting that the cost of transporting export goods were 30 percent higher than it is in Southern Africa, and 60 to 70 percent higher than in developed countries.

Despite the efforts to open to more markets for our goods, the returns on our efforts sometimes disappoints due to the failing logistics infrastructure, added the PS.

According to the World Bank Report of 2017 on ease of doing business, Kenya’s standing has improved by 21 places, and is placed at position 92 out of 190 countries surveyed, with Mauritius and Rwanda at positions 49 and 56 respectively.

He at the same time noted that for Kenya to leverage its strategic position as a gateway to the neighbouring regions and regional blocks, his ministry had developed a regional integration strategy that will redistribute benefits amongst all stakeholders and players.

The aim of this strategy is to help us consolidate and expand our exports market, as well as help us achieve a sustainable economic growth and development, said Kiptoo.

He noted that the country’s current exports to the regional markets accounts over 40 percent of the total export value, with the East African Community (EAC) and the Common Market for Eastern and Southern Africa (COMESA) markets combined representing 80 percent of the total export share.

The PS was speaking Tuesday at the launch of the 2016 East African Logistics Performance Survey (LPS) by Shippers Council of Eastern Africa (SCEA) at a Nairobi hotel.

The function was attended by the PS State Department of Shipping Nancy Karigithu and her counterpart, State Department of East African Affairs Betty Maina.

Dr. Kiptoo said the LPS was a vital advocacy document for the Council as it will help to champion improvement of the logistics environment and enhance trade competitiveness in East Africa.

He added that besides the LPS tracking quantitative and qualitative indicators of logistics performance in the region in terms of costs, times and complexities, it also assists researchers and logistic managers with information for negotiations and contracting.

Dr. Kiptoo also urged the private sector and SCEA to enhance logistics capabilities, develop and rehabilitate physical infrastructure, as well as streamline trade related procedures as a measure to reduce costs of imports.

This, he noted, will enable the business community to explore new opportunities.

Chairman Shippers Council of Eastern Africa Mr. Meshack Kipturgo said the Council was in the process of concluding a study on the competitiveness of Airfreight industry in the region, which they will provide to government agencies and industry stakeholders.

Mr. Kipturgo said the Council was not happy with the way penalties and charges for damaged containers were being handled and called on the relevant authorities to rectify the issues.

These penalties are being applied selectively, as the cost is passed to the shippers, thereby increasing the cost of doing business, he added.

PS Nancy Kirigithu said the State Department of Shipping has plans of strengthening and widening the maritime sector to make it a real blue economy as it has become one of the facilitators of the country’s economic pillars, besides offering a wide range of trade opportunities.

She however, lamented that delays being witnessed at the document processing Centre were due to poor documentation by those sending cargos.

These delays have been caused by failure for payments to reflect in the system, improper products description and falsified documents, stated Karigithu.

The PS urged shippers to always ensure that they observe timely payment of duty, adherence to proper documentation and attachment of requisite supportive documents for speedy clearance and approvals.

Source: Kenya News Agency