Kaburu Mugambi
21 March 2006
Nairobi — World Bank has approved US$120.6 million (Sh8.68 billion) aid to Kenya under its trade and transport facilitation project. The project will fund implementation of the East African Community Customs Union and provide institutional backing for transport.
Finance ministry Permanent Secretary Joseph Kinyua said the funding, approved last month, would make it cheaper for businesses to operate in the country through improved transport network and simpler customs procedures.
Kenya got the lion's share of the US$184 million World Bank's kitty for the three East African countries, with Uganda receiving US$26.4 million and Tanzania US$37 million.
Mr Kinyua said the signing of the East African Customs Protocol to harmonise trade terms as well as on-going revisions of other multilateral and bilateral agreements have resulted in both access to markets and serious challenges in terms of competition.
The trade facilitation project's support includes long-term funding for the EAC Secretariat. The project also covers equipment support for a modern customs integrated system and common database, and strengthening and modernisation of national customs departments.
The support for transport facilitation will involve strengthening of the Northern Corridor Transit Transport Coordination Authority. The funding will also support governments to establish an appropriate management mechanism for the Central Transport Corridor, and help improve and harmonise regional transport policies and regulations.
The bank says transport costs, delays and uncertainty in East Africa result in a situation that compares only to Central Asia and Central Africa. On average, dwell time at the Port of Mombasa is about 13 days and average transport time between Mombasa and Kampala is estimated at between five and six days.
However, approximately 5 per cent of containers spend more than four weeks at the port and a similar number arrive in more than nine days in Kampala. Also, recent studies by World Bank show that the cost per tonne-kilometre to/from Rwanda to Mombasa through the Northern Corridor is twice between Nairobi and Mombasa.
Reducing the cost and improving the quality of transport and logistics services increases trade. High transport and logistical costs in East Africa are caused by the poor condition of infrastructure, underdeveloped transport and logistics services, as well as by slow and costly bureaucratic procedures for dealing with imports and exports.
Be the first to Write a Comment!
Copyright © 2006 The Nation. All rights reserved. Distributed by AllAfrica Global Media (allAfrica.com). To contact the copyright holder directly for corrections — or for permission to republish or make other authorized use of this material, click here.
AllAfrica aggregates and indexes content from over 125 African news organizations, plus more than 200 other sources, who are responsible for their own reporting and views. Articles and commentaries that identify allAfrica.com as the publisher are produced or commissioned by AllAfrica.
