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• Trade Facilitation Can Enhance Economic Competitiveness Says Kenya’s Trade Minister

Trade Facilitation Can Enhance Economic Competitiveness Says Kenya’s Trade Minister

3 June 2004

Kenya's Minister for Trade and Industry, Dr Mukhisa Kituyi

Kenya's Minister for Trade and Industry, Dr Mukhisa Kituyi, said trade facilitation can bring about desirable economic objectives to a country. Trade facilitation involves simplification, standardisation, harmonisation and elimination of procedures in international trade transactions.

Speaking at the launch in Mombasa, Kenya, on 19 May 2004, of a Commonwealth technical assistance project to promote trade facilitation, Dr Kituyi stated that cumbersome trade procedures have served as bottlenecks to trade and investment.

These included data requirements, administration and bureaucracy, which have led to the high cost of doing business. He said estimates from various studies have put the cost at between 2.5 and 15 per cent of the value of goods traded globally. It is thus vital for governments to improve the business climate and economic competitiveness for local and foreign entrepreneurs and investors.

"The importance of trade facilitation to economic development of any country is indisputable," stated Dr Kituyi. "The facilitation of trade procedures locally, regionally and internationally is seen by all major international business actors as vital for economic growth, job creation and poverty reduction. It is also a competitiveness issue in the efforts to attract foreign direct investments and to improve the environment of doing business."

He said a clear strategic plan with a strong political will and commitment is crucial for the successful implementation of trade facilitation procedures, and stressed the need for close co-operation between the business community and government agencies. Long-term technical assistance would also be required to promote capacity-building in trade facilitation.

"The effects and costs of trade facilitation are a major concern to developing countries," said Dr Kituyi. "Any reforms should be tailor-made to minimise any negative effects and be easy to implement. Much can be achieved by focusing on procedures and regulations that increase transparency, trust and communication."

Angela Strachan, Chief Programme Officer of the Commonwealth Secretariat's Special Advisory Services Division, said that through this technical assistance project, efforts will be made to help develop and present a framework to the government on mechanisms to create a more efficient approvals system for the goods-clearing process and a more effective means of facilitating trade.

"We have to look into the excessive documentation requirements for the export of goods," commented Ms Strachan. "The lack of automation and the inadequate use of information technology are also other impediments to trade. Co-ordination must be improved among public agencies responsible for facilitating trade. Increased transparency and clarity on import/export procedures must also be in place."

Ms Strachan said a 'one-stop shop' trade facilitation strategy is important to support Kenya's trade development and foreign investment activities, particularly in export-oriented industries. Agricultural and manufacturing sectors will benefit from the reduction in the processing time for the clearance of goods that has been causing delays in the export chain. This will improve the overall efficiency of production and distribution of goods locally and abroad, besides lowering the costs and reducing the wastage of time.

"The streamlining of administrative procedures involved in conducting trade will not only remove discretion at the level of some officials and other persons in the trade transaction chain, but should also contribute to improving business transparency," stated Ms Strachan.

She added that the technical assistance, which is funded by the Commonwealth Fund for Technical Co-operation, will enable Kenya to prepare for compliance with the World Trade Organisation standards for international trade in this area.

CNIS - the Commonwealth News and Information Service Issue 186 2 June 2004