New Berth Shows Kenya Is Ready To Fight

The president’s reiteration that we are custodians of the Gateway to the East Africa upon whom our regional brothers depend brought a ray of hope that the Mombasa Port is deadly serious about maintaining its lead over any competition that can be mustered south of Kenya’s border.

Uganda President Yoweri Museveni’s commissioning of the Sh5.6 billion facility and the presence of Rwandan President Paul Kagame during the occasion that will be hosted by President Uhuru Kenyatta underlines the fact we’re still number one in the race.

But that should not make us complacent. Although the new berth increases the port’s capacity by 33 per cent, the country will only be able to keep its lead position only if it maintains the momentum of the changes it has been undertaking recently to fix the failures that have allowed Dar-es-Salaam to steal business away from Mombasa. As it stands, the amount of cargo meant for the hinterland of Uganda, Rwanda, Democratic Republic of Congo and Burundi that has been diverting from Mombasa and going through Dar-es-Salaam has grown by an average of 25 per cent annually.

That President Kenyatta is aware of the need for Mombasa to retake its position as the leader is clear from his directives in June aimed at massive reforms at the port and along the transport and logistics corridor. The directive required the Kenya Ports Authority MD of to take charge of all the operations around the facility to reduce delays. The directive also required institutions to work round the clock and abolished the scanning of trans-shipment cargo and trans-shipment bonds.

It also required alignment of organisations’ processes to be compatible with the National Single Window Systems and removed roadblocks and weighbridges except for the one at Mariakani.

And now, the new berth, constructed at an estimated cost of Sh5.8 billion means that the port now has additional capacity of 200,000 twenty-foot equivalent per annum. This will greatly help ease the movement of cargo in the region and boost the attractiveness of Mombasa port in the face of competition from neighbouring Tanzania.

These are all signs of progress though much work remains to be done. An effective port backed by an effective infrastructural network will do a lot towards propelling the country towards greater prosperity.

And while the law of competition may be sometimes hard for the individual, it is best for the race, because it ensures the survival of the fittest in every department.
– Andrew Carnegie

 

 

| 30 Aug 2013

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The Jubilee Government and Sufuria Economics

| Dr. Oduwo Noah Akala

The three month old Jubilee Government a fortnight ago presented its first of five national budgets to the people of the Republic. The proposed budget amounts to massive 1.6 trillion shillings…More than the Ugandan and Tanzanian national budgets combined! This ambitious financial plan is on the back of exuberant electoral promises made by now President Uhuru Kenyatta and his Deputy William Ruto during the course of the campaign period. This also has to be the first time in modern Kenyan history that a Finance Minister, now referred to as the Treasury Cabinet Secretary, Mr Henry Rotich, has said in Parliament that “I do not know where the money will come from.”

Kenya is in a peculiar socio-economic and political conundrum. This is because in our country, the minority of the population is employed and earning an income. It thus follows that it is this minority that pays tax which funds Government and all of its activities. Yet, when it comes to choosing a Government, it’s the majority who are unemployed and do not pay tax that have the final say. The non-tax paying majority essentially decides how tax revenue generated from the taxpaying minority is going to be spent.

This imbalance in the system is an austerity ticking time bomb as the tax burden on the employed minority increases year after year to service impractical programs of which we have been presented with a host. It is important to note that the budgetary deficit amounts to roughly fifty percent. It is common knowledge that any budgetary deficit is a tax just waiting to happen; it’s not a question of if but when.

The idea behind applying a Value Added Tax on basic commodities was actually the International Monetary Fund’s. This is not a new concept. It was one of the recommended pre-conditions to the Kenyan Government prior to the release of donor funding. The idea being to tax consumption and allow relief on income tax so as to spread the tax net wider. However, the Jubilee Government has deemed it wise to hit the Kenyan people with both a relatively high Pay As You Earn tax as well as a Value Added Tax of 16% on consumption. The Kenyan worker is bound to groan under the weight of expectation from the tax man.

Even more difficult to fathom are moves such as taxing welding rods and applying VAT on sanitary towels. Welding rods are used by Jua Kali artisans working in small scale businesses across the country. Jua Kali artisans are the face of micro-enterprise in Kenya. A tax that burdens small business while big corporates are raking in profits of billions is not only immoral but inequitable as well. With regards to sanitary towels, we had made progress in the past five years by first making them tax free and following that up with a Programme to provide girls in public schools with sanitary towels for free. This basic intervention ensured no girl ever missed school for natural biological reason and girl child performance improved drastically. Why tax sanitary towels now? What will happen to the Sanitary Towels for Public Schools Programme?

All these taxes would not be a problem if the people were receiving a commensurate level of service from their Government. Sweden has an income tax rate of fifty percent! But, the public transport is reliable and extensive, healthcare is catered to by the Government and so is education up to University level. The end result is that this Scandinavian nation has one of the highest standards of living in the world. We, as Kenya, are nearing this level of taxation yet we have forty percent of our population living on less than a dollar a day, the world accepted indicator for poverty!

This is what has informed the raft of industrial action that the Government is facing from public servants across the board. Teachers have issued an ultimatum to go on strike from midnight today on the back of the Government failing to honour a Collective Bargaining Agreement dating back to 1997 and yet this same Government presents an ambitious 54 billion shilling Laptop Programme. Nurses in the National Referral Hospital followed suit. Expect the same in the coming weeks from doctors.

I put it to you, that this Government is disconnected from the hopes and ambitions of the Kenyan people. Our leadership is not in tune with what we as Kenyans aspire to.

Uhuru efficiency order causes jitters at KPA

| Ishaq Jumbe

New directives by President Uhuru Kenyatta that are meant to streamline efficiency at the Port of Mombasa is putting pressure on the top management of the Port to deliver within the shortest time possible.

portThe President has ordered that Kenya Revenue Authority’s (KRA’s) Customs Department be based at the Port and report directly to Mr. Gichiri Ndua, the Managing Director. This means that Mr. Ndua will drive the turn-around with no excuse that has been the norm in the past of frustration from other government agencies that take part in facilitation of faster cargo clearance.

The new directives come after a consultative meeting between the President and all Government agencies that are involved in cargo clearance at State House in Nairobi.

Sources confirmed to Coast This Week that the directives now put pressure on Mr. Ndua and that his job is already on the line should there be no turn-around in a month’s time. The spotlight is now on the MD whose contract was renewed by the former Transport Minister Amos Kimunya before the lapse of the last Government.

The new vigour by the Jubilee Government is underlined by a visit by Uhuru when he was still President-elect and those that worked with him at Treasury, when he was Minister, saying that he is keen on making Mombasa Port competitive.

“He has always been concerned why the Port was not efficient and he is determined to have it work soonest,” said a close aide to the President, who wished not to be named as he is not authorized to speak on behalf of the President.

The President is also believed to be ready to overhaul the Port management should they fail to implement the new directives.

At the same time, lobbying for the Chairman of the KPA Board of Directors is in high gear after the expected lapse of the current chairman, Mr. Shukri Barmadi’s tenure. He has served three terms and during his time he has spearheaded notable developments at the port including the ongoing construction of the second Container Terminal. It is not clear if he is interested in seeking the chairmanship again.

The new 24-hour operations directive also puts banks and clearing and forwarding companies on their toes with threats that should they be seen to be an impediment, their operating licenses would be withdrawn.

Meantime, in the raft of proposed changes, the Head of State also ordered the immediate digitization of the clearing process and the modernization of weighing of cargo. He further ordered the upgrading of Simba system and fast-tracking of the single window system that will automate the clearing process.

The President wants the Transshipment Bond abolished with immediate effect. He further said Clearing and Forwarding Service companies and transit sheds located inside the Port should be removed to ease congestion. Many local bigwigs have sheds and CFS’s within the Port.

“It is a nightmare directive by the President. It was unthinkable two months ago that the CFS’ and sheds which are owned by some of the richest and well connected individuals in Mombasa would be removed from the Port area,” said an employee of one of the CFS’.

President Kenyatta said preferential treatment will be given to goods that are pre-certified and issued with certificates of conformity from the port of origin as opposed to those which will not have been certified.

The Head of State further said that a KEBS laboratory in Mombasa should be in place by 2014 to avoid relying on the laboratory in Nairobi which causes delays.

To ease traffic congestion, President Kenyatta said the Government will prioritize the construction of a dual carriageway from Changamwe to Jomvu.

The President also ordered the formation of a special committee tasked with the responsibility of rejuvenating the railway transport system so as to accommodate more cargo, saying this will also reduce destruction of roads as well as road carnage.

He said weighbridges will also be modernized, adding that container goods weighed at Mariakani and with untampered seal will be allowed to travel to Malaba without further inspection at police roadblocks.

The President pointed out that roadblocks will be replaced with mobile traffic surveillance. In this regard, President Kenyatta urged the private sector to support the electronic vehicle tracking system to take effect without further delay.”

KPA Public Relations Manager Mr. Bernard Osero said the port is ready to handle the directive and believe they have the capacity to improve for the better.

“It is a positive move that is going to improve the effectiveness of the port and ease congestion in a big way. The president’s intervention is very timely. We at the port were able to implement the retired president’s Kibaki’s directive on 24 hour operations without a hitch and we are equally ready to implement what the president ordered,” he said in an interview.

He confirmed that meetings have been held to fast track the president’s edict and already the groundwork to accommodate the Commissioner of Customs and all the other players are being put in place.

“Kenya is very strategic and the port in particular is a government facility and therefore it is in order to have the Presidents involvement without the media reading mischief in instruction,” he said.

Mr. Wellington Kiverenge, the acting Kenya Transport Association (KTA) CEO said that he was positive that the move will ease congestion at the port. “We laud the president for stepping in to help the users of the port. With the banks and the clearing firms threatened with license revocation, the process should be easier now as opposed to what they were used to having in the past,” he said.

He said his members, with trucks estimated at 10,000 are looking forward to an effective 24 hour service.