Freight Logistics Issue 5

LOGISTICS

A Magazine for the Federation of East African Freight Forwarders Associations

Freight Logistics | ISSUE 5

Vol. 1 Issue 5

FREIGHT

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The Association of Customs Agents in Rwanda (ADR)

The Association of Customs Agents in Rwanda (ADR) represents more than 150 private companies working in clearing and freight forwarding business in Rwanda and has developed a 2012-2016 Strategic Plan.

VISION To be an internationally recognized professional association of CFAs facilitating import and export trade in the region.

MISSION To facilitate the international import-export trade by providing a body of professional freight forwarding agencies within Rwanda, committed to meeting every client's needs.

CORE VALUES Honesty and Integrity, Efficiency, Professionalism, Transparency, Member Orientation and Accountability.

STRATEGIC PLAN OBJECTIVES: • 90% of the members will have received relevant managerial and technical training • Two new member value adding services/products are introduced every year • An annual member satisfaction index of 90% is attained • 90% of member operational issues are resolved within 48 hours • Reduction in service fees/charges by service providers • Reduction of NTBs identified in any particular year • 75% of members will operate in strategic alliances with peers in the region or individually in the EAC member states.

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Freight Logistics | ISSUE 5

contents

FREIGHT LOGISTICS

Issue 5

Vol.2

4 EDITORIAL Word from the Executive Director

6 INDUSTRY NEWS 8 FEAFFA BRIEFS FEAFFA develops Standard Trading Terms and Conditions

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24

Seek business opportunities beyond EAC, Freight Forwarders challenged

10 LOGISTICS Kabanga- Kobero OSBP Opens

12 Q&A Global standards, local experience a winning formula

14 AIRFREIGHT NEWS 15 TRADE Tanzania sets up base in Congo

16 EXPORT Reprieve for used motor vehicles are KRA authorizes re-exportation

18 COVER STORY

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Eight more agencies join online cargo clearing platform

19 Embrace single window systems-KIFWA tells members

20 REGIONAL Construction of regional road set to begin

21 Rwanda in US $ 5.7m Obama’s Trade Africa Initiative deal

21 PORT CHARTER Landmark port charter to boost East African trade through collective commitment

26 PROFILE Success against all odds to transform regional freight industry

29 FEAFFA elects the first woman President 30 INTEGRATION Tanzania and Burundi join SCT as Northern Corridor clears more products

32 Juba to EAC: Give us more time 34 PORT NEWS Mombasa and Dar es Salaam bet on new infrastructure to check threat from other ports

36 INFRASTRUCTURE

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World Bank injects US $ 300 in road construction

37 New Road to Unlock the South 38 Holili OSBP Agreement to be Signed 40 LAPSSET Kenya prepares ground for LAPSSET project

FEAFFA DIRECTORY

Inside

Freight Logistics | ISSUE 5

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FREIGHT LOGISTICS

WORD FROM THE

EXECUTIVE

DIRECTOR Federation of East African Freight Forwarders Associations P.O. Box 22694-00400, Tom Mboya, Nairobi.

The Crescent (Off Parklands Road) Westlands, Nairobi Kenya Email: info@feaffa.com Tel: +254 202-684802 Mobile: +254 (0)738 150673 http://www.feaffa.com Freight & Logistics is published for the Federation of East African Freight Forwarders Associations (FEAFFA)

by Efman Communications Ltd.

PUBLISHER

P.O. Box 40476, 80100 - Mombasa Tel: + 254 (0)733 466596 Email: info@efmancommunications.com CONSULTING EDITOR Githua Kihara githua.kihara@gmail.com CONCEPT DEVELOPMENT, DESIGN & LAYOUT Mshenga Mwacharo mshenga@mwacharo.com PROJECT CO-ORDINATOR Brian Lulangwa

All advertisements and non-commissioned texts are taken in good faith. While every care is taken to ensure accuracy in preparing the magazine, the publisher and FEAFFA assume no responsibility in effects risen therefrom. Material is submitted at the sender's risk and the publisher and FEAFFA cannot accept responsibility for accidental loss or damage.

To advertise and subscribe in Freight Logistics kindly contact: info@feaffa.com sales@efmancommunications.com

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Once again welcome to this edition of the Freight Logistics, our quarterly magazine/directory. At FEAFFA, we are committed to updating you with the latest industry information as well as providingshippers an opportunity to identify their ideal customs clearing and freight forwarding service provider.

This issue coincides with the end of the support project from TradeMark East Africa (TMEA) to our training programme; the East Africa Customs and Freight Forwarding Practicing Certificate.

We are proud to be associated with TMEA and above all, for the enormous achievements from this partnership.

The Federation held its annual general assembly during which it elected the first ever woman President, Ms. Merian Sebunya from Uganda, who is also the longest serving member of the Board.

With her came a few more new faces on the new Executive Board including Mr Petit – Jean Ndikumana from Burundi and Umuziga Gisele from Rwanda. We congratulate members of the new Board and take the opportunity to welcome you into the leadership of FEAFFA. To the outgoing team, we say thank you for the dedicated and selfless service and the far you have brought FEAFFA. In the same period, FEAFFA finalized the development of her Standard Trading Conditions. This is another regional tool intended to aid freight forwarding firms especially the small and medium sized in contracting with their clients.

This was made possible by the support of USAID East Africa Trade Hub. Another major achievement was the development of a regional framework for accrediting customs clearing and freight forwarding agents under EAC with support from JICA, which has now reached a critical stage.

The EACFFPC training programme remained our major focus with more agents getting accreditation. Rwanda graduated 212 agents in one of the most spectacular ceremonies the Federation has witnessed in its history.

The graduation was presided over by the Minister for East Africa Community Hon Jacqueline Muhongayire. This was later followed by Burundi which

graduated 102 agents. The ceremony was graced by Hon. Kieran Holmes the Commissioner General of Burundi. Our sincere appreciation goes to all those who have continuously ensured the success of this programme.

Special thanks go to the EACFFPC High Level Policy Forum, National associations, East Africa Revenue Authorities and the Curriculum Implementation Committees. We are also grateful to the training coordination team, the FEAFFA secretariat and the colleagues from TMEA for the outstanding contribution.

Let us keep this spirit as we continue our efforts of professionalizing the freight logistics sector.

This issue also comes at a critical moment in government programming.

Our governments have just released their annual budget estimates for the financial year 2014/2015. As a Federation, we note with appreciation the vast investments in freight logistics related infrastructure across the region including among others the standard gauge railway project on the northern corridor.

FEAFFA will continue to work together with other partners to ensure the resources are put to yield the best value.

Infrastructure development is critical to economic growth and we believe the region is headed in the right direction.

We pledge to provide any support required in the implementation of these projects.

Lastly, I wish to thank those that have continued to support this publication in one way or the other. Special thanks to all the partners who contributed articles and all the institutions that supported this issue through advertising. You are the reason why we read this edition and we will continue counting on your support even in subsequent editions.

As we strive to get even better, your feedback on how we can improve this publication is welcome.

Thank you for sparing time to read our publication

John K . Mathenge

Executive Director - FEAFFA Freight Logistics | ISSUE 5

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industry Central corridor improvement: Tanzania targets private funding The government seeks to mobilise funds from both local and international sources so as to improve the central transport corridor — especially by expanding Dar es Salaam Port and revamping the central railway line.

Addressing delegates at the alignment meeting on the development of central transport corridor organized by the World Economic Forum (WEF) recently, President Jakaya Kikwete said the government sought to raise $4.13 (Sh6.5 trillion) for the task.

He said the central transport corridor was crucial not only for Tanzania, but for Burundi, Rwanda, DR Congo and Uganda whose economic growth continues to depend on it over the years.

“We have earmarked to increase throughput of the Dar es Salaam Port from the current 13 million tonnes per year to 18 million tonnes annually by end of 2015.

“Furthermore, it is targeted to reduce time taken by a truck to transport a transit container from the Dar es Salaam Port to the borders of Burundi and Rwanda to 2½ days from the current 3½ days by the end of 2015,” he says.

“This is the rationale behind out touting for the standard gauge for the railway, distance of about 1,591 kilometres,” he said.

According to him, partner states DAR ES SALAAM:

Tanzania’s e-portal to report NTBs An online Tanzania business community has developed an electronic system to report Non Tarriff Barriers slowing down flow of the cargo to improve efficiency and cut down cost. The system developed by Tanzania Chamber of Commerce, Industry and Agriculture (TCCIA) allows people to report NTB slowing their system by SMS and online.

The scheme, developed with help from TradeMark East Africa, has attracted attention from the transport industry across the region.

“Of all the NTBs that have been reported to us, 42%, have been resolved,” Shammi Elbariki, Under the scheme, transport operators and freight forwarders are trained on how to report NTBs both online and through SMS. From the online portal in central Dar es Salaam the information is forwarded to the ministry or agency concerned for action.

Elbariki said that the portal is getting lot of complaints from frustrated people. The Central Corridor is a lifeline, not just for Tanzania, but also to other EAC countries it reaches – Burundi, Rwanda, Uganda, Democratic Republic of Congo, Zambia and Malawi.

had already done all preliminary studies sponsored by the African Development Bank (AfDB).

Earlier the President said that as for the case of project for expansion of Dar es Salaam Port, the progress was going on smoothly, but the only headache was for development partners to finance rehabilitation of the central railway line.

He called upon the delegates to come up with workable solutions for the problems affecting the central transport corridor.

“It is time we encouraged further private sector participation. It remains an alternative and viable option to minimise the public financing gap in infrastructure development,” said President Kikwete, who also expressed his hope that the meeting would deliver.

Mr. Steven Ngantunga the chairman of the Tanzania freight forwarders Association (TAFFA) and current vice president of the Federation of East African Freight Forwarders Associations (FEAFFA) thanked the president for the increased efforts to improve the central Corridor and assured full cooperation with the government on the that mater .He said this will reduce the cost of doing business by reducing transit times to the neighboring countries .

Rail cargo movement between Mombasa, Kampala to increase KAMPALA: Uganda is set to transport more cargo by rail as the capacity to convey heavy cargo has been developed.

Twenty rail wagons have been imported from the US to increase heavy cargo movement between the port of Mombasa and Kampala.

Rift Valley Railway (RVR), the company that operates the Kenya- Uganda railway, has begun carrying heavy steel products to be used for manufacturing iron sheets.

Maryanne Wachira, the head of RVR’s steel division, said one train load can deliver 1,000 tonnes of heavy steel coils, the equivalent of what 50 trucks can deliver loading 20 tonnes each.

Wachira was speaking at the launch of the RVR railway link to Roofings Rolling Mills at the Kampala Industrial and Business Park in Namanve last week.

“In developed countries steel is transported on rail, but in Africa it is not happening because of infrastructure challenges.

What we have launched removes 300 truckloads of steel off Ugandan roads per month,” Wachira explained.

Over 95% of the goods that are imported into or exported out of Uganda pass through the port of Mombasa. They use the Northern Transport Corridor (Mombasa to Kampala), but 90% of the cargo on the route travels by road and only 10% moves by rail, according to the World Bank.

Mark Rumanyika, the RVR general manager Western route, said ferrying high volumes of steel by rail has multiple social and economic benefits, including easing traffic congestion and saving roads from degradation.

Rumanyika added that the newly-acquired electric locomotives will increase rail carriage on the 1,300km journey between Mombasa and Kampala. He said the company has also rehabilitated 330 wagons with the support of the German government development organisation, KFW. Rumanyika said the railway tracks between Nairobi and Kam – pala have been rehabilitated and nine new culverts have been installed between Jinja and Busembatia to ease the transportation of cargo.

Oliver Lalani, the Roofings Group executive director, said rail transport will enable them import larger quantities of steel and improve their efficiency and output.

“With the heavier steel coils you enjoy higher yield productivity and less scrap percentage. It will benefit Uganda’s construction industry.”

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Freight Logistics | ISSUE 5

logistics FEAFFA develops Standard Trading Terms and Conditions

Seek business opportunities beyond EAC, Freight Forwarders challenged

The Federation of East African Freight Forwarders Associations (FEAFFA) has developed standardized trading terms and conditions. The Standard Trading Conditions (STCs) are a set of guidelines for clearing agents while engaging in any business transaction with their clients.

Speaking during the regional workshop to validate the STCs, Mr. John Mathenge, the FEAFFA Executive Director said the STCs had been developed by borrowing from international best practice with the aim of helping the small and medium sized companies that form majority of the players in the region in the process of engaging in contracts with their clients.

The document is expected to be quoted by all interested clearing and forwarding firms affiliated to the five members of FEAFFA as the basis upon which they are engaging in any business deals. It spells out the roles, responsibilities, liabilities and any other conditions while the agent is entering any business deal.

According to Mathenge, endorsement of the STCs is a dream come true for the federation. Their development had been envisaged from the onset of FEAFFA as an organization. Together with the code of conduct, FEAFFA was to develop STCs to make it easy for her affiliates to navigate any potential contentious contracts with their clients.

Development of the STCs was supported by USAID East Africa Trade Hub as part of her support towards enhancing the Federation’s capacity to fulfill her mandate.

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Customs clearing and freight forwarding agents in Rwanda have been challenged to seek business opportunities beyond the East African region. This call was made recently when the Minister of East African Community of the Republic of Rwanda Hon. Jacqueline Muhongayire presided over the 2nd graduation ceremony of East Africa Customs and Freight forwarding Practising Certificate (EACFFPC).

The event held at Rwanda Private Sector Federation Expo grounds in Gikondo in Kigali, Rwanda in June 2014 graduated 212 agents to enable them continue practising in the region.

‘Having attained the requisite skills, its now time to take full advantage of the opportunities presented by the EAC Common Market now that you are all at par in terms of professional competence,” Muhonganyire told the graduates.

The minister also thanked Rwanda Revenue Authority (RRA) for its initiatives and effots to built agents’ capacity. He also congratulated and thanked TMEA for providing financial and technical support to make the course a success.

“National Association in Rwanda (ADR) has done a good job by encouraging integrity that has made the freight forwarding fraternity a model in the region,” the minister said, adding that the Rwanda Private Sector Federation has also played a key role in ensuring this industry becomes a success.

This is the second graduation ceremony in Rwanda. EACFFPC is a six months joint training programme of the Federation of East African Freight Forwarders Associations (FEAFFA) and her affiliated National Associations and the East Africa Revenue Authorities.

It is one of the key programmes being implemented by FEAFFA with the aim of imparting the necessary knowledge and skills required in clearing and forwarding.

The course was developed in 2007 and has been implemented in the region since then.

Speaking during the ceremony, the ADR chairman and also FEAFFA vice president Mr Fred Seka assured the graduands that the certificate was regionally recognized. “ We call upon you to become good ambassadors and put all the knowledge

and skills acquired during the six months into practice” Seka said. He also thanked all the stakeholders involved in the programme and made an appeal for continued support.

The Director Trade Facilitation – Transport at TMEA Mr. Silas Kanamugire expressed the organzation’s satisfaction and pride in being part of this exemplary private sector partnership. “ At TMEA we believe the best way of promoting integrity and professionalism in the clearing and forwarding sector was to institute preventive interventions with a view to producing a new breed of highly professional individuals,” he said, challenging the agents to aim higher by taking further courses such as FIATA Diploma .

The Commissioner General RRA Mr Richard Tusabe applauded Rwanda for efforts to professionalize its workforce.

He also thanked ADR for working professionally, and TMEA for good work done in the region in a span of 3 years.

“This training has created more confidence, professionalism, and competence in the Customs territory”, said Mr Tusabe.

The ceremony was attended by among others the Chairperson of the Regional EACFFPC Curriculum Implementation Committee Ms Josephine Nyebaza, Head of the RRA Training School Mr Evarist Ntaganda, the FEAFFA Secretary General Mr Petit Jean Ndikumana, the Regional Training Coordinator - FEAFFA, a representative from UFFA, clearing agents in Rwanda and other private sector stakeholders.

Rwanda according to Seka has surpased the critical mass target of 240 trained agents. According to him, Rwanda now had over 350 certified agents; 300 from the EACFFPC and more than 50 through the certifiacte of competence. The only other country that has surpassed its number is Tanzania.

“Efforts to build on this success were in advanced stages with the EAC committee on Customs having adopted a recommendation to establish a regional accreditation system. The EACFFPC will be a major building block in the accredidation process of customs clearing and freight forwarding agents,” FEAFFA Executive Director Mr John Mathenge said.

Freight Logistics | ISSUE 5

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logistics

Kabanga- Kobero OSBP Opens

T

he United Republic of Tanzania and the Republic of Burundi have moved steps closer towards operationalizing One Stop Border Post (OSBP) concept at Kabanga/Kobero border on a pilot basis.

The move follows completion of the construction of temporary structures and installation of ICT systems at the border between the two Partner States.

The operationalization of the OSBP has also been made possible with the move by the two governments to sign OSBP Bilateral Agreement in 2011.

The Bilateral Agreement enables the Partner States to implement the OSBP concept while waiting for OSBP law, which is in the offing.

According to the tentative timetable released during a recent bi-lateral meeting between Tanzania and Burundi at the town of Gitega in Burundi, the OSBP operations on pilot basis was meant to start in June this year.

The launching of the OSBP operations at the border will be a huge relief to travelers and traders from the two Partner States as they will now only stop once for customs formalities instead of twice, thereby cutting cost and time spent at the border. Clearance will also improve following more automation of the operations.

Under the OSBP concept, people entering Burundi will by-pass the Kabanga border post (Tanzania customs and immigration offices) and proceed to Kobero in Burundi where Tanzanian customs and immigration officials will work side by side. Likewise those entering Tanzania will by-pass Kobero and stop only at Kabanga where officials of both countries will be working side by side.

According to the customs revenue officials, on average the border serves between 50 and 70 trucks per day, with

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more traffic moving from Tanzania into Burundi.

“Sometimes we attend to more than 100 trucks it depends on the day,’ said an official who works at the Kobero border post. Fully fledged OSPB operations at Kabanga/Kobero will begin when the construction of permanent structures is completed.

The East Africa Community is adopting the use of OSBPs as a trade facilitation concept to minimize delays at cross border points on major transport corridors in the region, often as a result of poor facilities, manual processes, lengthy and un-integrated procedures and poor traffic flow.

It entails combining two stops into one and consolidating functions in a single public facility for exiting one country and entering another. The effect is reduced travel time for passengers and freight vehicles.

50 - 70

trucks on average use the Kabanga/Kobero One Stop Border Post daily

Operations at Kabanga/ Kobero will begin when the construction of permanent structures is completed.

Kabanga/Kobero Border Post Fact File GPS Coordinates 2° 54’ 8” South, 30° 29’ 55” East

Distance

1,237 km from Dar es Salaam

Background 2011: Signing of OSBP bilateral agreement between Tanzania and Burundi

Freight Logistics | ISSUE 5

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Q&A expanding our customer base. We’ve managed a steady growth despite a slower import market and all the obstacles that you expect to face when moving into an established market.

Q. How have you managed this?

We’ve achieved a great deal in a short time by offering our customers a ‘bespoke service’ that provides innovative solutions to the challenges they face. This can range from a simple storage or handling issue for ‘reefers’ (refrigerated containers) to providing an alternative delivery option to Nairobi and beyond by rail.

Global standards, local experience a winning formula

A

mong the most significant recent developments in Mombasa was the opening last year of a new container freight station by APM Terminals. Its facilities include a dedicated rail link and a onestop-shop operation for speedy processing. The new facility is a joint venture with local Kenyan company, Great Lakes Ports Limited.

APM Terminals is one of the largest terminal operators in Africa with a total of 26 operations in 15 countries.

The Mombasa station strengthens the East African inland services, which already includes operations in Kenya, Tanzania, Uganda and Sudan.

Managing director, John Williams, spoke to Freight Logistics about the facility and the challenges facing the CFS sector.

Q. Why should businesses use APM Terminals?

One main reason is that we are a genuine one-stop-shop, with all the offices and facilities onsite to allow importers to process all documentation swiftly and efficiently. For example, we have Kenya Revenue Authority, Kenya Bureau of Standards, Kenya Plant Health Inspectorate Services – and also banking facilities with an on-site branch of Equity Bank. The aim is to

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substantially reduce turnaround time for imported and transit cargoes and also reduce demurrage costs for importers in Kenya and Uganda. We also have the latest state-of-the-art technology necessary to handle the sort of traffic we anticipate.

Q. What about your railway facilities?

We have two 600-metre railway lines which can accommodate four trains simultaneously. Each train movement takes the place of approximately 40 truck movements.

We feel that railway offers so many solutions to so many problems, such as road congestion and damage to highways. However, despite the many advantages, it is amazing that presently only an estimated 3 per cent of all cargo in East Africa moves by rail. Clearly something has to be done and we are working actively with RVR to improve on this figure.

Q. How has business been so far?

I am happy to say that since we are up and running and gradually

We might not have all the answers but we are certainly answering the majority of them. I think clients appreciate the unique combination of APM Terminals global experience together with the local knowledge and resources of Great Lakes Ports Limited.

Our constant aim is to provide a value added service to Kenyan and East African customers. That value will, of course, be different for each customer. For example, some actually need to delay their delivery for commercial or logistics reasons.

We can manage that delay and offer a variety of alternatives, something that the Port cannot provide.

Holding cargo in transit for EAC is another important role. Moving containers and cargo across borders can be an administrative and logistical challenge. We can provide the staging point to consolidate all aspects of the transit before delivery commences and in addition can offer the rail alternative which is ideal for some cargo.

Parting shot…

At APM Terminals, whatever the nature of the cargo, it is obviously a valuable commodity for our customer and therefore needs to be handled safely and securely. This is something we take very seriously.

Our global safety standards are second to none.

Freight Logistics | ISSUE 5

air freight Global freight forwarding facing

MAJOR CHALLENGES

New report on the fortunes of global freight forwarding shows the sector declined in value.

Qatar Air aims to be among top five cargo operators Qatar Airway plans to expand its cargo arm to become one of the top five global operators by 2018 as it purchases freighter planes and adds space in the holds of passenger jets while expanding its Doha base.

Qatar Air, ranked outside the top 10 last year by tonnes flown, has a freighter fleet of six Boeing 777Fs and three Airbus A330s with six wide-bodies on order and the potential to add more, cargo unit CE0 Ulrich Ogiermann said. Expansion of its freight terminal at Doha’s new Hamad International Airport should double annual capacity to 2.8 million metric tonnes by 2017, he said.

“We have a very clear plan to substantially grow our footprint,” Mr Ogiermann said, adding that the hub expansion will allow Qatar Air to pursue more ambitious targets by minimising the operational risk of transporting more cargo.

CEO Akbar Al Baker has targeted the establishment of Qatar Air as a major airfreight player by next year, with deliveries of wide-body passenger jets set to propel

it to the upper tier based on belly-space alone.

FedEx and United Parcel Service are the world’s leading cargo carriers, transporting 6.9 million and 4.8 million tonnes of freight respectively last year. Qatar Air’s Gulf rival Emirates ranks third and leads the way among non-specialist carriers on 2 million tonnes after building the world’s biggest fleet of wide-body passenger jets.

Belly space remains the most efficient mode of cargo transport and reduces the validity of dedicated freighter operations, Mr Ogiermann said, so Qatar Air will add more cargo jets only if market growth clearly justifies doing so. Attractive new markets include Africa, with top-performing existing locations including the traditional cargo hubs of Hong Kong, Frankfurt, London, Amsterdam and Paris, he said. Local demand is particularly strong for perishable goods such as fish, meat, vegetables and fruit, with the Gulf relying mainly on imports to meet requirements.

Source: www.freshplaza.com

A perfect storm of capacity issues and changing manufacturing practices are putting the squeeze on the global freight forwarding sector, according to research and analysis firm Transport and Intelligence (Ti) The agency’s latest report, Global Freight Fowarding 2014 paints a picture of firms fighting to adapt to a changing environment. The report says the sector declined in value by 3.3 per cent from 2012.

According to the report, troubling capacity concerns within the air and sea freight markets combined with manufacturers moving away from globalisation and towards regionalisation are resulting in changes to freight forwarding strategies and product solutions.

“The global freight forwarding market is evolving and those forwarders that can adapt the quickest to economic and market changes will be the winners,” Ti senior analyst Cathy Roberson says.

The report says China is no longer the automatic ‘go to’ location in Asia to manufacture goods, particularly as opportunities open in other emerging markets such as Africa, the Middle East, South America and Southeast Asia.

It highlights nearsourcing as another factor driving change in the sector, saying it is becoming a reality as emerging markets such as Mexico and Turkey benefit from their proximity to the US and the European Union, respectively.

Ti says changing trends are opening up new trade lane opportunities, while new product solutions are also on the increase.

These include multimodal transport as an alternative to air and/or sea freight movement as well as industry-specific solutions particularly for those commodities requiring temperaturecontrol management such as pharmaceuticals, foods and some high-tech goods.

Ti says many freight forwarders are struggling to cope with the changing dynamics because of fluctuating rates and capacity within the air and sea freight markets.

There are pockets of good news, however, with Ti saying emerging markets will continue to play a growing role and as regionalisation and localisation grow.

It says multi-modal transportation solutions will become additional options to air and sea freight as freight forwarders look for profitable growth.

Source: www.fullyloaded.com.au

Air Freight Security a Major Issue Members of the International Air Cargo Association (TIACA) are being asked to attend the advance data workshop at Air Cargo Forum 2014 to be held in South Korea in early October. Their request has been reinforced by the British International Freight Association (BIFA) and principally concerns one of the current major topics to the air freight industry, that of cargo security.

At a recent meeting in Washington DC TIACA officials met with Transportation Security Administration (TSA) representatives together with other stakeholders including XLA, the Airforwarders Association (AfA) and the National Customs Brokers & Forwarders Association of America (NCBFFA) in a follow up to the joint industry letter put before the TSA in May of this year.

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Freight Logistics | ISSUE 5

trade Tanzania sets up base in Congo

T

anzania has opened an office in Lubumbashi, DR Congo, as part of a reform and expansion plan to become a port hub for the hinterland countries, and fight off competition from Kenya.

The government is also keen to fast-track the expansion of the Dar es Salaam port as it seeks to secure a geostrategic position as the key access point to the Indian Ocean to serve the economic zone straddling the Nile Basin countries — a position Kenya too, is keen to achieve.

The opening of the Lubumbashi office comes in the wake of a visit by the Minister for Transport Harrison Mwakyembe and the top management of the Tanzania Ports Authority to the city, which is Congo’s second biggest.

“Congo is one of the biggest users of the Dar es Salaam port, therefore we have decided to follow them and serve them where they are. A Congolese businessman will be served without having to come here, we are also going to link the office to our Dar es Salaam main office via an electronic system,” said TPA in a statement.

The Dar es Salaam Port also serves Zambia, Uganda, Rwanda and Burundi.

The opening of the office follows a similar move by TPA’s rival the Kenya Ports Authority (KPA), which has a representative offices in Kigali, Bujumbura and Kampala also targeting the DRC. Kenya is also setting up a second container terminal in Mombasa, as part of mega projects the country is pushing in order to consolidate its standing as the hub of economic activity in the region.

The country is also building another port in Lamu as part of the Lamu Port-South Sudan-Ethiopia Transport (Lapsset) Corridor.

At the moment, Kenya only has one transport and economic corridor, the Northern Corridor, running from the port of Mombasa to Malaba on the border with Uganda, and onwards to Central Africa.

A second corridor is critical as the country seeks to access Ethiopia and South Sudan through the north and east of the country from the new port of Lamu.

Tanzania meanwhile, secured a Chinese contractor and the funding to construct another port at Bagamoyo, just 60km north of Dar es Salaam, at a cost of $11 billion.

The construction work has not started but the government has carried out land valuation and has announced that it will start paying out compensation in June to about 1,200 families to vacate 2,000 hectares.

The project is expected to be completed in 2017.

in global partnership with...

KENYA OFFICE: Modern Reliance Complex, Mombasa Road P.O. Box 66222-00800, Nairobi Kenya Tel: +254 20 2038373, 2184512 Fax: +254 20 603185 email: info@tabaki.co.ke www.tabaki.co.ke

UGANDA OFFICE Plot 20-24 Spring Road Bugolopi, Kampala.Uganda P.O Box 9670 Kampala Tel:+256 41 4341900,+256 41 4341901 email: info@tabaki.co.ug www.tabaki.co.ug

Big enough to deliver... ...small enough to care

Freight Logistics | ISSUE 5

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export

Reprieve for used motor vehicles as KRA

AUTHORIZES RE-EXPORTATION

T

he Kenya Revenue Authority (KRA) has allowed importers of vehicles above eight years of age to re-export them instead of being crushed. This follows similar concessions by the Kenya Bureau of Standards (Kebs) recently.

This will be a major relief for the importers of more than 2000 vehicles lying at the port of Mombasa and various Container Freight Stations (CFS) after earlier reports indicated that the vehicles would be crushed.

However, in a letter dated March 26 this year addressed to Association of Importers of Motor Vehicle, which had requested review of the directive to crush the vehicles, KRA says that vehicles will be dealt with on a case to case basis.

“Your request to amend final destination of the cargo shall be dealt with on a case to case basis as provided for in the customs laws,” the letter signed by D.M Kimilu on behalf of the deputy commissioner of port operations says.

It adds: “On the issue of refunds, the importer shall lodge refund claim

16

in accordance with provisions under East Africa Community Customs Management Act (EACCMA) upon re-exportation of the vehicles.”

Earlier, Kebs allowed the importers to amend the manifest to enable them sell the units in neighbouring Uganda, Rwanda, South Sudan and Burundi where there are no age limit restrictions.

Granting the importers the permission to re-export the units, Kebs said that the importers were however to seek clearance from the other government agencies.

“This is to inform you that Kebs has no objection to your request to re-export the said units as provided for in the regulations under the Standards Act Cap 496, Laws of Kenya. However, permission granted to re-export does not exempt you from meeting any obligations to any government agencies,” a letter dated March 24 this year from Kebs regional manager V.K Cheruiyot and addressed to Association of Importers of Motor Vehicles reads in part.

Most of the units are said to have been inspected in Japan in

November last year but arrived in Mombasa declared time barred due to shipping delays leading to protests by the importers, said the chairman of the association Peter Mambembe.

All imported vehicles to Kenya must conform to the KEBS regulatory KS 1515, the Kenya Standard Code of Practice for Inspection of Road Vehicles. This regulation requires imported vehicles to be right-hand drive and used motor vehicles to be less than eight years old from the year of the first registration.

The vehicles that do not meet local standards are supposed to be shipped back to the country of origin or destroyed.

Kebs has appointed Japan Export Vehicle Inspection Company (JEVIC) to conduct pre-shipment inspections and issue certificate for imports from several countries, including Dubai, Britain, South Africa and Singapore.

For vehicles imported from other counties, the owner must surrender 15 per cent of the value to have them inspected locally.

Freight Logistics | ISSUE 5

KENYA TRADE NETWORK AGENCY (KENTRADE)

Your G2B trading partner Simplifying Trade Processes for Kenya’s Competitiveness

Unveiling our

CONTACT CENTRE 020-4965000

0730 150 000

0709 950 000 contactcentre@kentrade.go.ke www.kentrade.go.ke

Kenya Trade Network Agency (KenTrade) is a state agency mandated to establish, operationalize and manage the National Electronic Single Window System (Kenya TradeNet System)

We are located at Embankment Plaza, Nairobi

Opening Hours

Monday - Sunday

0700hrs – 1900hrs

YOU CAN NOW CONTACT US FOR ANY ENQUIRIES, CONCERNS OR COMPLIMENTS ON THE NUMBER AND EMAIL ADDRESS PROVIDED.

cover story

Eight more agencies join online

CARGO CLEARING PLATFORM

The Authorized Economic Operators (AEOs) will start using cargo declaration module in early September after two weeks of piloting as KENTRADE plans to train all clearing agents from September.

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he Kenya Trade Network Agency (KenTrade) has brought on board 8 more government agencies into the Kenya National Electronic Single Window System after a successful process with the initial eight bodies.

Once fully operational, the system, officially known as the Kenya TradeNet, will provide a single point of access for the Kenyan trading community to electronically submit and receive approvals from 24 regulatory agencies, enabling easier, faster and more transparent process.

The Kenya TradeNet System, developed by Crimson Logic, a leading provider of e-Government solutions and services headquartered

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in Singapore went live on pilot basis, with the processing of pre-clearance documentation from 8 agencies.

The System, according to the KenTrade’s General Manager in charge of Operations Amos Wangora is able to process pre clearance documents i.e. Import and Export permits and IDFs from Kenya Bureau of Standards (KEBS), Kenya Plant Health Inspectorate Services (KEPHIS) and Department of Veterinary Services.

Other permits include Horticultural Crops Development Authority (HCDA), Pharmacy & Poisons Board and Port Health.

The system is also fully integrated with the Kenya Revenue Authority (KRA) Simba and Kenya Ports Authority (KPA)

Kwatos Systems, where it enables lodgment and processing of Import Declaration Forms (IDF) and Sea and Air manifests.

“We completed piloting in March this year and rolled out Phase 1 pre clearance documentation. This was after dealing with all emerging teething issues, which have now all been resolved,” Wangora said in a recent interview, adding that the agencies recently brought on board will also go through the same process.

Currently, KenTrade is testing before piloting in mid August, pre clearance documentation with the Kenya Wildlife Services (KWS), Kenya Sugar Board (KSB), Kenya Dairy Board (KDB), National Biosafety Authority and Ministry of Mining. Other agencies Freight Logistics | ISSUE 5

include Coffee Board of Kenya (CBK) and Kenya Radiation Protection Board.

On processing of the Sea and Air manifest, KenTrade has completed piloting on the bulk cargo and motor vehicle manifests. For the containerized cargo, the piloting is expected to be completed by 31st July this year.

Although the 8 agencies that were brought on board in Phase 1 are still accepting parallel methods to clear cargo after cut over, they are expected to phase out the manual process in due course.

“Individual Agencies will have to stop using the manual system and we are already in discussion with various CEO’s of these Agencies to fast track this process,” Wangora said. KRA, KPA and KEPHIS systems, which play central roles in releasing cargo, have already been fully integrated into the Kenya TradeNet system, while integration with the Pharmacy and Poisons Board (PPB) system is currently ongoing.

KenTrade has planned to roll out the last phase of the project, Declaration Module, which will allow clearance of the goods from various entry points by September this year. User testing with 5 Authorized Economic Operators (AEO) on declaration module will start in midAugust this year. ‘There are about 80 AEO operators in the country that will be brought on board gradually after two weeks of piloting” Wangora said.

The AEO programme was started

by KRA to allow companies that have been audited and profiled as low risk to clear cargo without going through the taxman’s rigorous clearing process.

“KenTrade will train all the Clearing agents on the Declaration Module from September this year. We intend to have all end users on the system and have it fully operational by 1st January next year” Mr. Wangora said.

Risk Management module is also being implemented by KenTrade. The risk management system being created for all the 24 agencies will allow the system to carry out risk assessment on cargo documents as they are lodged through the Kenya TradeNet system and assign risk profiles on expected cargo.

This will allow for an objective intervention of cargo at our entry points hence reducing manual and physical interventions. This is necessary as volumes of cargo through our borders continue to increase. According to Wangora, although all the organizations and users will not be required to be fully automated to use the system, there is a strong need for them to automate back end operations to improve efficiency.

The automation of the government agencies expected to be brought on board currently stands at about 40 percent. With the support of KenTrade and the government, KEPHIS, KEBS Freight Logistics | ISSUE 5

and the PPB have started the process of full integration. Others are expected to follow gradually.

“It is a core mandate of KenTrade to facilitate trade and we are assisting other government agencies to reengineer their business processes, seek finances and fully embrace ICT. Those organizations that have not automated are likely to cause delays since they will rely on manual process to give approvals before the information is fed into Kenya TradeNet system, he said.

To ease integration of all key players, there would be a provision where even with an e-portal, any agency, clearing agents and associations engaged with logistics would be linked to the system.

It is easier to develop a system but the hard part is making end users use it, said Wangora, adding that KenTrade has embarked on intense sensitizations and trainings aimed at increasing the Kenya TradeNet System usage.

The Kenya TradeNet System was launched on May 02, 2014. The event was attended by Heads of State and Senior Government officials from the East Africa Community trading block, and representatives of business community and development partners.

His Excellency President Paul Kagame of Rwanda launched the System in the presence of His Excellencies Uhuru Kenyatta of Kenya, Yoweri Museveni of Uganda, Deputy President William Ruto of Kenya, Prime Minister Miengo Pinda of United Republic of Tanzania and Gervais Rufyikiri, the 2nd Vice President

of the Republic of Burundi.

The Kenya TradeNet System is being funded by the Government of Kenya with support from development partners Investment Climate Facility for Africa, International Finance Corporation, TradeMark East Africa. The Kenya TradeNet System is a flagship project of Kenya’s Vision 2030 programme under the Economic Pillar.

The specific objective of the Kenya TradeNet System is to reduce cargo dwell time at the Port of Mombasa to a maximum 3 days and a maximum of one day at the Jomo Kenyatta International Airport in a period of 2 years after operationalization.

At the border posts, the system is expected to reduce the cargo dwell time for both transit and intra-regional trade consignments to a maximum of one hour. Today, truckers wait for up to 24 hours to pass the land border posts.

Studies done in the past estimates that 42 percent of the total costs of production are composed of logistic costs largely exaggerated by this inefficiency.

This has been an issue of major concern for both the government and the private sector for several years.

Arising from a survey conducted in 2000, the savings to the economy will be between US$ 150million and US$ 250million per annum in the first 3 years and thereafter between US$ 300m to US$ 450m per annum once the system works fully.

Individual Agencies will have to stop using the manual system and we are already in discussion with various CEO’s of these Agencies to fast track this process.

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Embrace Single Window System: KIFWA tells members

regional

K

enya International Freight and Warehousing Association (KIFWA) has applauded KENTRADE’S National Electronic Single Window System (NESWS), saying that it will boost their revenue due to increased turn-around in various logistic chains.

The chairman of the board of trustee at KIFWA, Mr Sam Njoroge said that fears that the system will claim clearing agents’ jobs are far-fetched. As the clearing and customs agents, freight forwarders will be one of the biggest consumers and beneficiaries of the system, he said.

“We have very high hopes that this system will improve efficiency significantly. There is always fear when such a systems is rolled out but with the current age of technology, we do not have any choice but to embrace the system,” Mr Njoroge said.

He said that although KENTRADE has already trained clearing agents, with more intense expected to commence in September, KIFWA has also created an internal training programme that is sensitizing its members on the benefits and working of the single window system.

Any such system is likely to face some bottlenecks but once people start using it those challenges goes away and benefit becomes immense, Mr Njoroge said.

“We have already sent a circular to all our members informing them that we have to embrace this new system,” he added.

With a single entry point to the clearance of the cargo, Mr Njoroge said that clearing agents are hopeful that Kenya Revenue Authority’s (KRA) Simba system will be upgraded to make it even better.

To ease integration of all key players, KENTRADE has created a provision where even with an e-portal, any agency, clearing agents and associations engaged with logistics would be linked to the system. This will enable small clearing firms to use the system without investing much in ICT infrastructure.

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Construction of regional road

SET TO BEGIN

The East African Community (EAC) seeks to improve regional transport infrastructure to support economic and social development programmes in the region.

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anzanian authorities have announced plans to start the construction of Arusha – Holili – Taveta highway via Moshi in November this year to ease the trade between Kenya and Tanzania.

The Ministry of East African Cooperation said in a recent statement that the construction would begin after completion of a feasibility study and an in-depth analysis of the project to be financed by a credit facility from the African Development Bank and contributions from governments of Tanzania and Kenya.

The AfDB approved two loans totaling nearly 400bn/- last year for the construction of the158-Kilometres road project that will stretch from Arusha to Holili in Tanzania and Taveta to Voi in Kenya.

Tanzania will receive US$ 120 million while Kenya will get US$ 113.12 million of the two loans approved by the AfDB board. The bank facility will constitute 89.1 per cent of the total project cost.

The project is being constructed in an effort to reduce the cost of transport and enhance access to agricultural inputs, larger markets and social services within the East Africa Community.

The project, which is expected to be completed by December 2018, will also be jointly financed by the governments of Kenya and Tanzania both contributing US$5.6 million and US$ 12.3million,

respectively.

The Arusha-Holili onto Taveta-Voi Road connections form a transport corridor of the East African region that links the Northern Corridor at Voi to the Central Corridor across the common border at Holili- Taveta-Voi through Arusha, Babati to Dodoma and Singida regions.

It will comprise civil works for the construction of the 42.4km Arusha bypass and dual carriageway linking the Sakina-Tengeru section of 14.1 kilometres as well as the construction of two roadside amenities at Tengeru, one on either side of the dual carriageway in Tanzania.

It will also involve the upgrading of the 89 kilometres Taveta-Mwatate portion and construction of the 12 kilometres Taveta bypass and two roadside amenities, one each at Bura and Maktau along the Mwatate- Taveta Road on the Kenyan side of the bargain.

The East African Community (EAC) seeks to improve regional transport infrastructure to support economic and social development programmes in the region, promote tourism and foster regional integration and at the same time reduce the cost of doing business by supporting cross border and international trade.

Kenya and Tanzania have already constructed a One-Stop-Border-Post at the Holili and Taveta border post, Contd. page 23 Freight Logistics | ISSUE 5

Rwanda in US $ 5.7m Obama’s

Trade Africa Initiative Deal

“The U.S. Government is an important partner in promoting regional and economic integration in East Africa. Trade Mark East Africa will continue to focus its efforts on increasing trade and prosperity in the region” – TMEA senior director country programs Mr. Mark Priestley.

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wanda has received US $ 5.7 million to improve the efficiency of regional trade. Officials from the United States Agency for International Development (USAID) and Trade Mark East Africa (TMEA) signed the deal in Rwanda in May this year, affirming their partnership under President Obama’s Trade Africa Initiative.

The program will run for three years and will seek to reduce the time it takes for goods to clear at the borders by reducing technical barriers to trade. It will also enhance Rwanda’s ability to export and import goods through increased regional integration.

“Time really is money, and with the reduction in delays, trucking companies can complete more trips, traders can depend on moving goods more efficiently, exports can compete on global markets, and consumers will benefit from more and cheaper goods,” Peter Malnak, USAID Rwanda Mission Director said during the ceremony.

The partnership will also support East African Community (EAC) regional trade integration. Through Trade Africa, TMEA will broaden its regional integration program at the Ports of Mombasa and Dar es Salaam and key border posts along the Northern and Central Corridors. It will also work with EAC

Freight Logistics | ISSUE 5

Member States to remove barriers to trade, TMEA said in a press statement released during the signing ceremony.

TradeMark East Africa senior director country programs Mr. Mark Priestley noted that a 10 percent increase in East Africa’s export volumes can be achieved by improving East Africa’s trade competitiveness by increasing physical access to markets, enhance trade environment and improve business competitiveness.

“The U.S. Government is an important partner in promoting regional and economic integration in East Africa.

TMEA will continue to focus its efforts on increasing trade and prosperity in the region, primarily through investing where there will be the biggest impact for East Africa’s people and the private sector,” Priestly said, adding that regional trade is an effective means to alleviate poverty.

“This investment supporting these projects is the catalyst needed to bring prosperity to the region.”

Improving trade facilitation is central to USAID’s economic growth strategy in Rwanda, as well as a priority of the Obama Administration under the Trade Africa initiative – which is focusing first on East Africa. The programme was launched in June 2013 during President Obama’s trip to the continent.

Reducing the barriers to cross-border

trade will result in a 10 percent increase in total value of exports from EAC region, experts say, and a 15 percent reduction on average time one takes to import or export a container from Mombasa or Dar es Salaam to Burundi and Rwanda. It can also create 30 percent decrease in the average time a truck takes to cross selected borders.

Since the East African Single Customs Territory was rolled out at the Port of Mombasa in January 2014, clearance time for cargo destined to Kigali has declined from 21 days to 6 days. The cost of clearing a container has also dropped significantly from $5,000 to $3,387.

“The USAID Trade Infrastructure Program will build on successes like these and will harmonize its work with that of EAC and the Government of Rwanda. With these initiatives working together even further reductions in transport time and shipping costs across the region can be expected,” said the statement.

Rwanda Freight Forwarders Association (ADR) chairman and Federation of East Africa Freight Forwarders Associations (FEAFFA) 2nd vice president, Mr. Fred Seka this will reduce the cost of doing business in the region and thanked TMEA and USAID for the support.

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port charter

LANDMARK PORT CHARTER to Boost East African Trade through Collective Commitment

“Without inclusive consultations and agreement with all port stakeholders, the port and the road corridor will continue to experience operational inefficiency…” SCEA executive officer Gilbert Langat

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he Mombasa Port is the key intermodal point for road and rail trade along the Northern Corridor to Kampala, Kigali and beyond. The port recorded unprecedented growth in cargo volumes over the last ten years. Various projects and measures have been undertaken to improve port capacity and efficiency over the past few years. Past attempts to address some of the challenges that the port has experienced over the last four decades focused on Kenya Ports Authority as an institution, and wrongly excluded the multiplicity of statutory bodies, as well as private sector players who are an integral part of trade facilitation. Recognizing this, in late June, key agencies drawn from government, private sector and civil society signed an ambitious binding charter that will transform Mombasa

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into a high performing port by 2016.

President Uhuru Kenyatta officially appended his signature as a witness to the Mombasa Port Community Charter.

Driven by a strong political will which comes from the very top, the Charter represents the culmination of stakeholder consultations, including government agencies, the business sector, civil society, the port community and special interest groups. Signed by 25 different agencies, it commits to overcoming obstacles and reaching or exceeding performance standards that will deliver goods to the market with maximum efficiency and in minimum time.

According to Gilbert Langat, Chairman of the Port of Mombasa Community Charter, the launch of the charter follows over one year of intense consultations among all stakeholders,

including government, business, civil society organizations and the Coastal Community.

“Without inclusive consultations and agreement with all port stakeholders, the port and the road corridor will continue to experience operational inefficiency” noted Langat.

TradeMark East Africa ( TMEA ) is one of the signatories, and has invested US$53 million to rehabilitate the port corridor. These funds come from eight bilateral donors, especially from the United Kingdom’s Department for International Development. The funds are strengthening infrastructure such as gates and yards in the port, improving productivity with new electronic cargo management systems, and creating better law and regulation. TMEA also played a large role in the creation of the Charter. TMEA Kenya Director, Chris

Freight Logistics | ISSUE 5

Kiptoo, is optimistic. “The document is a declaration of intent”, he said, “to commit certain actions which combined will create a seamless corridor from the port through the northern corridor. This will drive down costs of trade, and reduce high consumer prices for goods all across the region.”

East Africa suffers from very high transport transit times. The delays in ports and at border posts in processing goods leading to increased costs of transporting goods, especially to landlocked countries in the hinterland.

Freight costs per kilometer are more than 50% higher than costs in the United States and Europe. For landlocked countries, they can be as high as 75% of the total value of exports.

Kenya Private Sector Alliance (KEPSA), which represents the private sector, also welcomes the Charter, and the accompanying electronic dashboard that measures key indicators of port efficiency. “The key is competitiveness and efficiency,” said Carol Kariuki, CEO at KEPSA. “Efficiency is good for the Kenyan economy. Removing transport bottlenecks means transport costs will come down. The consumer benefits in terms of lower prices for goods in the shops. Meanwhile, there will be more money left for large and small companies to invest in modern logistics and production.

But most important, the benefits can be passed on to the consumer. Port efficiency,” she concluded, “enhances the competitiveness of the general business climate and makes it easier to export successfully too, boosting the economic growth of the region.”

Ms Karin Andersson, the TMEA PIC Chair and representative of the TMEA donors highlighted the importance of the Mombasa Port Charter to the region. “The reforms at the Mombasa

Port will ultimately reduce the high cost of trade & doing business and create an environment which allows for new jobs and ultimately citizens paying less for basic goods.”

And positive change is already in motion.

According to Gichiri Ndua, the Managing Director, Kenya Ports Authority, the Mombasa Port Corridor is already reaping the benefits of the port reforms.

“Port productivity has improved and container dwell time has reduced to 4 days from 10 days. This is as a result of implementing some of the recommendation in the charter,” noted Ndua.

Transit time of container laden trucks to Malaba is now consistent at less than 5 days, down from 8 days. The Port of Mombasa is currently the deepest port in East Africa and can accommodate container ships of up to 8,000 TEUs. President Uhuru Kenyatta in June 2013 issued a directive to streamline port operations so as to improve efficiency and reduce transit time from Mombasa to Malaba from 18 days to 5.

At the launch, President Uhuru was keen to ensure that charter signatories are held accountable through a monitoring mechanism. “Too often in the past, ambitious initiatives of this kind have been launched, only to fade away for lack of monitoring. We cannot let that happen here. We cannot let the charter we launch today become another document, gathering dust deep in a forgotten office. I wish, therefore to ask TradeMark East Africa to make available, preferable online, a quarterly report that gives us hard data on the progress of the initiative. We must and we will hold each other accountable” Customs clearing and freight forwarding agents are one of the key stakeholders and signatory to the Mombasa port charter.

Your Freight Partner

Construction of regional road set to begin Contd. from page 20 which is ready to take off once President Jakaya Kikwete and his counterpart, Uhuru Kenyatta sign a bilateral agreement to that effect.

The two States sharing the OSBP have to sign bilateral deals to permit the border control agencies to work on each other’s side of the border A US$ 5.7 million donor funded facility at the Holili border post in Kilimanjaro Region complete with state-of -the art facilities was ready since December, last year.

The border post will improve efficiency by reducing the total average time it takes to clear cargo at the two border posts by 30 per cent contributing to reduction in transport costs and increase in intra-regional and foreign trade in East Africa.

Under ‘One-Stop-Border-Posts’, immigration, customs, health and bureau of standards departments for both countries will be housed under one roof and travelers, freighters and other people using the borders will have all the procedures done at a single station.

“Instead of the current arrangements where procedures entailing border crossings force travellers to undergo the checks twice, first at the country of departure and repeating the whole process in the arrival country, this time round it will be just once,” Trademark East Africa Director for Integrated Border Management Mr Theo Lyimo told reporters early this year.

Once all OSBP around East Africa go into operation, the time spent at border posts connecting the five EAC member states will be cut down from two hours for ordinary travellers to just about 30 minutes.

Cargo vehicles that are now forced to be delayed for up to three days at borders will in the future spend only three hours to be cleared.

The OSBP at Holili will also include a fully fitted medical centre to serve travellers, restrooms, full public internet connections via Wi-Fi, sanitation facilities as well as special departments to cater for small and medium scale traders who transact across the borders.

Ace Freight Ltd. Centre, Off North Airport Road,Opp. SDV Transami P.O Box 57100-00200, Nairobi - Kenya | Off: +254 20 804 4016 Fax: +254 20 2493351 | Cell: +254 722 519143 Email: ck@acefreightltd.com | Web: www.acefreightltd.com

Freight Logistics | ISSUE 5

23

RWANDA FREIGHT FORWARDERS ASSOCIATION

EACFFPC 2ND GRADUATION CEREMONY FRIDAY 6TH JUNE 2014

ENHANCE PROFESSIONALISM 24

Freight Logistics | ISSUE 5

List of 2014 Graduates 3rd INTAKE

GAPIRA Peter MUKANKUBANA Susan ATUGONZA Jamadah BUCYANA Murekezi Emmy FURAHA Gilbert UMURUNGI Florence NYIRINKINDI Amani Martin NDATUMUREMYI Jean Claude IGENA Zihinjishi Dalie BARIGIRA Kabera Jean Damasène MUSABIMANA M. Christine UFITINGABIRE Jean Pierre MUKESHIMANA Georgette MUGISHA Suwed RUTABURINGOGA Fidele MURENGEZI Johnny Ivarsen INGABIRE Janviere NKUBITO Wilson

4th INTAKE

AJESIMI Eric GASANA Joseph MUSHIKIWABO Neema HODARI Rwakibibi Etienne NANKUNDA Paula RUKABUZA Novat MUKESHIMANA Clementine ITANGUKWISHATSE Emmanuel TWIZEYIMANA Jean Pierre MUSHIMIYIMANA Emmanuel UMUGWANEZA Berthilde RUTAGANDA Jean De Dieu MULISA Emmanuel BIMENYIMANA Chantal TULIMUKAGA Jean Damascene ZANINKA Nathalie SIMBI Patricien RYUMUGABE Bonaventure RWAMBALI BIniga Aphrodis UMWALI Emma Rose NDAYISHIMIYE Josephine MUTUYEYEZU Devotha UWANYIRIGIRA Claudette KALIRENGE Pudentienne MATABARO Callixte MIHAYO Nicole MUKESHIMANA Beatrice MUHIMANA Innocent KALISA Francois Freight Logistics | ISSUE 5

MUKESHIMANA Jean de Dieu MUSAYIDIRE Christine UWIZEYE Marcelline NISHIMWE Lydie KIMENYI Jackson NTURO Cassius RUZINDANA Michel Idsbard RUSAGARA Peter MAFARANGA Jean Claude NIZEYIMANA Thomas MUKANKOMEJE Denise NTIRENGANYA Egide UWIZEYE Justine INGABIRE Nathalie Gloria

5th INTAKE

NYIRANEZA Solange NYIRIMPUNDU Claudien NZAMWITA Gervais KAYITARAMA Asnathe NYAMASWA Abel GUMISIRIZA Ronald HABYARIMANA Adrien NGUNGA Medard MUJYAKERA Frederic UMWALI Gisele MUGEYO Claude KAYIJUKA Jean NIYONSENGA Jean Pierre MAJYAMBERE Richard GASINZIGWA P. Celestin RUGANZU ALEXIS TUGIRIMANA Simon peter NKUNDABATWARE Ferdinand BENIMANA Ancille UWAMAHORO Valentine RUHASHYANGABO J. Aimé NKURUNZIZA Jean de Dieu MWUMVANEZA Bonaventure UFITEYEZU JMV UWABABYEYI Vestine UWAMBAYE INGABIRE Gentille MUGWANEZA Jean Claude MUREKATETE Sonia

6th INTAKE

HAKIZIMANA Evariste GAHONGAYIRE Scovia Basaliza UWAMWIZA Jacqueline BUTERA Mwesigye Emmanuel SIFA Aline

NKURUNZIZA Emmanuel KAGAME Roger UMUGWANEZA Noella UWIMPUWE Josiane RWIGEMA David UMUGWANEZA Mylene NSENGIYUMVA Ibrahim HABIYAMBERE Theoneste Rachid RUTUNGISHA Tresor Aliston RUBERWA Jean de Dieu NGIRINSHUTI Japhet MUSHIMIYIMANA Pascal MUNANIRA Alex HABINEZA Jean De Dieu MUKULIRA Sandra NIYONSABA Chantal NIKUZE Immaculee MUSABYEYEZU Zacharie uwimana Jacqueline KAGARAMA Eugene NSENGIYUMVA Venuste MUSANABANDI Anastasie MUKAMARAKIZA Alida MAHORO Sylvie INGABIRE Delphine NYIRAHABIMANA Josiane GATALI Emmanuel TUYISENGE Adeline NIYONGIRA Jean Claude

7th INTAKE

RUKUNDO Theogene MUGISHA Joseph BIRYOMUMAISHO Issa Brian MUCOREKE Jeanine BIZIMUNGU Damas IGENA Jean De Dieu JABO Bafasha Fred UMUHIRE Munganyiteto Carine UWASE Magnifique MWESIGWA William MUTONI Emily BATAMURIZA Sharon MUKAMURENZI Speratha NZWINIMANA Fidele UWINGABIRE Claudine HITIMANA Alice NTAGANDA Gretta HAKIZIMANA Isaacar NTEZIMANA Elie

RULINDA Aimable UWIRAGIYE Ramla BIMENYIMANA Jeremie KAYITESI Alphonsine KIIZA Stephen MUKANKUBANA Didacienne KAYITESI Kayonga Sonia NIZEYIMANA Ismael Gomez UMUKUNZI Chantal MUSABIMANA Celine UWIZEYIMANA Gaspard HABAMENSHI Boniface MUNYANEZA Kizito NYIRAHABIMANA Therese NIYIRANGA Jean Marie Vianney UMUHIRE Alice NIYONSABA Esperance IYAMUREMYE Yves MUKANZIGA Alphonsine SEMUKUNZI Eric MUKAHIGIRO Marie Louise UWIZEYE Ngarambe Aline DUSINGIZIMANA Deo NSENGIMANA Marie Jeanne SHIKIRO Biseruka Celestin RUTABANA Uwanyirigira Aimee AJUWAMUNGU Yvette FARANGA Rambert AHISHAKIYE Said UMUGWANEZA Alphonsine UGUHIRWA Eduige UWIMANA Louise NDENGA Amon MUNGANYINKA Eugenie RUKUNDO Emmanuel MUKESHIMANA Olive NYIRIDANDI Fabrice Olivier NATUKUNDA Charlotte UMUHIRE Liliane KIRASANA Emmanuel KAMANZI Musigi Deo BATAMURIZA Yvonne MUTESI Renatha MUKANKURANGA Eulaire RUVUMBA Richard KAREMANZIRA Fidele KANANURA Aline Tendresse RUDAHUNGA Jean Claude

25

profile

26

Freight Logistics | ISSUE 5

Her rise to play a key role in the East African logistics industry and to remain the longest serving founder executive member of freight logistics organizations in Uganda and East Africa is purely accidental. She started her career in 1995 when she volunteered to work in a company she had invested in together with her relatives without any prior plans.

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ontrary to the conventional view that one should start a career path when still young and energetic, she beat all the odds and entered into business only after her four children had all grown up and the last one had finished primary schooling. Inexperienced, she testifies that she did not have a slight idea of what she was getting into when she joined freight forwarding industry, a largely male preserve career.

Mrs. Merian Sebunya is today one of the few women leaders in the freight logistics industry in East Africa.

Her experience spans close to two decades and she is among the founder members and the managing director of BTS Clearing and Forwarding Limited, one of the leading freight logistics companies in Uganda and East Africa.

She is also the chairlady of Uganda Freight Forwarders Association (UFFA) and the President of the Federation of East African Freight Forwarders Associations (FEAFFA).

When she got married, she was convinced by her husband, a civil servant, currently serving Uganda

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government as an ambassador, to abandon any career or business pursuits and concentrate on bringing up the four children they had sired together.

When she finished bringing up the children she was still young, able and willing to work. However, she had no concrete plans of what she wanted to do with the extra time her diminished family responsibilities had created.

“After spending so many years bringing up the children, I was now ready to put my hands to anything that was viable and going,” says Mrs Sebunya, who has also ventured in other businesses such as transport, mining, agriculture and film production.

As luck would have it, one day, in 1995, she happened to be in the same room with relatives who were discussing how they would form a freight forwarding business. This is how the group decided to register BTS. “I served the company for two years largely as a volunteer in office organization and administration, a feat that exposed me extensively to

the dynamics and operations of the logistics industry,” Mrs. Sebunya, who today cannot count all the positions she has held in the organizations dealing with logistics in Uganda and the region due to their huge number, says.

After two years, her exemplary performance saw her take charge of the company. Also as the only director who was not involved in any other responsibility, she was ideally the most appropriate person to take forte at the company.

“When the person who had championed the formation of the company had retired recently from civil service realized that the logistics business then, was so dynamic and too stressful for the retired,” Sebunya says with laughter. “I did not know what lay ahead for me.”

This is how she started a career journey, which she says though turbulent, had a lot to be celebrated due to the achievements she and the industry have made in the last two decades. She contends that for as long, she has spent over eighty

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profile percent of her time serving the entire industry as opposed to developing and running her business that is her main bread winner.

She entered the clearing and forwarding industry in Uganda when it was largely disorganized and had a very bad reputation. At a time the clearing agents were seen as thieves in many quarters.

“The situation was so distressing that I almost abandoned the business to cleanse the industry. To be called a thief! The journey was a tough one.

I don’t know why the industry was not run professionally despite its technicality” she says.

The desire to transform the industry was motivated by the fact that she felt that clearing agents were supposed to play a significant role, collecting customs taxes for Uganda Revenue Authority (URA), and the casual treatment they were getting was not commensurate to their responsibilities.

This is what made her join a clearing agent association that was in existence then and was immediately elected and served as the deputy general secretary.

However, she could not get the desired change to redeem the image of the industry. Her efforts to change the association went down the sewer pipes as the players refused to adopt her new change tactics and approaches on how to relate and operate with their principals, customs administration and other government agencies involved in logistics.

In 2000, she left the association and together with 11 other companies registered Uganda Freight Forwarders Association (UFFA) the first clearing agents’ association seeking a professional outlook. She was elected as its first general secretary.

“We realized that there were so many companies that wanted to take our path. Without much effort to market the association, they joined in trickle and the association today enjoys a membership of 102,” she said.

Once fully operational, the association took a deliberate path to partner with URA and managed to get recognized, appreciated, involved and consulted, which she says has significantly changed the freight and forwarding industry in Uganda.

Together with URA, the association has initiated a number of projects to professionalize the industry, adopted at regional level as well.

Also many other governmental and regional agencies have followed suit and recognized and supported professionalization of clearing agents.

Today, customs clearing and freight forwarding agents are very well organized and established at regional level and are discussing self regulation with EAC, it having been given a nod by the East African Revenue Authorities (EARAs).

“We do not take this as a mean

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achievement, it’s a vote of confidence and recognition of the maturity of the industry and the leaders and players therein” says the FEAFFA president.

Apart from chairing UFFA and serving as FEAFFA president, Mrs Sebunya is also a consultant in the freight logistics sector, Founder and Chairperson of Associated Freight Logistics Centre.

She serves on the boards of Uganda Road Fund, Private Sector Foundation Uganda and has served as Chair of Transport & Logistics Technical Working Group of the Uganda Presidential Investors Round Table Forum, chaired by the President of the Republic of Uganda.

She is also a board member of TradeMark East Africa, a consortium of donors supporting East Africa integration (Trade, Transport and Infrastructure mainly) among many other roles she is playing in the region.

“I have taken a bit from this world and I feel I should give back as much as possible in return by sharing what I have, time, knowledge and experience where needed. With lighter family responsibilities I am able to serve the industry diligently,” she says.

Mrs. Sebunya does not attribute her success to a university education. She describes her education background as “nothing to write home about”.

She studied secretarial and office management courses at Uganda College of Commerce, and advanced it at Kianda College in Kenya. She thinks her best education has been through self education and commitment to continuous development. She reads a lot and deeply, she says. Commitment to the cause is what has seen her stand out as a successful player and leader in the logistics industry in the region, she adds.

“I also pray a lot and my God has allowed my business and other pursuits to prosper while I was away

from them serving” she says.

She has created good structures in her business to allow it to operate without her daily involvement, she adds. To date, almost two decades since she started the company, she has not lost a single member of staff she started with.

“My employees are highly motivated and committed and are very happy to work in the company. Today’s technology and motivation has also played a significant role on how the company has progressed to be one of the most reputable firms in the region,” Mrs Sebunya adds.

In her view, despite the fact that the women are better placed to succeed in the logistics business than their male counterparts, they have not yet understood the customs and forwarding business well, hence their low participation.

“Women are fantastic planners and logistics is about planning and organization. They also have interpersonal skills, a key ingredient to success in this industry,” she says.

Unlike before when she was about the only woman running a logistic firm, women have today started joining the industry with commendable success.

And with the ongoing efforts to professionalize the industry, she says that the future is very bright for them.

The regional governments have also rolled out infrastructural projects and integration projects such as single window systems and single customs territory, which will remove non-tariff barriers, increasing the volume of business conducted in the region and improving the region’s competitiveness.

“Clients seem to trust women and more should join the industry,” she offers a parting shot.

Freight Logistics | ISSUE 5

Former President of FEAFFA, Mr.Bizimana Mathew and current President of FEAFFA Mrs. Merian Sebunya.

FEAFFA elects the first woman President

I

t has been known as a men’s business, involving, led and often managed only by men. This is how the customs clearing and freight forwarding industry has for long been known as. Not any longer as the norm and all expectations were exceeded to have not only FEAFFA’s first woman President but the first female industry leader to assume office without the backing of any affirmative action as is often the case. For some members of the regional freight logistics industry, the writing has been on the wall since 2012 when Mrs. Merian Sebunya became FEAFFA’s first Vice President. To these ones, this was the first major step towards the bigger dream. To the many accustomed to business as usual, all they saw was another woman deputizing before another man takes over. Sorry for those from the latter school of thought as the FEAFFA General Assembly made history and installed the first woman regional leader in the freight logistics industry. She joins other senior female leaders such as Nancy Karigithu of Kenya Maritime Authority and Rukia Shamte of SUMMATRA among others. The distinction though is that these belong to the public sector.

Merian who is also the Chairperson of Uganda Freight Forwarders Association and Managing Director of BTS Clearing and Forwarding company based in Uganda has been serving on the FEAFFA Board in numerous capacities. At one point she was nicknamed by some as mama FEAFFA. This got to the summit on Friday 23rd May 2014 at Protea hotel Entebbe where she was inaugurated as the new FEAFFA President Speaking shortly after her election, Merian Sebunya thanked all the past leaders of the Federation for their immeasurable contributions to FEAFFA. She added that her election brought a feeling of freedom, strength, ability to achieve the impossible and fulfillment to her. Merian promised to work diligently not to bring disrepute to all those who had entrusted her with the new position. “I promise to serve FEAFFA and our stakeholders diligently as I have always done for the last over 15 years since I joined this industry” emphasized

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Merian in her maiden speech. She outlined what her main goals would be for the next two years key among them ensuring the industry is recognized and remains relevant amidst the constant changes in the operational atmosphere. Merian requested for cooperation from the entire team with which she had been elected and pledged to work hard to ensure stability within the Federation and all its members.

In his remarks, one of FEAFFA’s former Presidents Mr John Bosco Rusagara under whose reign Merian served as the Secretary General expressed optimism that FEAFFA had been put in the right hands owing to the vast experience, knowledge and courage possessed by Mrs. Sebunya. He congratulated her and wished her and the new board the very best.

While handing over the FEAFFA instruments of power, the outgoing FEAFFA President Mr. Mathieu Bizimana congratulated Merian upon the achievement of being the first woman President of FEAFFA. He expressed joy and gratitude for handing over to a distinguished member and true servant of the freight logistics industry.

Bizimana pledged to continue serving along with Merian in his new capacity as the Immediate Past President.

Also elected to the Board were Mr. Stephen Ngatunga of Tanzania Freight Forwarders Associations (TAFFA) as 1st Vice President and Fred Seka of Association des Agences en Douane du Rwanda (ADR) as 2nd Vice President. Petit - Jean Ndikumana of Association Burundaise des Agences en Douane et Transitaires (ABADT) was elected Secretary General. Ndikumana is also the newly elected chairman of ABADT. The position of Treasurer went to Kenya International Freight and Warehousing Association (KIFWA). Other members include Philippe Ndikumana of ABADT, Gisele Umuziga of ADR and Waheed Saudin of TAFFA. The team is completed by Mr Mathieu Bizimana, the outgoing President. The new board will serve until March 2016 when a new team will be elected. Congratulations and wish you all the best as you takeover steering of FEAFFA.

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integration

Tanzanian President Jakaya Mrisho Kikwete

TANZANIA AND BURUNDI JOIN SCT

as Northern Corridor clears more products In addition to reducing multiple customs documents, the process allows bulk clearance of goods. In the previous arrangement, every truck had an export and import customs entry.

T

anzania and Burundi yielded the ground and joined the East Africa Single Customs Territory (SCT) by piloting from July 1 this year. In the Northern Corridor comprising Kenya, Uganda and Rwanda, the SCT project is at an advanced stage after being at the pilot stage for a long time. Tanzania and Burundi make up the Central Corridor.

Just like the case was in the earlier implementation between Uganda, Kenya and Rwanda where fuel was listed among the items running under the SCT clearance processes, the pilot with Tanzania commences with only a few commodities.

Uganda Revenue Authority said that the pilot will cover selected exports from Uganda to Tanzania such as cooking oil, soap, mineral water, cosmetics as well as selected exporters like Bidco (U) Limited, Mukwano Industries and Movit Products Limited.

The on-going trade activities in the region’s Northern Corridor indicate a shift from the tedious and lengthy customs clearance processes to shorter processes and reduced clearance times.

30

The implementation of the SCT between Uganda, Kenya and Rwanda has significantly reduced business costs since implementation commenced in earnest in February 2014. This is largely due to the new cargo clearance procedures and integrating ICT systems of the revenue authorities in the region.

Under the SCT clearance procedures, customs declarations are made electronically and the manifests processed and released by customs in the country of importation prior to loading of goods for export from the country of export. Taxes are determined and paid in the destination country.

According to URA, the roll out of the SCT will reduce cargo clearance delays, reduce clearance costs, eliminate multiple customs declarations and bond securities, ensure a seamless flow of goods and ultimately reduce the cost of doing business in the region.

For instance, in the case of Mombasa to Kampala, transit days have since reduced from 18 to four days. This has ensured a faster turnaround for trucks and a higher return on investment for transporters.

In addition to reducing multiple customs documents, the process allows bulk clearance of goods. In the previous arrangement, every truck had an export and import customs entry.

The elimination of multiple Customs (insurance) bonds – for goods in transit, a bond is executed to guarantee the taxes that would have been paid if the goods were to be consumed in Uganda.

The amount of a bond is equivalent to the tax one would have paid if the goods were sold in a given country. Cargo coming to Uganda had to be bonded from Mombasa and in Uganda if it was destined to Congo.

Based on the 2012 URA report on the volumes of cargo, the cost of bonds was estimated at $43m for containers leaving Mombasa for Kampala. Multiple bonding are no longer in use since importers utilise one regional bond.

Tanzania’s entry will further expedite trade facilitation in the region and grow East Africa into the economic powerbase that the leaders in the region envisaged with the launch of the SCT. The entry of Tanzania to SCT will end the qualms that had earlier arisen

Freight Logistics | ISSUE 5

over Tanzania’s commitment towards the achievement of an East African Community.

The questions stemmed from the decision by the governments of Uganda, Kenya and Rwanda to jointly fast track and implement infrastructure projects.

As a result, a new word, ‘Coalition of the willing’ in reference to the three countries was coined.

In a press statement issued by Vedastian Justinian, the Head of Communication at Tanzania’s Government Information Services Offices, the projects that were deliberated by the coalition should have been endorsed first by all the EAC member countries.

“This is notwithstanding the fact that the coalition of the three countries in exclusion of Tanzania and Burundi was being run under their respective foreign affairs dockets and not through the EAC secretariat,” the official was quoted by the media.

Apparently Justinian said the communication was in response to the growing concern among the public that the activities being advanced by the three EAC member countries would isolate Tanzania.

According to the statement, the official claimed that the Kenyan, Rwandan and Ugandan leaders were in contravention of Article 7(1) (e) of the EAC protocol.

“Even though this Article allows member countries to enter bi-lateral or tri-lateral agreements, it is a must that issues under consideration for implementation under this arrangement are fully discussed and agreed upon by all member countries,” read the reports.

Beverages such as mineral water, soft drinks and beer have been added onto items to be cleared under the SCT system. Other goods that have also been cleared under the system include; wines, spirits and plastics.

“Beginning June 16, 2014 the following (goods mentioned above) items imported from Kenya will be cleared using Single Custom Territory (SCT) procedures,” Uganda Revenue Authority (URA) public notice issued said. reads in part.

According to URA, inclusion of more items came after SCT successfully passed the experiment to clear fuel, neutral spirit, cigarettes, and cements from Kenya.

Furthermore, clearance of edible oils, steel products, milk and milk products and confectionary into Uganda from Kenya, proved that all items can undergo the same procedure—SCT. “All exports from Kenya to Uganda shall be cleared under SCT clearance procedures with effect from July 1, 2014. Under SCT clearance procedures, customs declarations are made electronically and are processed and released

by URA prior to loading of such goods for export from Kenya,” reads the public notice signed by the commissioner for customs URA, Mr Richard Kamajugo.

Despite the good intentions of the SCT, the Kampala City Trader Association (Kacita) chairman, Mr Everest Kayondo, recently said nothing much has been done in terms of

Freight Logistics | ISSUE 5

President Pierre Nkurunziza of Burundi sensitisation, leaving traders ignorant of such developments regarding the Single Customs Territory regional initiative.

“Traders have a mixed feeling about SCT because they do not have information. We suggest that sensitisation should not be broadly designed but packaged to suit the interests of the different sectors and industries, he was quoted.

In the recent past, customs clearing and freight forwarding agents have also been opposed to the SCT. However, in a recent workshop in Kampala, the industry through its regional president Mrs Merian Sebunya has since fully endorsed the new framework and called upon those who are still misinformed to follow suit and take advantage of the new system.

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31

integration

The final negotiations on admission of South Sudan to the EAC were to begin in January and end in April this year, just before the Summit, and submitted for a final decision.

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he South Sudan bid to join the East Africa Community was pushed further due to the ongoing conflict between government forces and those loyal to former vice president turned-rebel Riek Machar.

EAC presidents attending the Extraordinary Heads of State Summit in Arusha, Tanzania in May agreed that the final negotiations on the bid by South Sudan should begin in September following a request by Juba to defer the process to allow for national consultation and preparations.

South Sudan, in a letter to EAC Secretary-General Richard Sezibera, dated March 26, 2014, asked for up to six months before it can defend its application with the EAC high level negotiation team.

Specifically, Juba cited the need for it to create sub-technical committees, train civil society in EAC policy and programmes and sensitize the private sector and civil society.

“We reckon that in order to carry out these preparatory activities, South Sudan

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requires an additional five-six months before our country will be in position to commence the negotiations. We would, therefore, like to propose for the first round of the negotiations to take place sometime in the months of SeptemberOctober, 2014, at a mutually agreeable date,” reads the letter signed by Barnaba Marial Benjamin and Aggrey Tisa Sabuni, the Ministers in charge of Foreign Affairs and Finance respectively.

However, EAC officials’ privy to the bid said member states were “uncomfortable considering the application” when the country was in conflict and none of the protagonists was willing to stop the fighting.

A ceasefire agreement signed on January 23, in Addis Ababa, Ethiopia, under the aegis of the Inter-Governmental Authority on Development (IGAD) has failed to hold in the absence of a clear enforcement mechanism.

The final negotiations on admission of South Sudan to the EAC were to begin in January and end in April this year, just before the Summit, and submitted to it for a final decision.

Uncertainty about the political leaders’ commitment to the ceasefire deals has put great stress to the East Africa region leaders. Just a few years ago, Africa celebrated the birth of a new nation, which as it has emerged since the war erupted, had a lot of internal weaknesses to address before it changes the geopolitical strategy, economic and social welfare of the entire region.

While some analysts insist that the violence is political as opposed to a tribal one, there are concerns that the conflict is slowly running through ethnic lines with the Nuer tribe backing Machar while the President hails from the Dinka tribe.

But Mr George Omondi, a research fellow at the Kenya-based Africa Research and Resource Forum says that the issue of war being seen as tribal has been overplayed. The crux of the matter, he said, is that Dr Machar and his group feel that President Salva Kiir is consolidating power around himself and they would like to stop that.

“They want to stop Kiir from becoming like many African leaders who after independence forgot the national Freight Logistics | ISSUE 5

agenda,” says Omondi, adding that the fight is not new especially if one looks at the history of Sudan People Liberation Movement (SPLM) when in August 1991 Machar staged a failed coup against Dr. John Garang de Mabior, the founder of Sudan People’s Liberation Movement (SPLM). An estimated 2,000 civilians were killed as Dr Machar attempted to overthrow Dr Garang from the liberation movement’s leadership.

Due to its significance in the region, experts say that more efforts are needed by the African countries to solve the problem in South Sudan. There is need for a more committed and strategic approach by those brokering the peace.

“African countries have a responsibility to take swift and decisive action to solve the crisis in South Sudan. However, the world must also realize that South Sudan is not different from many African countries, as they are largely engaged in the fight against authoritarianism,” Mr Omondi said.

Mr. Omondi observes that even before the current crisis, it was clear that South Sudan had not achieved the minimum requirements to join East African Community (EAC). Most important, South Sudan has not built institutions required to make it a democracy. In 2013 civil society groups in South Sudan asked EAC not to admit South Sudan to the regional body until the country becomes democratic and stable enough.

Integration in East Africa has been

mainly economic. The crisis in South Sudan will derail the plans with Kenya to build an oil pipeline. It will also delay infrastructure projects that had been conceived particularly the ones that were to pass through South Sudan.

Ms. Phyllis Kandie, Cabinet Secretary in charge of East African Affairs in Kenya shares the same view that that war in South Sudan poses a serious challenge to the regional integration.

“Stable countries make strong regional entities. Therefore, it is in best interest of East African Community that South Sudan remains stable as civil war in the country could undermine social cohesion, political stability and economic prosperity

in the region,” said Kandie, who is also the Chair of the EAC Council of Ministers.

Being a political problem, says Omondi, the solution lies in politics. First there is need for a deal that is not based on power sharing, he says. The deal should be based on the state building projects that will focus on strengthening institutions and guarantee transitional arrangements.

While acknowledging the peace talk’s fragility and complexity, Kenya’s Ministry of Foreign Affairs in Kenya remains optimistic that a lasting solution will be attained. The Ministry is working with IGAD to resolve the South Sudan’s conflict.

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33

port news

Mombasa and Dar es Salaam

bet on new infrastructure to check threat from other ports

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he two ports on East African shoreline have geared up their infrastructure to tap in the growing transit trade being enhanced by good economic growth of the regions landlocked countries.

As the competition continues to grow between Mombasa and Dar port, there is an emerging threat from other Indian Ocean ports.

The share of Mombasa port as a common transit market has declined from 83.2 percent in 2008 to 74.8 percent in 2012, according to statistics in the five year strategic plan published by the Kenya Ports Authority (KPA) recently. For the period under review, the port of Mombasa lost an average share of 2.1 percent to the Dar es Salaam port on common markets.

Due to the fast rate of the growth of the regional economies, the transit traffic recorded sustained growth, increasing by 8 percent per annum, rising from 4,874, 258 tons in 2008 to 6,623,641 tons in 2012. Dar port grew its share of common transit market from 17.3 percent in 2007 to 25.2 percent in 2012.

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In line with its prospects of achieving regional transportation hub status, Tanzanian President, Jakaya Kikwete says his country’s plans to hike its cargo volumes by 40 percent over 2013 levels through the country’s main Dar es Salam port.

“If we invest in logistic centres, improve on infrastructure and create a facilitative environment, we can easily turn Dar es Salaam into another Dubai of its kind,” President was quoted saying recently.

He however pointed out that red tapes has held back the progress of the project by China Merchants Holdings (International) Co which has been appointed to build a new port, special economic zone and railway network at Bagamoyo, 75 km North of Dar es Salam. The project would cost more than $10 billion.

Tanzania like Kenya, that is building a new port at Lamu, North of Mombasa port, which is now East Africa’s main transport link to Uganda, Rwanda and other land-locked states, is capitalizing on a long coastline and upgrading existing railways and roads to serve

growing economies in the land-locked heart of Africa from Uganda to Malawi in the south.

According to President Kikwete, the projects include developing a port at Mtwara south of Dar es Salam that could serve northern Mozambique and Malawi.

It also involves upgrading the rail network – which could involve building new wider, standard gauge lines instead of the existing – and slower – narrow gauge.

Last month, a PwC report on the World Bank’s Global Logistics At least Performance Index ranked Tanzania as 88th, signifying the country’s progress in developing its transport infrastructure compared to some other African countries.

Tanzania, East Africa’s second-largest market, has one of the fastest growing economies in the world with key drivers drawing from its natural resources, especially in natural gas discoveries, regional integration and infrastructure investment.

Apart from the ongoing construction of the Lamu port, which has a natural

Freight Logistics | ISSUE 5

The share of Mombasa port as a common transit market has declined from 83.2 percent in 2008 to 74.8 percent in 2012... depth of 18 metres giving it capacity to handle post Panamax vessels, KPA is undertaking significant infrastructural and other reforms such as the recent Port Community Charter that sets standards expected from cargo interveners and private sector.

The ongoing construction of the 1.2 Twenty Foot Equivalent Units (TEUs) capacity second container terminal is also expected to enhance competitiveness of Mombasa port. The first phase involves construction of initial three berths scheduled for completion in 2016. The new berths will have an additional capacity of 450,000 TEUs, with two further expansion phases running through to 2020.

The other ports posing a serious challenge to the two ports include the ports of Ngqura and Elizabeth in South Africa.

Ngqura, the a new port located 20 kilometres from port Elizabeth is Africa’s deepest container port and lying on major routes.

“The port is poised to attract bigger container vessels from the Americas, offering more competition to Port of Mombasa,” a KPA strategic plan says.

Port of Durban in South Africa is situated in the Eastern seaboard of Africa same as the port of Mombasa and can accommodate post Panamax vessels of up to 8,000 Teus. The port has also invested in expansion and modernization projects to strengthen it as a regional hub and is set to receive transshipment containers destined to port of Mombasa “ The port is being used as an export port of loading Zambian copper despite being further the source markets than the port of Mombasa,” KPA notes.

The port of Djibouti is strategically located on the main shipping route straddling Africa, Asia and Europe. The port is a significant competitor to the port of Mombasa with regard to Ethiopian cargo and potential market in South Sudan.

Currently South Sudan is the second biggest transit market for cargo handled through the port of Mombasa.

“The port is well linked to Ethiopia by road and rail. It is also developing corridor linkages with South Sudan,” KPA says.

Freight Logistics | ISSUE 5

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35

infrastructure

World Bank injects US $ 300 in road construction

The final negotiations on admission of South Sudan to the EAC were to begin in January and end in April this year, just before the Summit, and submitted for a final decision.

T

he World Bank’s Board of Executive Directors approved US$300 million in funds from the International Development Association (IDA) to support the Government of Tanzania’s effort to create a reliable open access railway infrastructure, a statement made in Washington towards the end of April said.

The fund will be used to rehabilitate Dar es Saalam-Isaka section of the East African Central Corridor and to strengthen the countries rail agencies’ ability to manage the infrastructure, the traffic operations, and the network regulation, the World Bank announced. This project is a necessary first step to the eventual upgrade and expansion of the broader Central Corridor transport network.

“The location and the size of Tanzania, its mineral and agricultural resources, its tourism potential and its critical role as a transport hub for its landlocked neighbours, provide unrivaled opportunities for the development of modern transport infrastructure and services, said Philippe Dongier, the World Bank’s Country Director for Tanzania.

“We are excited to support the Government’s efforts to rebuild its rail and intermodal transport system. The project will also indirectly help to boost agricultural trade, job creation and overall livelihoods for the country and neighboring countries’ poorest people.”

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The financing will support the Intermodal and Rail Development Project designed to increase the reliability of the rail infrastructure and the train operations; strengthen logistics in the port of Dar es Salaam and the rail terminals; and strengthen rail operations. The funds will go to relaying rail tracks, building new intermodal terminals, repairing or reconstructing bridges and supporting the institutional transformation of the sector.

“Besides constraining economic activity in Tanzania and reducing the competitiveness of the country’s tradable sectors, poor infrastructure on the East African Central Corridor creates delays and high costs for transport of goods between Tanzania and its landlocked neighbors (Rwanda, Burundi, and Uganda), as well as the Democratic Republic of Congo (DRC)”, said Henry des Longchamps the World Bank Task Force Team Leader for the project.

He added; “The project will help improve a critical link in the regional rail network that is necessary for both competitiveness and improved regional and global economic integration.”

The project contributes to the World Bank Group’s (WBG) two broad goals of ending extreme poverty and boosting shared prosperity. Rehabilitating and

upgrading the rail line will improve the transport linkages for the population living in the western part of Tanzania, an area that has a high concentration of agricultural activity.

“The project will help increase transport capacity in Tanzania which will build competitive alternatives to road transport, and lead to greater traffic volumes that will facilitate the development of economic activities and job creation along the corridor areas,” said Yonas Mchomvu the World Bank co-Task Force Team Leader for the project.

Established in 1960, the World Bank’s International Development Association (IDA) helps the world’s poorest countries by providing zero-interest loans and grants for projects and programs that boost economic growth, reduce poverty, and improve poor people’s lives.

IDA is one of the largest sources of assistance for the world’s 82 poorest countries, 40 of which are in Africa.

Resources from IDA bring positive change to 2.5 billion people living on less than $2 a day. Since 1960, IDA has supported development work in 108 countries. Annual commitments have increased steadily and averaged about $16 billion over the last three years, with about 50 percent of commitments going to Africa, says World Bank.

Freight Logistics | ISSUE 5

New Road to Unlock ‘The South Namtumbo: CONSTRUCTION of a railway line to connect Mtwara Port in Mtwara Region and Mbamba Bay in Ruvuma Region to ease haulage of heavy cargo along the Mtwara Corridor in southern Tanzania is in the offing, President Jakaya Kikwete has announced.

Addressing a mammoth crowd at a public rally, the president said the government has found it ideal to construct the railway network to unlock the corridor to the rest of the country and the world.

“In our plans, there will come a time when we will be transporting one million tonnes of iron ore from Liganga and the same amount of coal from Mchuchuma Coal Mine in Iringa region in addition to one million tonnes of coal from Ngaka in Ruvuma Region.

“It is important that we put up the railway; we cannot transport such bulk cargo on our roads lest we destroy them despite heavy investments in their construction.

The railway line would also unlock investment opportunities in the region,” Mr Kikwete, who is on a six-day tour of Ruvuma Region, pointed out.

In another development, the African Development Bank (AfDB) has pledged to finance construction of a tarmac road between Mbamba Bay and Mbinga.

The AfDB’s Country Representative, Mr Tonia Kandiero, said the bank is ready to finance construction of the road to ensure that the entire 823km-road along the Mtwara Corridor is paved.

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infrastructure

HOLILI OSBP

Agreement to be Signed The border post will improve efficiency by reducing the total average time it takes to clear cargo at the two posts by 30 per cent, thus reduce transport costs and increase intra-regional and foreign trade.

E

ast Africa partner states are fast-tracking the setting up of one-stop border posts through bilateral agreements.

President Uhuru Kenyatta, in a recent visit to Taveta hinted that together with his Tanzania counterpart president Jakaya Kikwete, they will sign the agreement to operationalize the one stop border post.

The lack of legal clarity on the matter has seen the Holili border post, which was recently completed, remain idle, even after Tanzania and Kenya agreed to sign a bilateral agreement. While Tanzania has approved the accord, the Ministry of East African Affairs said the Kenyan Cabinet is yet to approve it.

The East African Community Legislative Assembly passed the One-Stop Border Posts Bill in April 2013, but it has not been assented to by the Heads of State summit. The one stop border posts can only be operatinalized through bilateral agreement between the states.

Theo Lyimo, a director at Trademark East Africa, who are the financiers of the project, in a recent interview, said bilateral agreements will be used until domestic

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laws are changed and the Customs Union Management Act is in force.

Under the integrated border post, immigration and Customs officials from neighbouring EAC member countries share offices to ease the clearance procedures for travellers and goods.

For instance, people entering Kenya will bypass Tanzania Customs and immigration offices at Holili and proceed to Taveta where the officers will work side by side with their Kenyan counterparts.

Likewise, those entering Tanzania will bypass Taveta and stop only at Holili where officials of both countries will work side by side. The Tanzania-Burundi Customs posts at Kobero and Kabanga has already been merged and are being used as a pilot project.

“Experiences at Kabanga/Kobero will be used as lessons for other border points,” Faraja Mgwabati, a communication consultant at Tanzania’s EAC Ministry said.

Holili border post in Kilimanjaro Region complete with state-of -the art facilities was ready since December, last year...

The border post will improve efficiency

by reducing the total average time it takes to clear cargo at the two border posts by 30 per cent which will contribute to reducing transport costs and increase intra-regional and foreign trade in East Africa.

Once operational, Tanzania is going to be the second country in East and Central Africa to unveil the ‘One-StopBorder-Station’ as Kenya bets on the new initiative to improve its share of cargo traffic through Mwatate-Taveta.

TMEA revealed that a total of 24 ‘Onestop-border-stations’ will be constructed all over the East African region along territorial boundaries where Kenya, Rwanda, Uganda, Burundi and Tanzania border one another as well as in Tunduma where Tanzania borders Zambia.

“We at TMEA are funding the constructions of 13 such OSBPs, the remaining 11 will be built by the World Bank (WB), the African Development Bank (AfDB) and Japan International Cooperation Agency (JICA),” stated Mr Lyimo in an interview early this year.

Once all OSBP around East Africa go into operation, the time spent at border Freight Logistics | ISSUE 5

posts connecting the five EAC member states will be cut down from two hours for ordinary travellers to about just 30 minutes. Cargo vehicles that are now forced to be delayed for up to three days at borders will in the OSBP future just spend three hours to be cleared.

The OSBP at Holili will also include a fully fitted medical centre to serve travellers, restrooms, full public internet connections via Wi-Fi, sanitation facilities as well as special departments to cater for small and medium scale traders who transact across the borders According to the officials, the completion of Taveta one-stop border post (OSBP) and construction of the road joining central Tanzania will significantly change the region’s trade dynamics in favour of Kenya as more cargo reverts to Mombasa Port and the Northern Corridor.

Once projects are complete, traders will have more choice with some of the Burundi-bound cargo, for instance, coming to Mombasa and leaving through the Northern Corridor.

The road will provide an alternative route to Tanzania’s Central Corridor. Kenya sees the two projects as fresh fronts in its battle for control of regional cargo after losing a significant portion of Rwanda and Burundi-bound cargo to the Port of Dar in the recent years.

Up to 2003, at least 60 per cent of Rwanda and Burundi cargo passed through Mombasa and the Northern

Corridor before traders began to shun the Kenyan facilities citing congestion at the port and insecurity and corruption on the roads.

Rwanda currently accounts for 3.9 per cent of the transit traffic at the Mombasa Port, having cleared 260,238 tonnes of cargo through Kenya in 2012. Over the same period, Burundi registered 39,160 tonnes or 0.6 per cent of total transit

traffic.

Among the structures at the Taveta OSBP are a police post, X-ray scanning facility, verification block, warehouse and animal holding unit.

Apart from Taveta, the same model is being constructed at Busia, Namanga, Isebania and Lunga Lunga. Others are expected to come up at the borders with South Sudan and Ethiopia.

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lapsset

Kenya prepares ground for

LAPSSET PROJECT

P

resident Uhuru Kenyatta recently gave prospective investors confidence of participating in the construction of the proposed second port and transport corridor after revoking the vast tracts of the stolen land in Lamu.

The planned $24 billion (18 billion euro) Lamu port project, due to be finished by 2030, is intended to serve much of east Africa, with oil pipelines to South Sudan and railways to Ethiopia and Uganda from the Indian Ocean coast.

The land, stretching over 2,000 square kilometres (800 square miles) was taken by 22 companies between 2011 and 2012, he said, ordering it to be repossessed.

The president said he had approved a $480 million deal with a Chinese company for the first phase of construction of three of the 32 berths planned for the flagship project.

“The signing of this contract… is a major milestone,” President Kenyatta said in a statement, saying the project would make Kenya the “most attractive transport and logistics hub” in the region.

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The project, known as LAPSSET — the Lamu Port South Sudan-Ethiopia Transport Corridor — includes not only a giant seaport to complement Kenya’s hugely overstretched main port in Mombasa, but also a railway, airport and refinery project and a road network.

Kenya has set aside 4.45 billion shillings (50 million dollars, 38 million euros) “to immediately commence” building by state-run China Communication Construction Company, Kenyatta said.

Officials said construction at the port — which has seen little activity since it was formally launched in a ceremony in March 2012 — would begin as soon as September. The port alone is projected to cost $3 billion.

Under the plans, the port will be able to handle some 24 million tonnes of cargo a year from giant container ships, as well as provide infrastructure to support oil discoveries made in Kenya’s arid north.

“Our country must develop the additional transport and infrastructure capacity to harness the immense mineral wealth that our country is now

discovering,” Kenyatta added.

The port zone is close to the UNESCOlisted tourist island of Lamu, once popular with high-paying visitors and Hollywood celebrities, but now off limits according to most travel warnings issued by Western nations.

Despite Kenyatta’s insistence that local groups carried out the attacks, Somalia’s Islamists say killings were further retaliation for Kenya’s military presence in their country.

Last September, militants killed at least 67 people in an attack on Nairobi’s Westgate mall in which were killed. Over 100 people have also died in the Lamu area attacks.

Kenya’s Mombasa port currently serves the landlocked nations of Burundi, Rwanda, Uganda and parts of the Democratic Republic of the Congo.

But the port is overstretched and businesses complain of delays to clear cargo, a particular problem as it is facing growing competition from ports in neighbouring Tanzania.

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