Kenya Customs Agents and Freight Forwarders Bill 2020: Here’s how it impacts regional trade

The recently launched Kenya Customs Agents and Freight Forwarders Bill 2020 has been introduced with the aim of enhancing professionalism in service delivery and ensuring compliance with existing regulations. This initiative is designed to address the challenges faced in the industry, such as cargo delays at ports, clearance issues, misclassification problems, and unprofessional behavior among agents. To shed light on these matters, Fredrick Aloo, the Secretary General of the Kenya International Freight Forwarders and Warehousing Association, discussed the impact of the bill with CNBC Africa. A significant aspect of the bill is the requirement for agents to engage in continuous professional development to stay updated on industry trends. This emphasis on ongoing training reflects the broader scope of the logistics sector and its importance for overall efficiency. The bill is not only beneficial for Kenya but also holds value for the East African region as a whole. One of the key challenges addressed by the bill is the issue of cargo delays at the ports. Aloo highlighted that only 48% of the 5600 containers handled weekly at the inland container depot in Nairobi are cleared on time within the specified grace period. Factors contributing to delays include misclassification and evaluation errors, as well as the presence of unprofessional agents. By focusing on professionalism and compliance, the bill aims to improve efficiency in cargo clearance processes and reduce delays. Another vital aspect of the bill is the regulation of clearing agents and the prevention of unauthorized personnel posing as legitimate agents. By setting minimum standards and aligning fees with VAT regulations, the bill seeks to formalize the industry and deter fraudulent practices. This standardized approach will not only enhance transparency but also contribute to revenue collection by ensuring that all services rendered by customs agents are subject to appropriate taxation. Furthermore, the bill addresses the issue of misdeclaration by emphasizing the need for agents to be knowledgeable about industry requirements. By equipping agents with the necessary skills and knowledge, the bill aims to eliminate misdeclaration practices and promote compliance with regulations. This proactive approach will have a positive impact on the economy by reducing costs associated with delays and ensuring smoother operations at the ports. In terms of employment within the customs agents and freight forwarding sector, Aloo provided insights into the current scenario. As of 2018, there were approximately 800,000 registered customs agents in Kenya. However, a significant challenge lies in the fact that less than 30% of these agents have undergone the necessary training. When considering the total number of individuals indirectly employed in the sector, the figure exceeds 5,000. This highlights the importance of training and professional development initiatives to enhance the capabilities and efficiency of industry practitioners. Overall, the Kenya Customs Agents and Freight Forwarders Bill 2020 represents a step towards improving professionalism, efficiency, and compliance within the industry. By tackling existing challenges and promoting best practices, the bill is poised to have a positive impact on regional trade and contribute to the enhancement of the country's economy.