Sunday, August 17, 2014

PRESIDENT UHURU’S DUTY WAIVER ON DIASPORA HAS PITFALLS

There is no denying, we need rules regulating all imports to the country especially on sensitive materials like: drugs, alcohol and other consumables. However, there are certain restrictions that should scrap in order to create a flexible environment for business in the Country. 

The recent directive by President Uhuru Kenyatta while on a tour to the US, to waive custom duty on cars owned by Kenyans returning home was merely a political

enticement. Kenyans are aware that we are under a new dispensation where the President can say yes while the law says the opposite.  

Kenyans in the Diaspora should not just jubilate about the President’s directive, but ask the government to do more in fast-tracking the improvement of cargo clearance at the port of Mombasa as well as to amend or scrap some import rules which do not augur well for importers.

While the President’s directive is intended to benefit Kenyans returning home from countries where left-hand cars are a norm to buy right-hand cars in another country and have it cleared duty free, there is a rule on motor vehicle importation which makes the directive elusive unless the rule it’s scrapped or amended.

Remember, to qualify for a duty waiver, Kenyan returnees must have owned a car for not less than 365 days. This caveat makes Uhuru’s promise sound like Moi’s old roadside declarations. The deal sounded sweet but to me, very fictional- a returning Kenyan flies from US; lands in Uganda or Japan, and buys a right hand car which is less than 8 years and have it cleared duty free upon entry to Kenya!

First of all, the President should rally his Jubilee government to scrap the 8 years age on all imported vehicles into the country, scrap the restriction on left-hand vehicles and 365 days ownership period. With this, we can believe his word.

Let us not be brainwashed. Duty waivers have been in existence for all returning Kenyans so long as the vehicle they bring in are less than 8 years and of right-hand drive mode… I therefore challenge Kenyans in the Diaspora who are praising President Uhuru first learn about our import rules on motor vehicles.

Nip corruption at the Port
I personally think that the government should do more to improve on cargo clearance at the Port of Mombasa, ensure that, there is integrity in the process, right from the time a consignment docks, up to the time it’s handed to the importer.

Importers go through hell at the Port in their quest to clear cargo. Many are often compelled to bribe during the processing of import document especially in the notorious “Long Room” building in Mombasa, where money speaks.

Clearing and forwarding agents often work in cohort with Kenya Revenue Authority (KRA) and Kenya Bureau of Standards (KBS) personnel to intentionally delay the clearance process by demanding bribes.

The tragedy is: If an importer fails to bribe, the documentation process can be intentionally delayed to trigger a last-minute rash to beat the grace period allowed for clearance. At this point, the importer is desperate and can bribe to avoid the accrual of demurrage on the cargo which increases daily after the expiry of the grace period.

These are the challenges President Uhuru and his Jubilee government should address urgently because it demoralizes all business people across the board. Picking a single item to entice Kenyans in the Diaspora was mere a PR stunt to spur his political base abroad.

Government double standards
On over-age vehicles, Kenyans are tired of double standards in the application of the law. If the over-age vehicles former Tinderet MP Henry Kosgey cleared in 2011, are still running on Kenyan roads, why can’t the law be scrapped all together?

Giving a free-hand to the ruling elite who violate the law; only to punish the “small guys” s a great injustice. Our laws are meant to protect the interests of all citizens irrespective of their class or status.

Worse still, there are many luxurious left-hand vehicles on the Kenyan roads; often owned by famous people, thereby amplifying the culture of double-standards in the country. One wonders how these vehicles are cleared at the port of Mombasa.

Authenticating road-worthiness on imported vehicles
On road worthiness, all vehicles imported must have a detailed inspection report from the country of origin. Secondly, we need to have standby local inspectors to authenticate what is stipulated in the foreign inspection report.

 If a vehicle is found to be unroadworthy, the importer should be compelled to do necessary repairs under strict supervision of the ministry of transport before the vehicle is registered and allowed to run on Kenyans roads. If the vehicle fails to meet the standards of road-worthiness, the government should decline registration and declare it as a write-off. The owner can be advised to sell it as salvage for spare parts.  

Bureaucracy in a developing country kills economy
By and large, we need more automobiles on our roads to consume our oil inTurkana. Vehicle owner will pay road levies, buy insurance premiums and spare parts, employ mechanics and drivers as well as transporting goods and services within Kenya and the surrounding regions. All these will improve revenue collection to boost Kenya’s economy.

We are behind in research; behind in manufacturing; and behind in technology. Its good economics when a developing country gives room for local and foreign investors to trade in an environment of less bureaucracy and more flexibility in the exchange of goods and services.

It beats no logic when a developing country is engaged in too much bureaucracy when doing business. After all, is Kenya better than Nigeria, which has fewer restrictions on the vehicles they import? Our western neighbour-Uganda does not have restrictions on automobile importation yet, they have the most organized public transport system in East Africa.

We are on low ebb economically; struggling to be at par with the emerging economies like: Hong Kong and Singapore. We can’t even manufacture a needle; leave alone a bicycle tube yet, the government want us to import newer vehicles and a total ban on left- hand vehicles into the country.

Kenya is down there; decades away to even compete with the industrialized world like Japan, US, France and Germany. For me, if it’s drivable from Kilindini Port to Busia, it’s good.


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