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We’re ready to pay high fees to avoid SGR, say car importers

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Shipping & Logistics

We are ready to pay high levy to avoid SGR, say car importers

Inland Container Depot in Embakasi
Containers at the Inland Container Depot in Embakasi, Nairobi. FILE PHOTO | NMG 

A section of importers have made a proposal to increase the Railway Development Levy (RDL) from the current 1.5 percent to three percent and be allowed to choose other means of clearing their goods other than the use of Standard Gauge Railway (SGR) freight trains which they consider costly.

Car Importers Association of Kenya (CIAK) chairman Peter Otieno said the importers are ready to pay more levy so that they are allowed to clear their goods through their preferred means as opposed to being compelled to use the SGR and the Nairobi Inland Container Depot (ICD), which have posed a lot of challenges.

The push by importers comes even as the Kenya Ports Authority (KPA) gave a notice to shipping lines and their agents to stop endorsing bulk goods for clearance at the Container Freight Stations (CFSs).

This means that rice, fertiliser, cooking oil, project cargo, second-hand clothes and bitumen will now be transferred to the ICD, which is set to stretch the capacity of the facility even further.

“Shipping lines shall not be allowed to endorse Bill of Lading (BL) to importers’ CFS of choice,” KPA Managing Director Dr Daniel Manduku said in the notice published in local dailies on Saturday.

“We wish to assure importers that the government has put in place measures that will streamline cargo clearance processes at the ICD and Mombasa to ensure clearance within the free period granted by the Authority,” he added.

The car importers, however, said Tuesday that taking more cargo to the ICD will compound the current existing problem of delays and lack of storage space.

Mr Otieno said importers would be ready to part with double the current rate of the RDL to enable the government service the Sh327 billion Chinese loan, only if this will allow them to clear their goods at their convenience.

A committee appointed by the Transport ministry to look into ways of reducing the cost of transporting goods via the SGR last week said it costs $1,420 for a 20-foot container to be transported by rail to the ICD as opposed to $650 by road. The high cost accrues from storage charges due to delays, last mile transport and cost of transporting back empty containers to shipping lines designated yards in Mombasa.

“Importers prefer to import goods through CFSs because some of them don’t have storage yards yet at times they want to access raw materials at short notices,” Mr Otieno told Shipping & Logistics in a telephone interview.

“They enter into agreements with CFS operators who charge them lower storage rates and access their materials at their convenience.”

However, in a move expected to radically transform how goods are handled at the port and ICD, the government has endorsed a proposal to kick out 23 agencies from the facilities.

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The committee presented its report to the Transport Cabinet Secretary James Macharia and Head of Public Service Joseph Kinyua with recommendations that the agencies should operate outside the port and ICD to rid cargo clearance procedures of “bureaucracy and unnecessary delays”.

There are 27 cargo interveners operating in the facilities, making procedures so bureaucratic that simple processes take several days, resulting to delays and huge costs to importers.

Only KPA, the Kenya Revenue Authority (KRA), Kenya Bureau of Standards (Kebs) and Kenya Railways (KR) will remain at the facility, with all the other procedures being done outside the port.

“The problems we experience are not of our making. When say a container is held because there are verifications to be done or they have been found to contain counterfeits, they occupy the port’s storage area, congesting the facility,” said a source at KPA who sought anonymity due to the sensitivity of the SGR operations.

“This is why we are saying that every other process must be done out of the port.”

It is also understood that capacity at the ICD which stands at 450,000 Teus would be expanded by a further 150,000 Teus, with KPA board having already endorsed the plan, according to the source.

In 2014, 25 agencies signed the Mombasa Port Community Charter, a binding pact with the aim of improving efficiency at the port. The organisations were drawn from government agencies, private sector, civil society and interest groups who are key players on the Northern Corridor route.

They were supposed to operate with the KPA MD co-ordinating their activities, although the initiative seems not to have achieved much with bureaucracy having taken root, resulting to inefficiencies.

Removing the agencies from the port is expected to provide a life line to CFSs since all the other procedures are likely to be carried out in the facilities which are customs-controlled areas. The SGR freight service has dealt a heavy blow on CFSs operations, with all domestic cargo being transported to the ICD.

Those familiar with the decision say matters to do with public health, anti-counterfeit, pest control and a host of other services will be done in CFSs with goods being released from the port under the customs seal.

At the same time, stakeholders in Mombasa have asked the government to go back to the drawing board and involve them to address problems facing transportation of goods to the ICD.

Hezron Awiti, former vice president of the Federation of East African Freight Forwarders Associations (FEAFFA) said the industry has in the recent years been able to address challenges through a multi-sectoral approach involving all players.

“Today, there is a lot of inconsistency in the manner the government agencies handle goods, which has seen the cost of transport on rail increase compared to what road transporters are offering,” said Mr Awiti who is also the managing director Habo Agencies Limited and former Nyali MP. Failure by the government to interrogate the role of the private sector in the wake of the SGR operations now threatens to kill the economy of Mombasa which largely relies on logistics, according to Mr Awiti.

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World Bank pushes G-20 to extend debt relief to 2021

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World Bank Group President David Malpass has urged the Group of 20 rich countries to extend the time frame of the Debt Service Suspension Initiative(DSSI) through the end of 2021, calling it one of the key factors in strengthening global recovery.

“I urge you to extend the time frame of the DSSI through the end of 2021 and commit to giving the initiative as broad a scope as possible,” said Malpass.

He made these remarks at last week’s virtual G20 Finance Ministers and Central Bank Governors Meeting.

The World Bank Chief said the COVID-19 pandemic has triggered the deepest global recession in decades and what may turn out to be one of the most unequal in terms of impact.

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People in developing countries are particularly hard hit by capital outflows, declines in remittances, the collapse of informal labor markets, and social safety nets that are much less robust than in the advanced economies.

For the poorest countries, poverty is rising rapidly, median incomes are falling and growth is deeply negative.

Debt burdens, already unsustainable for many countries, are rising to crisis levels.

“The situation in developing countries is increasingly desperate. Time is short. We need to take action quickly on debt suspension, debt reduction, debt resolution mechanisms and debt transparency,” said Malpass.

ALSO READ:Global Economy Plunges into Worst Recession – World Bank

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Kenya’s Central Bank Drafts New Laws to Regulate Non-Bank Digital Loans

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The Central Bank of Kenya (CBK) will regulate interest rates charged on mobile loans by digital lending platforms if amendments on the Central bank of Kenya Act pass to law. The amendments will require digital lenders to seek approval from CBK before launching new products or changing interest rates on loans among other charges, just like commercial banks.

“The principal objective of this bill is to amend the Central bank of Kenya Act to regulate the conduct of providers of digital financial products and services,” reads a notice on the bill. “CBK will have an obligation of ensuring that there is fair and non-discriminatory marketplace access to credit.”

According to Business Daily, the legislation will also enable the Central Bank to monitor non-performing loans, capping the limit at not twice the amount of the defaulted loan while protecting consumers from predatory lending by digital loan platforms.

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Tighter Reins on Platforms for Mobile Loans

The legislation will boost efforts to protect customers, building upon a previous gazette notice that blocked lenders from blacklisting non-performing loans below Ksh 1000. The CBK also withdrew submissions of unregulated mobile loan platforms into Credit Reference Bureau. The withdrawal came after complaints of misuse over data in the Credit Information Sharing (CIS) System available for lenders.

Last year, Kenya had over 49 platforms providing mobile loans, taking advantage of regulation gaps to charge obscene rates as high as 150% a year. While most platforms allow borrowers to prepay within a month, creditors still pay the full amount plus interest.

Amendments in the CBK Act will help shield consumers from high-interest rates as well as offer transparency on terms of digital loans.

SEE ALSO: Central Bank Unveils Measures to Tame Unregulated Digital Lenders

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Scope Markets Kenya customers to have instant access to global financial markets

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NAIROBI, Kenya, Jul 20 – Clients trading through the Scope Markets Kenya trading platform will get instant access to global financial markets and wider investment options. 

This follows the launch of a new Scope Markets app, available on both the Google PlayStore and IOS Apple Store.

The Scope Markets app offers clients over 500 investment opportunities across global financial markets.

The Scope Markets app has a brand new user interface that is very user friendly, following feedback from customers.

The application offers real-time quotes; newsfeeds; research facilities, and a chat feature which enables a customer to make direct contact with the Customer Service Team during trading days (Monday to Friday).

The platform also offers an enhanced client interface including catering for those who trade at night.

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The client will get instant access to several asset classes in the global financial markets including; Single Stocks CFDs (US, UK, EU) such as Facebook, Amazon, Apple, Netflix and Google, BP, Carrefour;  Indices (Nasdaq, FTSE UK), Metals (Gold, Silver); Currencies (60+ Pairs), Commodities (Oil, Natural Gas).

The launch is part of Scope Markets Kenya strategy of enriching the customer experience while offering clients access to global trading opportunities.

Scope Markets Kenya CEO, Kevin Ng’ang’a observed, “the Sope Markets app is very easy to use especially when executing trades. Customers are at the heart of everything we do. We designed the Scope Markets app with the customer experience in mind as we seek to respond to feedback from our customers.”

He added that enhancing the client experience builds upon the robust trading platform, Meta Trader 5, unveiled in 2019, enabling Scope Markets Kenya to broaden the asset classes available on the trading platform.

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