Kenya Trade Network Agency (KENTRADE) is State Corporation established in 2011 under the National Treasury to implement, operationalise and manage the National Electronic now officially known as Kenya TradeNet in Kenya as well as to facilitate trade.

FREQUENTLY ASKED QUESTIONS

KENYA TRADE NETWORK AGENCY (KENTRADE)

Simplifying Trade Processes for Kenya’s Competitiveness

What is TradeNet?

TradeNet is basically a trade facilitation tool. It is a facility in the form of an electronic platform that allows parties involved in trade and transport to lodge standardised information and documents with a single entry point to fulfill all import, export and transit related regulatory requirements.

The platform has the intelligence to disseminate electronically eht ot sreppihs morf deviecer noitatnemucod ecnaraelc ograc

relevant authorities for relevant approvals and processing. Since cargo documentation is transmitted electronically, it is submitted through the TradeNet only once and the same is transmitted to the relevant authorities.

In a TradeNet environment, all the players in international trade such as Government agencies (customs, transport, health and standards etc), intermediaries (freight forwarders, customs, port and terminal operators) and exporters/importers are integrated in one information technology gateway which is the single window platform through which they complete their procedures for the movement of goods in a simplified framework at minimum time and cost. The Single Window process removes subjectivity since it is an electronic process with minimum human intervention.

What is the current trade facilitation scenario in Kenya?

The Kenyan Government recognizes the importance of international trade as a powerful vehicle for wealth and employment creation. However, the current clearing system for cargo at various border points faces a number of problems that comprise Kenya’s ability to maximize on the benefits accruing from international trade.

Currently, documentation procedures associated with international trade in Kenya are largely manual, resource intensive and expensive. In addition, traders have to deal separately with a multiple of government agencies that have no electronic systems.

sessecorp noitatnemucod edart fo ycneicfifeni gniliaverp ehTinflicts perennial problems of delays in clearance of goods

fo tluser eht ,ytinummoc gnidart eht no strop nayneK eht tawhich is high transaction costs. At the moment, the average logistics in Kenya is significant averaging around 35 percent of the cost of insurance and freight (CIF) value of the imported goods. This element continues to be a major international trade and international competitiveness of Kenya.

How will the TradeNet facilitate trade in Kenya

The TradeNet System will facilitate trade by expediting and simplifying information flows between traders and Government in order to bring meaningful gains to all the parties involved in the cross border trade. The overall

objective the Project is to facilitate International trade in Kenya by reducing delays and lowering costs associated with clearance of goods at the Kenyan borders, while maintaining the requisite controls and collection of levies, fees, duties and taxes, where applicable, on imports or exports. The specific objective is to reduce cargo dwell time at the Port of Mombasa to a maximum three (3) days and a maximum of one (1) day at the Jomo Kenyatta International Airport over a period of 1 year after operationalization. At the border posts the Single Window System is expected to reduce the cargo dwell time for both transit and intra-regional trade consignments to a maximum of one (1) hour.

What is KENTRADE’s role in Implementation of the System?

Best practices require that TradeNet operations are ot ,ytitne etaroproc tnednepedni na yb yllartnec deganam

enable appropriate governmental authorities and agencies to receive or have access to the information relevant for their purposes. In Kenya, the Government established Kenya Trade Network Agency (KENTRADE) as a State Corporation for this purpose. The mandate also includes trade facilitation which is one of the areas that the Single Window addresses.

Who are the stakeholders of the TradeNet System?

There are a significant number of Government agencies who are interveners in the cargo clearing processes and private sector institutions that are involved in the international trade regulatory processes. Key stakeholders of the Others are Shipping Lines; Shippers Council of Eastern Africa; Ship Agents; Airlines Ground Handlers; Kenya Transport Association; Pre-shipment permit issuing organizations such as Tea Board of Kenya, Pharmacy & Poisons Board, Horticultural Crops Development Authority; Insurance Companies; Commercial Banks and Development Partners (Donors). The list is endless because of the cross-cutting nature of the Project.

How will the Kenya TradeNet System benefit Kenya?

The foremost benefit of the TradeNet System is that it will bring about greater harmonization and better sharing of the relevant data across Government Departments/Systems and result in improved efficiency, transparency and effectiveness of official controls enhance revenue collection and reduce costs of doing business for both the Government and the business community.

Additionally, all manifests and cargo declarations (Sea, Air and Land) will be lodged through the TradeNet platform which will transmit the same electronically to the relevant Government Agencies for clearance/approvals and collection of government revenue. The Single Window will be a win-

win situation for all parties involved in international trade. Additionally there will be numerous benefits to the economy, the business community and to the government some of which are listed below:

To the economy:Reduced trade transaction costs; delays inefficiencies; Improved governance; Reduced manual documents/paperwork; Reduced cost of capital; Reduced demurrage and; Improved space and capacity utilization.

To the Business Community:Simplified trade information exchange; Faster trade documentation processing; Reduced errors with minimized data re-entry; Improved efficiency & transparency through elimination of manual processes; Lower business costs e.g. port storage charges, container demurrage, labour costs;

;dna stcudorp nayneK rof ssenevititepmoc labolg desaercnIImproved traceability.

To the Government:Enhanced Revenue yields; Improved trader compliance; Enable use of dynamic “Risk Management” techniques for control and enforcement purposes; More effective and efficient deployment of resources; Availability of Trade Statistics; Enforcement of controls laid down by domestic policies and International agreements; Improved international competitiveness of Kenya, Foreign Direct Investment and trade.

Explain briefly roadmap to Roll out of the TradeNet System in Kenya.

TradeNet is basically a business project which uses the power of ICT as an enabler. The implementation of the single window has been a challenging but rewarding experience. The process has involved several activities the first being business process mapping and re-engineering.

It took over 216 meetings and 7 months to go through the process of Business Process Re-engineering (BPR). This process entailed analysis and redesign of existing procedures to bring about inefficiency in a process. The project team engaged stakeholders in a comprehensive BPR exercise in order to understand the current procedures and propose the most efficient procedures in international trade. The stakeholders involved were Shipping Lines/Agents, KPA, KRA, Consolidators, Government Regulatory Agencies.

The Business Process Re-engineering exercise laid the metsyS eht htiw pu emoc ot EDARTNEK rof noitadnuof

Requirements Specifications which were then documented in the System Requirement Specifications (SRS) document. The SRS document was then signed off by all the stakeholders

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Select, sort, filter information, routes

it to targeted recipients (agencies,

bank, etc.) in the proper sequence

or flow and returns responses to trader

Trader or Agent submits all information required for shipment once to the Single Window Service provider

Responses from the various authorities and financial institutions are returned to the Trader or Agent. An all-positive final response denotes cargo clearance

Plant Quarantine

Animal Quarantine

Tobacco BoardInsurance

Company

CUSTOMS

Chambers of Commerce

BANK

HERE ARE SOME OF THE FREQUENTLY- ASKED QUESTIONS ON THE ROLL OUT OF THE KENYA TradeNet

Physical Address: First Floor Embankment Plaza, Longonot Road, Upperhill Hill.P. O. Box 36943-000200 Nairobi.

Landline: +254 (20) 2614896Email Address: info@kentrade.go.ke

Website: www.kentrade.go.ke

eht rof sisab eht demrof sihT .ecnatpecca yfingis ot devlovnisystem development.

Subsequent to finalization and signing off the SRS, the system developers began the system development phase of software development lifecycle. System development was completed in June, 2013.

How do you intend to roll out the System?

The System roll-out signifies an important milestone when a system is switched on and starts to operate. The roll-out strategy entails allowing a subset of the stakeholders to use the System, what is referred to as pilot. The roll-out date was October 31, 2013.

We have adopted a soft launch approach in the roll out of the System. This approach in keeping with implementation of Single Window Systems in other countries. The approach helps to manage the scope of the project and uses a sample of stakeholders in a live pilot phase which commenced on October 31, 2013.

The piloting stage will also involve 10 out of 24 Government Agencies and 40 private sector companies involved in cargo clearance processes. The rest of the users will be brought on board in the begining of December 2013 after they have been trained in the month of November.

How will KENTRADE coordinate the many multiple Government agencies and the private sector stakeholders involved in trade facilitation?

One of factors critical in implementation of the system is stakeholder’s involvement and investment in Change Management. We are in constant engagement with our stakeholders at every stage of System implementation. So far, we have received tremendous support and co-operation from our parent Ministry the National Treasury, Government Agencies like Kenya Revenue Authority, Kenya Ports Authority, and Kenya Bureau of Standards, Kenya Plant Health Inspectorate among others.

nwo sti sah ARK ,noitamotua ot semoc ti nehWclearance system called SIMBA and KPA has its online system called KWATOS. So what difference does more automation and centralization make?

It is not only KRA and KPA which are involved in cargo clearance. There are over 24 other Government Agencies/departments involved in the import, export and transit cargo clearance processes in Kenya some of which have systems and some of which have manual processes. TradeNetSystem will however not replace the SIMBA or KWATOS Systems but will integrate with the two systems among others.

Apart from integrating with these systems,TradeNet System is an electronic platform which will serve as a single entry point for submission/approvals of cargo clearance documentation; the electronic platform will ensure that other government agencies to operate efficiently through ensuring that information is shared instantly with all stakeholders involved.

How will the TradeNet System work with regards to Hardware/Software and manpower?

The TradeNet System will encourage interoperability with the systems of stakeholders involved in trade logistics in the country. Additionally, it will be web based and will be accessible 24/7. Traders will be able to submit electronic documents from anywhere at any time as long as they have the relevant authorization in the System. The country will save a lot in manpower/man hours as there will be no need for submission and processing of hard copy documents which are labour intensive and expensive to process and prone to

ton seod tnemnorivne wodniW elgniS ,revewoH .noitpurrocnecessarily imply the implementation of high tech Information and Communication Technologies (ICT).

e TradeNetht rednu edam eb stnemyap lliw woHSystem?

The TradeNet System will be integrated with the National Payments System (NPS) via a Payments Gateway (PG) to facilitate online payments for trade documentation which will provide an end to end trade logistics process. Efforts to develop the PG are headed by the Central Bank of Kenya (CBK) and KENTRADE working with other key stakeholders such as Kenya Bankers Association (KBA), Kenya Revenue Authority (KRA) and ICT Authority among others.

What are chances of manipulating TradeNet System?

Chances of manipulating the system are very slim. Just like any other system KENTRADE is putting in place robust security measures using the most current technologies available. KENTRADE has put in place a team of competent technical staff working with others to ensure that the platform meets international security and integrity standards.

What challenges have you faced in setting up of TradeNet and how have you been able to address them?

First, we wish to thank H.E. the President for the tremendous support and interest that he has shown in the Single Window System Project since its commencement. Managing

private sector: There is always fear of change on new projects especially those of cross cutting nature like implementation of the Single Window. One of the challenges encountered was for our stakeholders to underst and KENTRADE’s mandate and specifically the role of the Single Window in supplementing systems of other GoK agencies.

This was overcome by carrying out a rigorous sensitisation and awareness campaign targeting both the public and private sector. The campaign was designed to address different focus groups and was carried out across the country in the counties of Nairobi, Mombasa, Kisumu, Busia, Kericho, Uasin Gishu, Nakuru, Kiambu, Kilifi and Migori. These campaigns will be continued in other counties even after the system roll out. Apart from the sensitizations, we engaged the stakeholders in the planning and implementation processes at all stages to ensure that they are part of the process.

The TradeNet has been developed by Singapore Cooperation Enterprise (SCE) who will maintain it for 3 years. What are the safeguards for a smooth handover in terms of technical and maintenance skills transfers?

The process of implementation of the System began in ,ycnatlusnoc rof lavorppa evag tenibaC eht nehw 2102 yaM

acquisition, and implementation of the National Electronic Single Window System from Singapore Cooperation Enterprise (SCE) through a Government to Government (G2G) arrangement between GOK and the Government of Singapore. The System in Kenya will be operated by KENTRADE. SCE (CrimsonLogic) will provide system support over the three year period during which time there will be knowledge transfer to KENTRADE personnel who will

ot si nalp ehT .metsys eht fo ecnanetniam eht revo ekathave CrimsonLogic train and build capacity for KENTRADE to be able to fully operate and maintain System after this period.

What savings will be realized as a result of full implementation of the TradeNet System?

The TradeNet System is not a new concept. It is operational countries such as Singapore, Korea, Malaysia,

Mauritius, Tunisia and Ghana to mention but a few. Studies from these countries indicate large savings to the economies realized via; Reduced trade transaction costs; Reduced delays; Reduced In efficiencies; Eradication of corruption in trade logistics; Reduced manual docume nts/pap erw ork; Reduced cost of capital (JIT Concept; Reduced demurrage; Improved space utilization at ports-Increased capacity utilization for higher volume turn-over.

In Kenya the streamlined procedures towards faster clearance of goods across Kenyan borders is expected to bring an average reduction of 5 days in clearance of cargo at the seaport. Based on present volume of goods imported and transited through the country, it is estimated that the resulting yearly savings to the Kenyan economy during the first 3 years will range between US$150million (approx Kshs.10.5 billion and US$ 250 million (approx Kshs. 17.5 billion) annually. This will increase to between US$ 300 million (approx. Kshs. 21billion) and US$ 450 (approx. Kshs 31.5billion) annually in subsequent years.

In Singapore and Malaysia where the Single Window System has been in operation for over 10 years, the savings to the economy are US$ 1 billion and US$500 respectively annually. In Ghana, there was a 35 per cent increment in Government revenues for three years consecutively after the roll out of the Single Window System.

What are the factors that you consider to be important for success implementation of TradeNet System?

The implementation of the System is a challenging but fulfilling project. It entails proper strategic planning, effective use of information technologies, securing financial and human resources and indispensably, the more importantly political support.

To ensure an effective deployment of a national single window, a significant amount of business process simplification and re-engineering and information technology adoption are vital, together with the application of key international standards and a significant collaborative effort between the public sector and the private sector. KENTRADE has been lucky because all the stakeholders have provided the support needed to ensure successful implementation of the System.

wodniW elgniS eht gnitnemelpmi fo stfieneb eht lliWSystem be realized immediately?

The implementation of the TradeNet is a gradual process and the benefits will also be gradual. But more importantly, TradeNet concept is becoming a virtual national gateway to international trade. The more effective the role of the TradeNet, the more efficient the complete import/export process becomes, leading to national competitiveness where both the Government, the traders and the citizens benefit.

Will the Implementation of the TradeNet System lead to job losses?

No, TradeNet System will not lead to loss of jobs. The System will instead enable the bus ines s environment to trade efficiently. An improved business environment will most likely lead to reduced cost of doing business and increased efficiency in trade. This will lead to increased productivity, efficiency in trade transactions and attract Foreign Direct Investment which will instead create more jobs.

How is the Single Window System Project being funded?

The Project is funded by the Government of Kenya (GoK) with support from the Investment Climate Facility (ICF) and the International Finance Corporation (IFC).