dubai exports kenya - economic overview & trade analysis
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KENYA - ECONOMIC OVERVIEW & TRADE ANALYSIS EIP/MTR/023/07/2016
(MARKETREPORT)
ExportInitiatives&PartnershipsDivision,
Phone:+9714‐4455333;Fax:+9714‐4455355E‐mail:[email protected];Web:www.dedc.gov.ae
POBox123336,Dubai–UAE
Primary Information Sources: Prepared – July, 2016
Disclaimer: While all attempts have been made to collect & present accurate information, DE makes no warranty, express or implied, as to the fitness,
appropriateness of the above information for a particular purpose, or assumes any legal liability for the accuracy or usefulness of any contained information.
All 3rd. party information sourced are either through subscriptions of the organization or information freely available on the internet.
TABLE OF CONTENTS
# Description Page
1 Economic Overview (Trading Economics) 3
2 WTO Trade Profile (World Trade Organization) 8
3 Country Report (Euler Hermes) 9
4 Economic Freedom Score (Heritage Foundation) 11
5 Economy (African Economic Outlook.Org) 13
6 Risk Report (COFACE) 26
7 Logistics in East Africa through Kenya (RSA Logistics) 28
8 Conformity Assessment Program for Exports to Kenya (INTERTEK) 46
9 Top Products imported by Kenya and Main Sourcing Countries (ITC Trade Map) 66
10 Doing Business In Kenya (World Bank) 74
KENYA: Economic Overview
The East African nation of Kenya has an estimated population of 46.1 million, which increases by one million a year. With support of the World Bank Group (WBG), International Monetary Fund (IMF) and other development partners, Kenya has made significant structural and economic reforms that have contributed to sustained economic growth in the past decade. Development challenges include poverty and inequality, and vulnerable of the economy to internal and external shocks. Political Context Devolution is rated the biggest gain from the August 2010 constitution, which ushered in a new political and economic governance system. It is transformative and has strengthened accountability and public service delivery at local levels. The government’s agenda is to deepen implementation of devolution and strengthen governance institutions, while addressing other challenges including land reforms and security to improve economic and social outcomes, accelerate growth and equity in distribution of resources, and reduce extreme poverty and youth employment. Economy Kenya’s growth is projected to rise to 5.9% in 2016 and 6.1 % in 2017. The positive outlook is predicated on infrastructure investments. Fiscal consolidation is expected to ease pressure on domestic interest rates and increase credit uptake by the private sector. The contraction in the current account deficit will continue to be supported by declining commodity prices and rising exports of tea. Sound monetary policy restored stability in the currency markets and contained the 12-month average overall inflation at 6.6% in December 2015. The Central Bank effectively managed currency volatility and running down Forex reserves to cushion the shilling. So, the Kenya shilling stabilized, and the depreciation moderated in comparison to other regional currencies. Low commodity prices had a net positive impact in Kenya in 2015. The gains through low oil prices and the rising earnings from tea have offset the loss in earnings from other exports (coffee and horticulture). As a result, the current account deficit contracted from 10.4% to 7.1% of GDP. According to the October 2015 Kenya Economic Update, Kenya is poised to be among the fastest growing economies in Eastern Africa. Besides, the 2016 Country Economic Memorandum says that Kenya’s growth prospects will depend a lot on Innovation, Oil, and Urbanization on the long term. Social Developments
Kenya has met a few of the Millennium Development Goals (MDG) targets, including reduced child mortality, near universal primary school enrolment and narrower gender gaps in education. Interventions and increased spending on health and education are paying dividends. Devolved health care and free maternal health care at all public health facilities will improve health care outcomes and develop a more equitable health care system. Development Challenges Kenya has the potential to be one of Africa’s great success stories from its growing and youthful population, a dynamic private sector, a new constitution, and its pivotal role in East Africa. Addressing challenges of poverty, inequality, governance, low investment and low firm productivity to achieve rapid, sustained growth rates that will transform the lives of ordinary citizens, will be a major goal for the country. Last Updated: Apr 08, 2016 Source: http://www.worldbank.org/en/country/kenya/overview Kenya is one the most developed countries in East Africa. Agriculture, Forestry and Fishing (including coffee and tea cultivation) is the largest sector of the economy and accounts for about 22 percent. Manufacturing is the second largest sector and represents around 11 percent of the GDP. Other major sectors include: Real Estate (about 8 percent of total GDP), Wholesales and Retail Trade (around 7 percent), Transport and Storage (around 7 percent) , Education (about 7 percent), Financial and Insurance Activity (around 6 percent) and Construction (around 5 percent). GDP Annual Growth Rate
The Gross Domestic Product in Kenya grew by 5.6 percent in 2015, compared to a 5.3 percent growth in 2014. Agriculture was the major contributor to the expansion ( grew 5.6 percent from 3.5 percent in 2014), followed by manufacturing (3.5 percent from 3.2 percent in 2014), transport and storage (7.1 percent from 4.6 percent), real state (6.2 percent from 5.6 percent), construction (13.6 percent from 13.1 percent) and financial and insurance activities (8.7 percent from 8.3 percent). In 2016, the economy is expected to advance 6.8 percent. GDP Annual Growth Rate in Kenya averaged 5.41 percent from 2004 until 2015, reaching an all time high of 12.40 percent in the fourth quarter of 2010 and a record low of 0.20 percent in the fourth quarter of 2008. GDP Annual Growth Rate in Kenya is reported by the Kenya National Bureau of Statistics.
GDP per capita
The Gross Domestic Product per capita in Kenya was last recorded at 648.84 US dollars in 2014. The GDP per Capita in Kenya is equivalent to 5 percent of the world's average. GDP per capita in Kenya averaged 485.87 USD from 1960 until 2014, reaching an all time high of 648.84 USD in 2014 and a record low of 155.69 USD in 1960. GDP per capita in Kenya is reported by the World Bank.
Ease of Doing Business
Ease of Doing Business in Kenya improved to 108 in 2015 from 129 in 2014. Ease of Doing Business in Kenya averaged 110.25 from 2008 until 2015, reaching an all time high of 129 in 2013 and a record low of 84 in 2008. Ease of Doing Business in Kenya is reported by the World Bank.
Balance of Trade
Kenya recorded a trade deficit of 72360 Million KES in April of 2016. Balance of Trade in Kenya averaged -36753.60 Million KES from 1998 until 2016, reaching an all time high of -2175 Million KES in June of 1999 and a record low of -119463 Million KES in September of 2014. Balance of Trade in Kenya is reported by the Central Bank of Kenya.
Exports
Exports in Kenya decreased to 52556 Million KES in April from 54029.60 Million KES in March of 2016. Exports in Kenya averaged 26911.95 Million KES from 1998 until 2016, reaching an all time high of 59405 Million KES in July of 2015 and a record low of 9007 Million KES in January of 1999. Exports in Kenya is reported by the Central Bank of Kenya. Agricultural products are central to Kenya's export industry with horticultural and tea being the most important. Other export items include textiles, coffee, tobacco, iron and steel
products, petroleum products, cement. Kenya main exports partners are UK, Netherlands, Uganda, Tanzania, United States and Pakistan.
Imports
Imports in Kenya increased to 124916 Million KES in April from 114420.69 Million KES in March of 2016. Imports in Kenya averaged 63660.62 Million KES from 1998 until 2016, reaching an all time high of 162942 Million KES in November of 2015 and a record low of 13453 Million KES in January of 1999. Imports in Kenya is reported by the Central Bank of Kenya. Kenya imports mostly machinery and transportation equipment, petroleum products, motor vehicles, iron and steel, resins and plastics. Kenya main import partners are India, China, UAE, South Africa, Saudi Arabia, United States and Japan.
Source: Trading Economics, http://www.tradingeconomics.com/Kenya/indicators
99Download the data:www.wto.org/statistics
World Trade OrganizationTrade Profiles 2015
BASIC INDICATORS Population (thousands, 2014) 45 546 Rank in world trade, 2014 Exports ImportsGDP (million current US$, 2014) 60 937 Merchandise 104 80GDP (million current PPP US$, 2014) 132 530 excluding intra-EU trade 79 57Current account balance (million US$, 2014) - 6 339 Commercial services 80 100Trade per capita (US$, 2012-2014) 649 excluding intra-EU trade 53 73Trade to GDP ratio (2012-2014) 52.0
2014 124
Exports of goods and services (volume, 2010=100) 111Imports of goods and services (volume, 2010=100) 131
TRADE POLICY WTO accession 1 January 1995 Contribution to WTO budget (%, 2015) 0.059Trade Policy Review 21, 23 November 2012 Import duties collected (%, 2011-2013) GPA accession - in total tax revenue 7.8Tariffs and duty free imports to total imports 3.4
Tariff binding coverage (%) 14.8 Number of notifications to WTO and measures in force MFN tariffs Applied 2014 46
Simple average of import duties Goods RTAs - services EIAs notified to WTO 2 - 1All goods 95.1 12.8 Anti-dumping (30 June 2015) ...
Agricultural goods (AOA) 100.0 20.3 Countervailing duties (30 June 2015) ...Non-agricultural goods 57.0 11.5 Safeguards 0
0.0 0.20 - 0
32.9 Original panel / Appellate Body (AB) reports 0 - 0 69.7 Compliance panel / AB reports (Article 21.5 DSU) 0 - 0
Services sectors with GATS commitments 40 Arbitration awards (Article 22.6 DSU) 0 - 0
MERCHANDISE TRADE Value2014
6 115 18 396
2014 a 0.03 0.10
Breakdown in economy's total exports
Agricultural products 50.8 Agricultural products 11.5Fuels and mining products 13.8 Fuels and mining products 22.8Manufactures 33.5 Manufactures 63.8
1. European Union (28) 21.9 1. India 18.32. Uganda 11.9 2. European Union (28) 14.63. Tanzania 7.7 3. China 12.94. United States 6.3 4. United Arab Emirates 8.35. Pakistan 5.1 5. Japan 5.9
COMMERCIAL SERVICES TRADE Value2014 2013
4 027 2 698
2014 0.08 0.06
Breakdown in economy's total exports By principal services item
0.5 2.9 54.4 56.2 20.1 7.6 25.0 33.2
INDUSTRIAL PROPERTY
Madrid Total 1 825 4 864
September 2015
Kenya
Annual percentage change2010-2014 2013 2014
Real GDP (2010=100) 5 6 53 -1 27 0 10
Final bound
Non ad-valorem duties (% total tariff lines) Number of disputes (complainant - defendant) Requests for consultation
in agricultural goods (AOA) in non-agricultural goods
Annual percentage change2010-2014 2013 2014
Merchandise exports , f.o.b. (million US$) 4 -4 4Merchandise imports , c.i.f. (million US$) 11 0 12
2014 aShare in world total exports Share in world total imports
Breakdown in economy's total imports By main commodity group (ITS) By main commodity group (ITS)
By main destination By main origin
Annual percentage change2010-2014 2014
Commercial services exports (million US$) 7 4 0Commercial services imports (million US$) 9 -4 22
2014Share in world total exports Share in world total imports
Breakdown in economy's total imports By principal services item
Goods-related services Goods-related services Transportation Transportation Travel Travel Other commercial services Other commercial services
Patent grants by patent office, 2013 Trademark registrations by office, 2013Residents Non-residents Total Direct residents Direct non-residents
1 70 71 1 883 1 156
Outstanding notifications in WTO Central Registry
MFN duty free imports (%, 2013)
a Breakdowns by destination/origin refer to 2013.
Kenya
Economicrisk
Financingrisk
Commercialrisk
Politicalrisk
Businessenvironment
risk
Large domestic market (population 45mn and
member of a regional trading bloc, East African Community, which is expanding and offering good business opportunities.
Vibrant horticultural and tourism sectors, although
the latter is volatile, subject to domestic political stability and regional security concerns.
Regional energy sector has significant potential (including offshore gas fields), with direct
(exploitable reserves within Kenya’s territory) and indirect (inputs through Kenyan ports and exports from them) benefits.
Strategic importance: regional economic hub.
Poor record in terms of political party and individual
rivalries and ethnic, tribal and religious divides, which spilled over into violence in 2008. Despite a relatively successful election process in March 2013, these fault
lines remain in place.
Regional uncertainties (including Somalia, piracy and terrorist activity).
Classified as a lower-middle income economy by the World Bank, with associated need to maintain aid and
other external assistance flows.
Chequered relationship with the IFIs and wider donor community, partly reflecting perceptions of corruption.
Twin deficits in fiscal and current accounts.
Strengths
Large twin deficits but strong GDP growth trajectory
Trade Structure
GDP USD60.94bn (World ranking 74, World Bank 2014)
Population 45.55mn (World ranking 30, World Bank 2014)
Form of state Republic
Head of government Uhuru Kenyatta
Next elections 2018, presidential and legislative
Source: UNCTAD
General Information
Euler Hermes Economic
Research
Kenya
Country Report
By destination/origin (% of total)
Rank
Uganda 14% 1 14% India
United Republic of Tanzania 9% 2 12% China
United Kingdom 8% 3 11% United Arab Emirates
Netherlands 6% 4 5% Saudi Arabia
United Arab Emirates 6% 5 5% United States
Exports Imports
By product (% of total)
Rank
Coffee, tea, cocoa, spices, and
manufactures thereof25% 1 26%
Petroleum, petroleum products and
related materials
Crude animal and vegetable materials, 10% 2 7% Road vehicles
Vegetables and fruits 8% 3 6% Cereals and cereal preparations
Petroleum, petroleum products and
related materials5% 4 4% Iron and steel
Articles of apparel & clothing
accessories4% 5 4% Textile yarn and related products
Exports Imports
Source: Euler Hermes
Country Rating
Weaknesses
View all Euler Hermes Economic Research online http://www.eulerhermes.com
Contact Euler Hermes Economic Research Team
Last review: 2016-03-30 Country Risk Analyst:
Andrew Atkinson [email protected]
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Latin America plus Mexico
Mexico
Colombia
Venezuela
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6%General gov. gross debt (right
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General gov. net lending (left
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Foreign debt (% GDP, left scale)
Current account (% GDP, right scale)
DISCLAIMER These assessments are, as always, subject to the disclaimer provided below. This material is published by Euler Hermes SA, a Company of Allianz, for information purposes only and should not be regarded as providing any specific advice. Recipients should make their own independent evaluation of this information and no action should be taken, solely relying on it. This material should not be reproduced or disclosed without our consent. It is not intended for distribution in any jurisdiction in which this would be prohibited. Whilst this information is believed to be reliable, it has not been independently verified by Euler Hermes and Euler Hermes makes no representation or warranty (express or implied) of any kind, as regards the accuracy or completeness of this information, nor does it accept any responsibility or liability for any loss or damage arising in any way from any use made of or reliance placed on, this information. Unless otherwise stated, any views, forecasts, or estimates are solely those of the Euler Hermes Economics Department, as of this date and are subject to change without notice. Euler Hermes SA is authorised and regulated by the Financial Markets Authority of France.
© Copyright 2016 Euler Hermes. All rights reserved.
GDP growth (y/y, 4 qtrs cumulated %)
Sources: IHS Global Insight, Euler Hermes
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-15%
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Venezuela
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Latin America
General Overview
The IMF is broadly supportive of the government’s use of policy tools and its reform agenda to stabilise the economy. Indeed, in March 2016, the Fund approved USD1.5bn in fresh financing, with the funds made available through a stand-by arrangement (SBA) of around USD989.8mn and a stand-by credit facility (SCF) of around USD494.9mn. Financing under both arrangements is for a 24-month period. Kenya has immediate access to around USD757.5mn, with the remaining funds to be disbursed in four tranches following semi-annual programme reviews by the IMF. However, the Kenyan authorities will see the facility as essentially a “precautionary” measure, rather than a fund to be drawn down.
Fiscal consolidation plan will not upset the current high GDP growth trajectory
Also in March 2016, the Treasury announced supplementary spending plans that introduce net cuts to the budget of around -USD404.34mn. However, the government claims that fiscal plans will not interrupt the nation’s “still strong" economic growth, driven by expansion in the construction and agricultural sectors and by a recovery in tourism. EH expects GDP growth of around +6% in both 2016 and 2017, compared with an annual average +5.4% in the ten-year period to end-2015. Kenya will remain one of the faster growing economies in Sub-Saharan Africa (see chart).
The current account registers high deficits but external debt is comfortable
Euler Hermes expects the East African Community (EAC) will grow in importance for Kenya as regional integration deepens, particularly as Mombassa remains the largest regional port and Uganda and Tanzania already account for a combined 23% of Kenyan exports. However, in addition to large fiscal deficits, a further structural imbalance occurs in the external accounts. Large shortfalls in the current account balance (see chart) reflect the economy’s vulnerability to local (climatic and security) and global developments. The latter include commodity demand and internationally-determined commodity prices, which have an impact on both sides of the trade balance as Kenya exports soft commodities but is an importer of crude oil. External debt levels (debt/GDP is around 25% and debt/export earnings 119%) also require careful management, although servicing of external debt obligations is low (debt service/export earnings around 4%) and foreign exchange reserves cover between four and five months of imports.
Key Economic Forecasts
Sources: National Sources, IHS, Euler Hermes
GDP Growth (%)
Sources: National sources, IHS, Euler Hermes
Current Account Balance and External Debt (% of GDP)
Sources: National sources, IHS, Euler Hermes
2014 2015 2016f 2017f
GDP growth (% change) 5.3 5.9 6.0 6.0
Inflation (%, end-year) 6.0 7.0 8.5 7.0
Fiscal balance (% of GDP) -5.3 -6.5 -6.0 -5.5
Public debt (% of GDP) 48.6 50.5 52.0 52.5
Current account (% of GDP) -10.3 -8.9 -7.0 -7.0
External debt (% of GDP) 24.1 24.2 25.0 23.5
0%
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Kenya
Africa
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External debt (% GDP, left scale)
Current account (% GDP, right scale)
How Do We Measure Economic Freedom? See page 467 for an explanation of the methodology
or visit the Index Web site at heritage.org/index.2014 data unless otherwise noted.Data compiled as of September 2015.
Quick FactsPopulation: 42.9 millionGDP (PPP): $132.4 billion5.3% growth in 20145-year compound annual growth 6.0%$3,084 per capitaUnemployment: 9.2%Inflation (CPI): 6.9%FDI Inflow: $989.0 millionPublic Debt: 48.6% of GDP
Economic Freedom Score
0 20 40 60 80 100
Country Comparisons
Freedom Trend
Country
WorldAverage
RegionalAverage
FreeEconomies
2012 2013 2014 20162015
5025 75
0 100Leastfree
Mostfree
54
55
56
57
58
59
57.5
60.7
55.5
83.9
57.5
Kenya’s economy, one of Africa’s most developed, has gradually emerged from political instability and the
economic slowdown. Reforms to improve management of public finance and enhance regulatory efficiency have continued, but progress has been sluggish. After lengthy delays, four measures to improve the business environ-ment (the Companies Act, Insolvency Act, Business Registration Act, and Special Economic Zones Act) were signed into law in 2015.
ECONOMIC FREEDOM SNAPSHOT• 2016 Economic Freedom Score: 57.5 (up 1.9 points)• Economic Freedom Status: Mostly Unfree• Global Ranking: 115th• Regional Ranking: 19th in Sub-Saharan Africa• Notable Successes: Trade Freedom and Regulatory Efficiency• Concerns: Property Rights and Corruption• Overall Score Change Since 2012: No Change
Challenges to sustaining long-term economic develop-ment include the weak rule of law, which remains uneven across Kenya. Corruption is perceived as pervasive, and the judicial system remains vulnerable to politi-cal influence.
World Rank: 115 Regional Rank: 19
KENYA
BACKGROUND: In March 2013, Uhuru Kenyatta won the first presidential election under a constitution promulgated in 2010. In 2014, the International Criminal Court dropped charges against him for crimes against humanity stemming from post-election violence in 2007. Kenya invaded Somalia in 2011 in pursuit of the Islamic fundamentalist group al-Shabaab and the next year formally joined the African Union coalition bat-tling the terrorist organization. Since the invasion, Kenya has suffered a surge of terrorist attacks, and the government has responded by cracking down on the domestic Muslim popula-tion, the media, and non-governmental organizations. Kenya has experienced a moderate economic recovery since the 2007–2008 violence, but poor infrastructure, systemic corruption, high unemployment, and insecurity undermine development. China is funding several ambitious infrastructure projects.
2016 Index of Economic Freedom
Property RightsFreedom from
Corruption
Fiscal FreedomGovernment
Spending
Business FreedomLabor FreedomMonetary Freedom
Trade FreedomInvestment FreedomFinancial Freedom
Business FreedomLabor Freedom
Monetary Freedom
REGULATORY EFFICIENCY
OPENMARKETS
Trade FreedomInvestment Freedom
Financial Freedom
GOVERNMENT SIZE
Fiscal FreedomGovernment Spending
RULE OF LAW
Property RightsFreedom from Corruption
0 20 40 60 80 100
0 20 40 60 80 100
0 20 40 60 80 100
0 20 40 60 80 100
Country World Average Rank Change1–Year
Score
RULE OF LAW GOVERNMENTSIZE
REGULATORY EFFICIENCY OPEN MARKETS
–20.0–25.0
+11.4+17.8
–6.4+2.8
+23.1
+12.0+10.0
0
92nd151st
82nd46th
161st84th
124th
145th83rd72nd
30.025.0
79.480.8
48.662.273.5
65.660.050.0
0–2.0
+1.4+8.7
+0.7–1.6+0.7
+1.6+10.0
0
Long-Term Score Change (since 1995)
THE TEN ECONOMIC FREEDOMS
Corruption remains a major impediment to doing business in Kenya. In March 2015, the presi-dent ordered dozens of government employees, including five ministers and other senior elect-ed officials, to step down temporarily pending an anti-corruption probe. Weak institutional capacity undermines efforts to increase the transparency of procurement and other govern-ment activities. More than 10 percent of the land lacks clear title.
The business start-up process takes 10 procedures, and no minimum capital is required, but the cost of completing licensing requirements equals over twice the average annual income. The public sector employs much of the labor force. The government still regulates prices through subsidies, agricultural marketing boards, and state-owned enterprises. Subsidies from inter-national donors are funding development of geothermal power.
Kenya’s average tariff rate is 9.7 percent. Imports of agricultural products face regulatory bar-riers. The government is involved in many state-owned enterprises. It may not expropriate private property without providing compensation. The financial sector remains vulnerable to government influence. The state owns or holds shares in several domestic financial institutions and continues to influence the allocation of credit.
The top income and corporate tax rates are 30 percent. Other taxes include a value-added tax and a tax on interest. The overall tax burden equals 16.2 percent of GDP. Government spend-ing amounts to 25.3 percent of total domestic output. The fiscal climate remains steady. The deficit has increased to over 5 percent of GDP, and public debt equals about 49 percent of total domestic output.
KENYA (continued)
KENYA 2016
www.africaneconomicoutlook.org
Walter OderO / [email protected] Wilmot reeves / [email protected]
Julius ChOkerah / [email protected]
Ken
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2 African Economic Outlook © AfDB, OECD, UNDP 2016
KENYA
• RealGDPgrowthwas5.3%in2014,whilethe2015estimateandthe2016and2017projectionsshoweconomicexpansionof5.5%,6.0%,and6.4%respectively.
• In2014and2015,theeconomyexperiencedastablemacroeconomicenvironment,withsingle-digitinflationdespitea10.0%currencydepreciationin2015.Atthesametime,callstoamendtheconstitutiontoincreasefinancestothe47countygovernmentsdominatedthepoliticalscene.
• Kenyaissettoexperiencerapidurbanisationintheforeseeablefuture.
Overview
GDP growth remained robust in 2014 at 5.3%. The expansion of construction, manufacturing, finance and insurance, information, communications and technology, and wholesale and retail trade buoyed GDP. The economy slowed in the first half of 2015, but growth is estimated to have reached 5.5% by year-end. As shown in Table 1, overall GDP growth prospects are 6.0% and 6.4% for the years 2016 and 2017 respectively. Consumer Price Index (CPI) inflation projections remain at around 6.0% over the same period. The short- to medium-term positive growth projections are based on the assumptions of increased rainfall and enhanced agricultural production, a stable macroeconomic environment, continued low international oil prices, the stability of the Kenya shilling (KES), improved security boosting tourism and reforms in governance and justice.
Political activity in 2015 continued to centre on two areas: a call by the opposition party, Coalition for Reforms and Democracy (CORD), to amend the constitution and county governments seeking to raise national government financial transfers from 15% to 45%.
Figure 1. RealGDPgrowth
0
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10
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015(e) 2016(p) 2017(p)
Real GDP growth (%) East Africa (%) Africa (%)%
Source: AfDB, Statistics Department AEO. Estimates (e); projections (p).
Ken
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Ken
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3African Economic Outlook © AfDB, OECD, UNDP 20162
Table 1. Macroeconomicdevelopment2014 2015(e) 2016(p) 2017(p)
Real GDP growth 5.3 5.5 6.0 6.4
Real GDP per capita growth 2.6 2.9 3.4 3.8
CPI inflation 6.9 6.0 6.0 5.2
Budget balance % GDP -5.7 -8.8 -8.2 -6.3
Current account % GDP -10.0 -7.9 -6.3 -6.9Source: Data from domestic authorities; estimates (e) and projections (p) based on authors' calculations.
Recent developments and prospects
Real GDP growth remained robust, rising to 5.7% in 2013 based on rebased statistics, before dropping slightly to 5.3% in 2014. The main drivers of growth were the expansions in construction, manufacturing, finance and insurance, information, communications and technology, and wholesale and retail trade. The economy slowed in 2014, partly due to a sharp drop in tourism following terrorist attacks in the country. However, the rebasing of GDP in 2014 led to the reclassification of Kenya to lower middle-income status, with a GDP of USD 52.8 billion and per capita income of USD 1 190.
Kenya’s growth outlook, however, remained positive for 2015, with overall GDP growth expected to be 5.5%, 6.0% and 6.4% in 2015, 2016 and 2017 respectively. CPI inflation is expected to remain at around 6% during the same period. The short- to medium-term positive growth projections are based on the assumptions of increased rainfall for enhanced agricultural production, a stable macroeconomic environment, continued low international oil prices, the stability of the KES improved security boosting tourism and reforms in the areas of governance and justice. In 2015, however, the security situation continued to deteriorate, while reforms in the areas of governance and justice have suffered from perceptions of an increase in cases of corruption and a weakened justice system.
Kenya has made efforts to diversify the economy to reduce reliance on traditional agriculture and manufacturing as the main sources of growth. In 2014, for example, the major drivers of the economy were agriculture, forestry and fishing, construction, wholesale and retail trade, education, and finance and insurance. The hotels and restaurants industry contracted for the second year in a row, while all the other sectors recorded positive growth. Efforts are being made to expand earnings from information and communications technology (ICT) by encouraging the construction of ICT industrial parks to tap into the global back-office operations market.
The Central Bank of Kenya (CBK) pursued a prudent monetary policy stance, which helped contain inflation at around 5.0% to date. CBK eased its monetary policy stance starting in July 2012, reducing the central bank rate (CBR) from 18.0% in June 2012 to 8.5% in January 2014. However, the continued widening of the current account deficit and the rapid depreciation of the KES, coupled with calls to raise interest rates, led to a reversal of some of the cautionary policies. The CBR rose to 11.5% in September 2015 to contain rising fragility in the money market. The KES remained largely stable in 2014, depreciating by about 4.9% against the US dollar (USD). However, in the first six months of 2015, it depreciated by 7.1%, compared to 1.6% in the same period in 2014. Recent studies suggest that Kenya’s Real Effective Exchange Rate (REER) remained overvalued by between 4.0% (CBK) and 20.0% (Renaissance Capital). The depreciation affected government liquidity, leading to a drawdown on the IMF Emergency Support facility.
The public debt-to-GDP ratio remained below 50.0% during the five years to December 2012 but rose to 53.2% in October 2013. It presently stands at 52.0%, mainly driven by increased debt-to-finance expenditure related to the devolved government structure and infrastructure investments. The September 2015 updated debt sustainability analysis indicates Kenya’s risk
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4 African Economic Outlook © AfDB, OECD, UNDP 2016
of external debt distress remains low, while overall public sector debt dynamics continue to be sustainable. However, the net present value (NPV) of Public and Publicly Guaranteed (PPG) external debt is projected to peak at 22.0% of GDP in 2016-17, well below the 50.0% indicative threshold. The NPV of the debt-to-exports ratio is forecast to plateau at around 123.0% in the medium term, remaining well under an indicative threshold of 200%.
Kenya’s current account deficit has continued to widen due to a rise in imports against sluggish exports and reduced earnings from tourism, which has been hit by concerns over terrorism in the region. While import demand was boosted by manufacturers and contractors implementing large infrastructure projects, subdued tourism and declining earnings from exports led to a deterioration of the current account in the first half of 2015 compared to the same period in 2014.
Overall exports were about 10.0% less in the first half of 2015 as compared to the same period in 2014. Imports rose by 0.2%, leading to the overall nominal trade deficit worsening by 5.3% over the same period. Kenya’s foreign direct investment (FDI) remains behind its neighbours, although investment levels increased from USD 605 million in 2009 to an estimated USD 994 million in the fiscal year (FY) 2012/13. FDI was projected to increase to USD 1.2 billion in FY 2013/14, mainly due to investment from Brazil, Russia, India, China and South Africa (BRICS), especially India and China in emerging extractive industries. FDI is expected to continue to grow thanks to the investment opportunities being rolled out by the national government and the 47 county governments. Investors are expected to take advantage of the attractive offers, including free land.
In 2014, agriculture contributed about 30.3% to GDP, followed by finance, real estate and business services at 15.7% (Table 2). Manufacturing continued to stagnate, contributing 11.1% to GDP, down from 12.6% in 2010. Renewed investment in energy and the revamping of agricultural production are expected to increase opportunities for agro-processing, thereby boosting the potential for the growth of the manufacturing sector.
Table 2. GDPbysector(percentageofGDPatcurrentprices)2010 2014
Agriculture, forestry, fishing and hunting 27.8 30.3
of which fishing 0.7 0.8
Mining and quarrying 0.9 0.9
of which oil … …
Manufacturing 12.6 11.1
Electricity, gas and water 2.2 2.0
Construction 5.0 5.4
Wholesale and retail trade; Repair of vehicles household goods; Restaurants and hotels
10.4 10.1
of which hotels and restaurants 1.8 1.0
Transport, storage and communication 10.1 10.6
Finance, real estate and business services 15.9 15.7
Public administration and defence 4.9 5.0
Other services 10.1 9.1
Gross domestic product at basic prices / factor cost 100.0 100.0Source: Data from domestic authorities.
Macroeconomic policy
Fiscalpolicy
The fiscal balance has remained under pressure from increased expenditure at both the national and county government levels. Although the medium target is 6.8% of GDP, the fiscal balance has increased, with the deficit standing at 8.8% in 2014/15 (Table 3). Targets for 2015/16
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and 2016/17 are projected to be 8.2% and 6.3% respectively against current account deficit projections of 6.3% and 6.9% over the same period. Public sector employees, who continue to demand increased pay, add to the pressure at the national level. For example, 280 000 public sector teachers went on strike in September 2015, demanding a 50% to 60% pay rise, which had been awarded by the courts but not implemented by the government. The Salaries and Remuneration Commission is therefore undertaking a staffing assessment aimed at setting appropriate salaries for state and public sector employees. However, despite this the government still makes an effort to ensure that fiscal policy responses to shocks are reasonably rapid. For example, the expected El Niño rains in the fourth quarter of 2015 resulted in budgetary adjustments in order to provide adequate resources to respond to the potential effects of the adverse weather. The quality of public goods provision, including investments in energy and roads, has been highlighted as one of the key drivers of growth over the last three years. Despite high fiscal deficits, inflation has largely remained low as it mainly depends on demand. This is especially the case for food and oil prices, which have remained favourable over the last two years. Notwithstanding recent discoveries, Kenya is not yet producing oil and has mainly benefited from the falling oil prices, which have kept inflation in check.
Table 3. Publicfinances(percentageofGDPatcurrentprices)2006/2007 2011/2012 2012/2013 2013/2014 2014/2015(e) 2015/2016(p) 2016/2017(p)
Total revenue and grants 19.3 19.2 18.9 20.0 22.5 22.0 20.7
Tax revenue 17.3 17.4 17.0 18.7 20.9 19.2 17.8
Grants 0.8 1.0 0.9 0.5 0.4 1.8 2.0
Total expenditure and net lending (a) 20.1 25.1 25.7 25.7 31.3 30.1 27.0
Current expenditure 16.1 16.7 19.0 19.4 23.5 23.7 21.2
Excluding interest 14.0 14.6 16.3 16.7 21.2 18.5 16.0
Wages and salaries 6.3 5.6 6.5 5.6 6.9 8.5 7.8
Interest 2.1 2.1 2.7 2.6 2.3 5.2 5.2
Capital expenditure 4.0 8.3 6.6 6.3 7.7 6.4 5.7
Primary balance 1.3 -3.7 -4.1 -3.1 -6.5 -3.0 -1.0
Overall balance -0.8 -5.9 -6.8 -5.7 -8.8 -8.2 -6.3Note: a. Only major items are reported.Source: Data from domestic authorities; estimates (e) and projections (p) based on authors’ calculations.
Total revenue as a percentage of GDP is therefore expected to average 21% in the next two years. Conversely, total expenditure and net lending will remain above 30%, and the average overall budget deficit will remain above 7% of GDP.
Monetarypolicy
Despite prudent monetary policy stances of the Central Bank of Kenya (CBK), there have been slippages following rapid currency depreciation in 2015. Strong food production and declining petroleum prices have been more successful at keeping inflation down than deliberate monetary policy interventions. However, CBK continues to use its CBR to contain inflation. It was reduced from 18.0% in June 2012 to 8.5% in May 2013. It was then raised in September 2015 to 11.5% to contain rising fragility in the money market. These efforts have mitigated and provided responses to internal and external shocks, which have led to the relative stability of domestic prices of goods and services.
The exchange rate remained stable until 2014 but became very volatile in 2015, with massive depreciation resulting in the loss of almost 10% of the value of the KES in 2015. The depreciation has been largely attributed to the global appreciation of the US dollar, which left most currencies on a downward spiral, thereby affecting all the East African Community (EAC) common market
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regional currencies. This exacerbated the challenges facing the EAC Monetary Union, which is delayed by convergence challenges.
As noted by the IMF in its latest review of September 2015: “Kenya’s economic performance has remained satisfactory despite headwinds from rising volatility in global markets and domestic security challenges. Real GDP growth has been robust, and, notwithstanding the recent depreciation of the KES, inflation has remained within the authorities’ target range. External buffers to date have remained adequate.”
Credit to the private sector has declined relative to public sector borrowing. Domestic credit from the banking sector increased by 29.2% in the year to June 2015, compared with 14.6% in the same period in 2014. This growth in domestic credit was largely reflected in a drawdown of government deposits at CBK following the utilisation of proceeds from the USD 2 billion Eurobond (issued in June 2014) and its tap sale in December 2014 of USD 815 million. Credit to government consequently grew by 84.4% in the year to June 2015. Over the same period, growth in credit to the private sector decreased to 20.5% from 25.8% the previous year.
Economicco-operation,regionalintegrationandtrade
The Protocol on the Establishment of the EAC Common Market provides for the free movement of goods, labour, services and capital. Since the adoption of the protocol, the EAC continues to embrace the free movement of labour, and some of the member countries have signed to a single entry visa for non-EAC member countries. The EAC Customs Union protocol also provides service suppliers, providers and consumers from across the region with guarantees of equivalent treatment to local providers. Partner states are expected to progressively open up some sub-sectors within the following seven broad sectors over the period of 2010-15: i) business and professional services; ii) communication services; iii) distribution services; iv) educational services; v) financial services; vi) tourism and travel related services; and vii) transport services. Partner states are to make commitments on the remaining five sectors (health and social services, construction and related services, energy services, environment services, and movement of natural persons), plus additional commitments on the above indicated seven service sectors in line with Article 23 (2) of the protocol.
Kenya has been at the forefront of the removal of economic barriers and has taken the initiative to expand financial services across the regional member countries. Several Kenyan financial institutions have proceeded to establish branches in the other EAC member countries. These include Kenya Commercial Bank, Equity Bank and Fina bank, among others. This is in addition to the mobile telephony financial services, which extend across the region, including the M-Pesa services. Kenya also continues its central role in promoting peace and security and is participating in ongoing efforts to restore stability in Somalia and South Sudan. Other notable achievements include institutionalisation of mechanisms for early warning about conflicts, refugee management, control of the proliferation of small arms, electoral monitoring within member states and information exchange for monitoring external threats to the region.
As shown in Table 4, the trade balance is projected to remain above 10.0% owing to increased imports of equipment and infrastructure-related materials. The current account balance is expected to stand at a 6.3% to 6.9% deficit in 2016 and 2017. The government will need to put measures in place aimed at increasing export earnings in order to improve the external position in the medium term.
Kenya continues to be the driver of economic co-operation within eastern Africa, propelling trade facilitation through enhancements at the port of Mombasa. Kenya continues investing in the improvement of the northern corridor road network and in 2014 launched the construction of the Single Gauge Rail linking Mombasa to Kampala, with a USD 5 billion loan from China. Kenya also launched the LAPPSET road network, which links the port of Lamu to South Sudan
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and Ethiopia, with the construction of berths at Lamu already in progress. Kenya’s exports to the COMESA region currently stands above 35.0%. These are largely destined for Zambia (13.0%), Uganda (10.2%), Rwanda (2.2%), Egypt (5.1%) and Tanzania, a non-COMESA but Tripartite Member (6.3%).
Table 4. Currentaccount(percentageofGDPatcurrentprices)2007 2012 2013 2014 2015(e) 2016(p) 2017(p)
Trade balance -13.3 -18.5 -12.8 -9.6 -16.2 -14.4 -16.3
Exports of goods (f.o.b.) 12.9 12.2 13.2 12.8 9.8 9.0 9.1
Imports of goods (f.o.b.) 26.2 30.7 26.0 22.5 26.1 23.5 25.4
Services 4.0 4.8 -1.0 -5.7 3.1 3.0 3.6
Factor income -0.5 -0.3 -0.6 -0.9 -1.3 -1.3 -1.3
Current transfers 6.6 5.6 5.7 6.2 6.6 6.5 7.2
Current account balance -3.2 -8.4 -8.7 -10.0 -7.9 -6.3 -6.9Source: Data from domestic authorities; estimates (e) and projections (p) based on authors' calculations.
Debtpolicy
The 2015 debt sustainability analysis confirmed Kenya’s debt is sustainable in the medium term. The updated debt sustainability analysis finds that even assuming full drawings under the IMF precautionary programme Kenya remains at low risk of external debt distress, notwithstanding a modest deterioration in the medium-term public debt trajectory. Kenya’s capacity to repay could be enhanced once the recent sizeable oil and gas discoveries come on stream. This is consistent with the findings of the Bank Group Credit worthiness assessment, conducted in the first quarter of 2015, which also confirmed that Kenya remains creditworthy.
Kenya’s public and publicly guaranteed debt stood at 52.8% of GDP in June 2015, up from 44.2% of GDP in June 2014. As a result of the debut sovereign loan issuances and first disbursements of the railway-related loan package, the NPV of public and publicly guaranteed (PPG) external debt is estimated at 20.0% of GDP at year-end 2014. With additional project financing and moderate additional commercial financing, the NPV of PPG external debt is projected to peak at 22.0% of GDP in 2016–17 (well below the 50% indicative threshold). The NPV of the debt-to-exports ratio is forecasted to plateau at around 123.0% in the medium term, remaining well under an indicative threshold of 200.0%. Over 90.0% of external debt is owed to multilateral and bilateral creditors, mostly IDA, ADB, Japan and China.
In its medium-term debt policy framework, Kenya confirms that the fiscal anchor remains maintaining gross public debt below 45% of GDP in present value terms, and is committed to gradually bringing the fiscal deficit over the medium term towards the EAMU’s convergence criteria of 3% of GDP. This requires containing current spending and mobilising additional revenues. Parliament has also set the borrowing limit for Kenya at KES 2.2 trillion (USD 21 billion), thereby providing the legal upper limit for borrowing. The authorities have adopted a pre-emptive approach to process debt repayments by relying on their reporting systems rather than on invoices from lenders. They are also starting the payment process at 30 days before the due date to allow for internal approvals while the Debt Management Office (DMO) delivers to the Cabinet Secretary of the National Treasury a quarterly report with all obligations coming due in order to ensure accountability. The internal processes between the different units will be fully automated, and there will be a significant strengthening of staffing at the DMO, with the appointment of a full-time director general and significant strengthening of risk and compliance functions.
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Figure 2. Stockoftotalexternaldebt(percentageofGDP)anddebtservice(percentageofexportsofgoodsandservices)
0
5
10
15
20
25
30
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
Outstanding debt (public and private) /GDP Debt service/Exports%
Source : IMF (WEO & Article IV).
Economic and political governance
Privatesector
In an effort to transform Kenya’s business climate, the government in 2015 enacted the Companies Act, the Insolvency Act and the Special Economic Zones Act, the Business Registration Service, the Companies and Insolvency Legislation (Consequential Amendments) Act 2015 and the Finance Act Amendments 2015. The new laws have made starting business in the country much easier. The Special Economic Zones Act, the first of its kind in Africa, is aimed at creating the enabling environment for global and local investors in specially designated zones.
In the World Economic Forum’s Global Competitiveness Report (GCP) 2015/16 report, Kenya faired relatively well. The country ranked 23 for its intensity of local competition, 53 for its extent of market dominance, 60 for its effectiveness of anti-monopoly policy, 71 for its effect of taxation on incentives to invest and 70 for total tax rate as a percentage of profits. Other rankings were 116 for the number of procedures to start a business (10), 112 for the time required to start a busy (30 days), 59 for agricultural policy costs, 95 for prevalence of non-tariff barriers, 105 for trade tariffs, 92 for the burden of customs procedures and 58 for the degree of customer orientation. All of these scores were fairly good improvements on previous positions.
The World Bank’s 2016 ease of doing business index indicated that Kenya had moved up 21 rankings to 108. This made Kenya the third most improved out of 189 countries in registering and conducting business. Drivers of this include an improvement in credit indicators as a result of the introduction of Credit Reference Bureaus, which allow financial institutions to assess the credit-worthiness of firms and individuals. The country also reduced electricity connection procedures from 158 to 110 days, and reforms in stamp duty from 30 to 26. Overall, the report ranked Kenya’s ease of doing business at 108 in Doing Business (DB) 2016, up from 136 in DB 2015 out of the 189 economies surveyed globally. While the ranking marked a marginal improvement from position 137 the previous year, it showed Kenya retained scores on most of the parameters but slipped in some.
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Financialsector
Despite a difficult 2015, Kenya has maintained relative financial stability over the last five years, with only two (Dubai Bank and Imperial Bank) out of 44 commercial banks being put under receivership due to lack of prudential management.
The average lending rate increased slightly to 15.48% in June 2015 from 15.26% in May 2015, while the average deposit rate increased to 6.64% from 6.55% over the same period. Consequently, the interest rate spread increased marginally to 8.9% in June 2015 from 8.7% in May 2015. While gross non-performing loans (NPLs) rose 22.0% between June 2014 and June 2015, the ratio of gross NPLs to gross loans declined marginally to 4.6% at the end of June 2015, compared with 4.7% in June 2014. The quality of assets, measured as a proportion of net NPLs to gross loans, decreased marginally from 2.8% in June 2014 to 2.7% in June 2015. Both commercial banks and non-banking financial institutions also had strong liquidity positions in June 2015. At 38.9% and 24.0% respectively, they both exceeded the 20% minimum requirement.
On-site supervision efforts have intensified, and the CBK has asked banks to reclassify some of their loans and increase provisioning for credit losses. These continuing efforts have already led to a higher loan loss provisioning coverage ratio for several banks. While the banking sector remains sound, recent credit and market risk events have underscored the importance of ensuring sound lending standards, compliance with prudential guidelines, adequate provisioning and sufficient buffers against losses.
Kenya continues to do well in electronic payments, with its M-Pesa mobile phone-based payment system. In addition, the M-KESHO banking and M-SHWARI lending services provide opportunities for the poor to save and borrow as little as USD 1.2 at any point in time. M-Pesa is used by more than two-thirds of Kenyan adults, supported by more than 85 000 agents and 50 000 merchants. It processes over eight million transactions every day, totalling close to USD 20 million, and has enabled financial institutions to offer new financial products via mobile networks.
Publicsectormanagement,institutionsandreform
The Global Competitiveness Index (GCI) of the World Economic Forum’s Global Competitiveness Report 2015-2016 ranks Kenya 70 for property rights and 81 for intellectual property protection out of 140 countries. A national titling centre was launched in 2014 to aid in bulk titling and generating new titles, while assessment and payment of stamp duty services were also rolled out. Through the proposed Land Bill 2015, the government is in the process of reviewing legislation on the ease of property registration, aligning land use policy to the constitution and digitising land and property registries.
Following the rigorous restructuring of the judiciary as provided for in the 2010 constitution, the application of commercial laws has remained largely predictable. The appeals process is comprehensive, including the initial process at the magistrates’ courts, high courts, appellate courts and supreme court. The GCI ranks Kenya at 61 out of 140 countries in terms of judicial independence.
The 2010 constitution and public sector and county government legislation provide for the orderly organisation of government and mechanisms for coordination between the legislature, executive and judicial branches. However, in 2014 and 2015 there was a conflict of operations between the three branches of government, with various cases ending up in litigation. The GCI ranks Kenya 89 in favouritism in decisions of government officials, 62 in wastefulness of government spending, 44 in the burden of government regulation and 52 in the efficiency of the legal framework in settling disputes.
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The government is aware that the number of reported crimes is growing. Criminal gangs continued to operate in 2015, with serious attacks leading to several deaths reported in Kilifi, Nairobi, Garissa, Mandera and Wajir counties. However, in 2015 the government was able to provide security to high-level visitors, including the President of the United States (September 2015) and the Pope (November 2015). Kenya also hosted the WTO (December 2015), indicating renewed confidence in the government’s ability to handle security matters.
Naturalresourcemanagementandenvironment
Roughly 42% of Kenya’s GDP and 70% of overall employment are dependent on sectors related to natural resources, including agriculture, mining, forestry, fishing, tourism, water supply and energy. There is greater awareness that climate change can lead to adverse impacts across all these sectors, with the agricultural sector standing apart as particularly vulnerable. In 2010, the Kenyan government released the National Climate Change Response Strategy, followed by the 2013–17 National Climate Change Action Plan (NCCAP). The objective of the action plan was to identify low carbon climate-resilient development pathways that incorporate sustainable development, adaptation and mitigation and align them with existing national planning documents.
Although Kenya has little historical or current responsibility for global climate change, and greenhouse gas (GHG) emissions are low relative to global emissions, the NCCAP recognises that national emissions are set to increase as Kenya realises its development aspirations. Specifically, the NCCAP estimates that GHG emissions are expected to increase from 59 million tonnes of carbon dioxide equivalent (MtCO2e) in 2010 to 102 MtCO2e in 2030, consistent with the growing population and expanding economy. This necessitates Kenya’s transition to a low carbon development pathway. The National Environment Management Authority (NEMA) has since 2014 continued to enforce legislation regarding pollution, while various county governments have put in place legislation to deal with various aspects of pollution.
Politicalcontext
In 2015, the political scene continued to be dominated by a push for a referendum by the opposition party, the CORD, and the Council of Governors, which was matched by the government’s launch of a counter-referendum initiative. CORD and the Council of Governors were demanding for at least 45% of national revenue to be devolved to the counties as opposed to the constitutional provision of 15%.
Kenya experienced a number of security incidents, including terrorist attacks in northern and coastal regions of the country in 2015. A terrorist attack at Garissa University in April 2015 left about 150 students dead, leading to the university being shut down. To respond adequately to these challenges the government submitted a security law (amendment) bill to parliament to give the executive branch more power. Despite protests and concerns that Kenya would become a police state, the bill was passed into law in December 2014. However, early in 2015, the Constitutional Court declared a number of clauses in the new law unconstitutional.
The 2015 the World Bank’s Worldwide Governance Indicators (WGI) project shows that in most dimensions of political governance (political stability and absence of violence, control of corruption and voice and accountability) Kenya’s scores were in the 8-45 percentile range on a scale of 0-100 out of the 215 countries surveyed. Among East African countries, Kenya ranked best in voice and accountability (42.4), third in control of corruption (10.1, Rwanda being the best at 70.3) and last in political stability and nonviolence (8.7, Rwanda being the best with 42.7). According to the 2014 Ibrahim Index of African Governance (IIAG), Kenya scored 57.4 out of 100.0 (down from 54.8 in 2010), continuing to remain above the African average (51.5) and ranking 17 out of 52 overall. The scores continued to be higher than the regional average for East Africa, which was 48.5.
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Social context and human development
Buildinghumanresources
Despite the significant progress made in education, issues related to educational quality persist, especially at the primary level, with illiteracy rates increasing among students with six years of primary schooling. Over a quarter of young people have less than a lower secondary education, and one in ten youths did not complete primary school. At the university level, the Kenya Economic Survey reported in 2015 the student population grew by 22.8 % between 2013 and 2014. The World Education News and Reviews of the non-profit World Education Services (WES) stated similar growth is expected to continue, yet funding was cut back by 6.0% in the 2015 national budget. The mismatch between funding and enrolment growth will mean a heavier tuition burden for students, increasing the significant access issues that already exist for the marginalised and adding to quality issues related to overcrowding, overburdened infrastructure and faculty shortages.
Findings of the 2014 Kenya Demographic and Health Survey have shown improvements in various indicators for Millennium Development Goals (MDGs), particularly child mortality and maternal health. For example, neonatal mortality declined from 31 deaths in 2008/09 to 22 deaths per 1 000 live births in 2014. Infant mortality declined from 52 deaths in 2008/09 to 39 deaths per 1 000 live births in 2014, and under-five mortality declined from 74 deaths in 2008/09 to 52 deaths per 1 000 live births in 2014. There was a marginal decline in maternal mortality from 488 deaths per 100 000 live births to 400, though this is still one of the highest rates in Africa. Improvements in child survival are associated with the marginal improvements in maternal health, including increases in the proportion of births assisted by a skilled provider, delivery in health facilities and more prevalent post-natal care.
Kenya’s national HIV prevalence rate now stands at 6.0%, with male prevalence at 5.6% and female 7.6%. According to the June 2014 Kenya HIV Estimates and Kenya HIV Prevention Revolution Road Map reports, there are approximately 1.6 million people living with HIV, of whom 191 840 are children. New HIV infections in 2013 were recorded at 101 560. Of this number, children account for 12 940, women 50 530 and men 38 090. Nine of Kenya’s 47 counties account for 65% of the new infections. They are: Homa Bay, 15 003; Kisumu, 12 645; Siaya, 12 059; Migori, 8 292; Kisii, 5 976; Nakuru, 4 326; Turkana, 3 141; Nyamira, 2 507; and Bomet, 1 965. Overall, HIV and AIDS related deaths are reported to have declined significantly over the years, mainly due to the increase in the number of people with access to lifesaving treatment.
Povertyreduction,socialprotectionandlabour
Recent and reliable data on the poverty headcount is virtually non-existent, which makes policy formulation and implementation challenging. The last survey measuring poverty was conducted in 2005/06. This is likely to change in 2016, with the new integrated household budget survey now underway. Nevertheless, the last MDGs report published in late 2014 placed the poverty level at 45.2%, while estimates from the World Bank put it at 34.8 %. The World Bank attributes the decline in poverty levels to improvements in economic growth, social safety nets and migration to urban areas.
Social protection programmes are an integral part of the Kenya’s Vision 2030 and Medium Term Plan (MTP) II, mainly targeting the youth, women and vulnerable groups like the elderly, orphans and vulnerable children (OVC). Allocated funds for social protection programmes for the elderly rose by 59.4% from KES 3.2 billion in FY 2013/14 to KES 5.1 billion in FY 2014/15. Disbursement of cash to the elderly also increased substantially by 69.0%, from KES 2.9 billion to KES 4.9 billion over the same periods. The funds allocated to OVC increased by 25.0%, from KES 4.8 billion in FY 2013/14 to KES 6.0 billion in FY 2014/15. Cash disbursement to OVC increased by 28.9%, from KES 4.5 billion to KES 5.8 billion over the same period.
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The national budget continues to ringfence various poverty-focused interventions, including the Constituency Development Fund, which allocates 2.5% of national revenue across the 290 constituencies based on their poverty profiles. There are also funds targeting women (Women Enterprise Fund) and youngsters (Youth Enterprise Fund). The 2010 constitution guarantees a transfer of at least 15.0% of national revenue to the 47 county governments, and there is an Equalization Fund of 0.5%. In 2014, the government introduced the Uwezo Fund, targeting women and youth across the country. It aims to enhance economic growth by eradicating extreme poverty and hunger and promoting gender equality and empowering women (MDGs 1 and 3). The Uwezo Fund is a flagship programme for Vision 2030, seeking to reach these goals by providing women, young people and the disabled with access to financing to promote businesses and enterprises at the constituency level. It also provides mentorship opportunities to enable the beneficiaries to take advantage of the 30.0% government procurement preference through its capacity-building programme. The Uwezo Fund is therefore an avenue for incubating businesses, catalysing innovation, promoting industry, creating employment and, as a result, growing the economy.
Genderequality
Article 27 (8) of the 2010 constitution of the Republic of Kenya requires progressive realisation of the enforcement of the two-thirds gender rule or requires this to be implemented during general elections. In addition, Article 27 (6) provides for strong affirmative action, aimed at ensuring full realisation of gender equality. However, implementation of these constitutional provisions has been hampered by historical and cultural factors across and within the regions and counties of Kenya. Progress, however, towards gender equality is being made. This can be attributed to the 2010 constitution of Kenya, affirmation action and various policy measures supporting institutionalising gender equality at all levels in both the public and private sectors. For instance, in August 2015 the president of Kenya unveiled the national multimedia campaign dubbed Tubadili, Tusitawi Pamoja, a Swahili motto for rallying men and women to work together to promote sustainable development through the realisation of the two-thirds gender principle in political representation. The campaign was part of a broad strategy to lobby for the passage of the 2015 amendment bill No. 4, which ensures that at any one time parliament is constituted as per the two-thirds gender principle. The campaign also seeks to promote change in behaviour and attitudes among voters so they can appreciate the economic value of electing women to key leadership positions.
Thematic analysis: Sustainable cities and structural transformation
Kenya must contend with the challenges of rapid urbanisation that has taken place in recent years. Kenya’s population currently exceeds 43 million, with a considerable percentage now living in urban areas, led by Nairobi, Mombasa, Kisumu, Nakuru, Nyeri and Eldoret. By way of example, just a decade ago, Nairobi had a population of about 2 million. As of 2015, the capital was home to 3.5 million people, an increase of roughly 75%. Sixty percent of its residents live in slums where the provision of public services is inadequate. The rapid growth of the urban population is, therefore, not commensurate with the capacity of cities and towns to create jobs, not only for Kenyans overall but also for the rapidly growing youth population.
A study by OXFAM (2009) concluded Kenya is facing a new urban challenge, with millions of Nairobi residents undergoing a daily struggle for food and water. The organisation observed that a combination of falling household income, rising prices, and poor governance was making life difficult for the poor in Kenya’s capital. It was further observed that rapid urbanisation was changing the face of poverty in Kenya. Nairobi’s population is set to nearly double to almost six million by 2025, and, as mentioned, 60% of residents live in slums with no or limited access to even the most basic services such as clean water, sanitation, housing, education and healthcare.
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Whereas the starkest poverty had previously been found in remote rural areas, within the next ten years half of all poor Kenyans are expected to live in towns and cities.
In tandem with the rapid rise in the urban population, coupled with rural-urban migration, there has been a spike in youth unemployment and slum populations against the backdrop of rising poverty rates. The Kenyan government has been responding to these challenges through programmes such as slum upgrading, intended to provide shelter to poor slum dwellers. These have been introduced in the shantytowns of Kibera, Mathare, Nairobi, Mombasa and Kisumu. If Kenya’s rapid urbanisation is left unmitigated, the country could see even higher rates of unemployment.
According to Vision 2030 launched in 2008, Kenya has set its targets on becoming a middle-income economy by 2030. However, this requires an effective approach to control rapid urbanisation. The efforts should include legislative review to put in place laws and policies that are required to govern and manage urban areas as provided for under the 2010 constitution. Further work should involve spatial and physical planning, the provision of adequate facilities in cities and towns, efforts to attract people to rural areas through investment in agriculture, environment management plans and implementing policies for managing risks and disaster, particularly in urban areas.
The country has plans to build a number of resort cities along the Lamu Port Southern Sudan-Ethiopia Transport (LAPPSET) corridor. The port of Lamu will serve them, providing many jobs. Other resort cities are to be constructed around Nairobi, e.g. the Konza city. The government has recognised the importance of paying attention to and harnessing the positive aspects of urbanisation. With this in mind, the president created a new ministry to handle urban development under the new ministerial structure. The government also recognises that without managing urbanisation and creating economic opportunities for young people, it will be hard to curb insecurity and high levels of crime in urban areas. Investing in jobs for young Kenyans and supporting urban and rural employment initiatives could provide reasonable ways to mitigate a growing force weighing down on Kenya.
Reference
OXFAM (2009), “Kenya threatened by new urban disaster”, OXFAM, Oxford,
www.oxfam.org/en/pressroom/pressreleases/2009-09-10/kenya-threatened-new-urban-disaster.
HOME ECONOMIC STUDIES KENYA
STRENGTHS
Leading East African economyPivotal role within the East African Community,the leading African common marketDiversified agriculturePerformance of telecommunication and financialservicesDynamic demographics and emerging middleclass
WEAKNESSES
Agriculture production highly dependent onclimate conditionsLack of sufficient infrastructureSignificant terrorist riskImproving governance, but persistent corruption
SYNTHESIS
MAJOR MACRO ECONOMIC INDICATORS
2013 2014 2015 (f) 2016 (f)
GDP growth (%) 5.7 5.3 6.5 6.8
Inflation (yearly average) (%) 5.7 6.9 6.3 5.9
Budget balance (% GDP) 5.7 7.2 8.1 7.3
Current account balance (% GDP) 8.9 10.4 9.6 9.2
Public debt (% GDP) 44.2 52.6 56.2 55.9
(f) Forecast
RISK ASSESSMENT
Growth still dynamic, buoyed by private consumption and public investment
Growth remained buoyant in 2015 despite a lack of rain and another fall in the number of tourists. Activity was driven byprivate consumption, which benefited from lower oil prices, job creation and public investment in infrastructure (including theconstruction of a railway line and new geothermal electricity plants). Meanwhile, on the supply side, the services sector,driven by telecommunications and financial services, was still one of the most dynamic of the continent. In 2016, growth isexpected to continue to benefit from the rise in development spending, but will be less dynamic than initially expected.Heightened volatility on the world markets and terrorist attacks have led the authorities to revise the macroeconomicprospects of their programme downwards (this benefitted from IMF support under two credit arrangements approved inFebruary 2015 as a precautionary measure). Downside risks continue to put pressure on this new growth scenario. A sharperdeterioration in financial conditions (linked to the normalisation of monetary policy in the United States) or economicconditions in Europe (major market for tourism) would affect activity. The same would be true if FDIs in oil exploration were to
POPULATION
42.9 MILLION
GDP PER CAPITA
1,420 US$ COUNTRY RISKASSESSMENT
BUSINESSCLIMATE
B CKENYA
slow due to the oil market slump. In the medium term, the authorities expect the planned expansion in transport and irrigation network infrastructure, as well asthe establishment of alternative energy sources, to lead to a significant expansion in trade and less vulnerability to weatherconditions, as the country depends heavily on hydroelectric energy and rainfed agriculture. In 2015, Kenya made progressregarding the business climate, simplifying procedures to start up a new business and to register property, and to improveaccess to credit and electricity. Inflation remains within the authorities' target range. Higher food prices at the start of the year, and the depreciation of theshilling prompted the central bank to raise interest rates twice in 2015. The country is running significant twin deficits linked to its great need for infrastructure
The trade deficit remains large due to the substantial growth in imports of capital goods associated with infrastructuremodernisation and oil exploration. Moreover, although diminishing, the energy bill remains high. Only a strong expansion inthe geothermal sector and the start of oilfield operations will enable it to be reduced in a few years. Exports are expected tocontinue to rise in 2016 thanks to robust prices for tea, of which the country is the third largest producer and the leadingexporter in the world, and the recovery in sales of horticulture products (2nd leading export item). As for invisibles, tourismincome is down but remittances by expatriate workers continue to grow. Thanks to the rise in FDIs, foreign exchange reservesgrew until 2014, since when capital flows have, nonetheless, been on a slowing trend, in a context of greater volatility onworld markets. However, reserve levels remain satisfactory. The budget deficit is also high due to the investment in infrastructure. Expenditure (construction of the railway line, security,transfers to the counties and support for the national airline) rose substantially in the 2014/15 fiscal year. Higher excise dutyand improved tax administration should help contain the deficit in the 2015/16 fiscal year. Public debt rose markedly in 2014,pushed up by the issuance of sovereign bonds and the drawing down of a credit line awarded by China, although itssustainability is not in question. The security risk remains high
The adoption of a new constitution in 2010 and the peaceful conduct of the 2013 general election have improved the outlookfor political stability. President Kenyatta should be able to serve a full term. He could even stand again in August 2017,especially as the International Criminal Court has dropped its charges against him in connection with the interethnic violencefollowing the December 2007 presidential election.The country is still in the grips of significant insecurity following the murderous attacks perpetrated by the Islamic AlShabaabgroup in September 2013 (Westgate shopping centre in Nairobi) and in April 2015 (Garissa university), presented by thisgroup as revenge for the operations carried out in Somalia by the Kenyan army. Last update : January 2016
LOGISTICS IN EAST AFRICA THROUGH KENYA
Country of study Kenya: Kenya as the logistics
outperformer in East Africa; Overview, Bottlenecks,
Improvements and Process of Documentation in Kenya
CHAPTER
Introduction
Overview of East African Logistics Development
Logistics Connectivity from Kenya to Neighbouring Countries
Infrastructure Projects
Bottlenecks on the Development of Logistics Services in Kenya
How RSA Can help Exporters from Dubai to Trade with East Africa
References
INTRODUCTION Mombasa port is the major gateway of trade to East Africa. It is one of the top five container ports in Africa and East Africa’s biggest port. The government of Kenya has strategically aligned the port of Mombasa and increased investment in infrastructure development at the port to modernize and develop the port to international standards. There is increased competition from neighboring Tanzania, and the Kenya government is working towards expanding infrastructure such as railways, building new berths to tackle congestion and improve efficiency. Kenya is constructing a $13 billion railway project that will link Mombasa to the capitals of Uganda and Rwanda. The Kenya Ports Authority (KPA) has opened a 19th docking station and is investing $320 million to add three more at a new container terminal that will more than double capacity to 2.3 million containers, the biggest upgrade to the port since 1980. The government is building a new facility at Lamu. Neighboring Tanzania is spending at least $10 billion constructing a new port at Bagamoyo, 37 miles northwest of Dar es Salaam, where it is upgrading an existing facility. Tanzania signed a loan agreement with China Merchant Bank in March to help finance the construction of Bagamoyo, which will have the capacity to handle 20 million containers a year when construction is completed in 2017. Africa’s busiest port at Port Said in Egypt handles 3.71 million containers a year, according to the World Shipping Council’s website. The Kenyan port’s loss of business to Dar es Salaam has grown since post-election violence in the first two months of 2008 disrupted trade flows. Dar-es-Salaam port was a better option and retained some business. However, due to the cost involved, regional countries, such as Uganda, prefer using the Mombasa port whose route is shorter and less costly compared to the Southern Corridor. Volumes at the Dar es Salaam port have increased an average 9.4 percent annually during the past five years, compared with 6 percent in Mombasa, Trademark East Africa data shows. Tanzania and Kenya are serving the same landlocked countries and firms will choose to use the facilities that will handle their cargo efficiently and with speed. Dar es Salaam has increased its share of Rwanda’s imports and exports compared to Kenya. Thus the investment in modernization of ports and infrastructure and the general competition between
the ports in Tanzania and Kenya will improve efficiency, resulting in reduced delays and lower costs.
OVERVIEW OF EAST AFRICAN LOGISTICS DEVELOPMENT Dubai Port World plans to construct a $40 million inland container depot on a 30-hectare plot of land in Masaka, a suburb east of Kigali city, as Rwanda seeks to become a regional trade logistics center. Dubai Port World has been granted a 25-year concession to finance, develop and manage the facility, which will provide warehousing, truck parking, a container yard and other auxiliary services. According to Dubai Ports, the first phase of the Inland Container Depot, at the Kigali Logistics Platform, is set to be complete in 18 months’ time from January 2016, raising hopes that it will contribute to the ease of doing business in the country. When completed, analysts are optimistic the dry port, which is linked to both the Northern and Central Corridors, will allow Rwandan importers and exporters to consolidate volumes of cargo. In East Africa, transport and freight costs are among the highest in the world, with freight logistics expenditure more than 50 per cent higher per kilometer than in Europe or the United States. This extra cost is caused by a “logistics gap”: a lack of infrastructure, technology and expertise affecting everything from road networks to payment systems and warehousing facilities. In landlocked countries like Rwanda and Burundi, this gap is even more pronounced — transport costs there can reach as high as 75 per cent of the value of imports. Transit times are also high in East Africa. The 1,600km journey from Mombasa (Kenya) to Kigali (Rwanda) takes on average 422 hours — nearly 18 days. Trucks must stop at two border posts and are likely to encounter 45 roadblocks, each of which involves delays and costs, as well as potentially damaging the goods being transited. In contrast, a truck covering a similar distance in Europe — driving from, say, Rotterdam (The Netherlands) to Budapest (Hungry) — would be able to complete the route in less than a day. These high costs have a significant impact on the lives of people living in the region. Transportation expenses are passed on to small businesses and consumers — indeed, the World Bank estimates that logistics costs account for 40 per cent of consumer prices in East Africa.
In order for East Africa’s exports to compete in the global marketplace, businesses operating in the region need to have reliable flows of inventories such as raw materials or finished goods, without which businesses need to carry higher levels of inventory to deal with uncertainty. This raises costs, erodes efficiency and results in poor competitiveness and high prices. This applies just as much too international companies operating in the region as to local players. DHL, for example, has over 3,300 service points across Africa — a network that it has developed by forming partnerships with small businesses, fuel retailers and supermarkets. The company has grown a successful business in Africa by adapting to local circumstances: The informal economy, rural population and large number of SMEs. For many companies, however, the prospect of entering a market with so many challenges is daunting. Since 2008, freight volumes through East Africa’s major ports, Mombasa and Dar es Salaam, have grown at 8 per cent and 13 per cent per annum respectively.
LOGISTICS CONNECTIVITY FROM KENYA TO THE NEIGHBORING COUNTRIES Kenya is considered a gateway by sea to East African countries such as Uganda (through Busia and Malaba), Rwanda, Burundi and Central Africa. In some instances Tanzania uses Kenya’s port especially for cargo to Arusha through Namanga and Holili Borders. By air: Jomo Kenyatta International Airport (JKIA) is used by Kenya and East African countries for trans-shipment to their various countries. Road and rail network: Land-locked countries use Mombasa as port of entry thus all sea cargo whose port of entry is Mombasa subsequently use the Kenyan road and rail network to get to their various countries of destinations. It is also worth noting that Kenya port as much as it has its own challenges is considered more efficient in comparison to Tanzania Port in Dar-es-salaam. Urgent cargo to Tanzania is cleared under bond to Tanzania via Holili and Namanga Border.
HOW RSA HELPS TO CONNECT TO THE NEIGHBORING COUNTRIES EAST AFRICA DISTANCE, DURATION, COST OF TRANSPORT
From To Distance Estimated Duration
LCL 40ft $
20ft >15tonnes $
Mombasa Nairobi 484 km 9hrs 200 1000 850
Kisumu 830km 18hrs 250 1450 1200
Machakos 486km 6hrs 200 1000 500
Nyeri 630km 12hrs 200 1100 950
Nakuru 643km 15hrs 200 1200 1000
Eldoret 796km 18hrs 200 1350 1200
Kisii 788km 18hrs 200 1400 1200
Lokichogio 1331km 1-2days 200 2700 2300
Garissa 468km 18hrs 500 1300 1000Within Mombasa
250 180
Regional Coverage
Uganda Mombasa Kampala 1333km 1-2days 2000 2700 2500
Jinja 1063km 1-2days 1800 2500 2200
Lugazi 1096km 1-2days 1800 2500 2200
Entebee 1174km 1-2days 1800 2600 2400
Nairobi Kampala 657km 1-2days 800 2400 2200
Jinja 580km 1-2days 750 2300 1850
Lugazi 613km 1-2days 800 2300 1850
Entebee 691km 1-2days 800 2400 2000Sudan
Mombasa Rumbek Not available
2-4days 10000 10000
Juba 1390-km Aprox
2-4days 5200 5500 5200
Wau Not available
2-4days 11000 11000
From To Distance Estimated Duration
LCL 40ft $
20ft >15tonnes
$
Nairobi Rumbek Not available
2-4days 8000 8000
Juba 893km 2-4days 5000 5000 5000
Wau 1760 km 2-4days 9000 9000 Tanzania
Mombasa Dar-el-Salaam
542km 1-2days 800 2300 2000
Arusha 388km 18hrs 800 1800 1600
Mwanza 1005km 18hrs 1000 2000 1900
Nairobi Dar-el-Salaam
919km 1-2days 1000 2950 2700
Arusha 268km 8hrs 900 900 1200
Mwanza 680km 13hrs 1000 1500 1200 Rwanda
Mombasa Kigali 1461km 1day 3600 4200 4000
Nairobi Kigali 1181km I day 3000 3800 3500
Burundi Mombasa Bujumbura 1502 km 1-2days 4700 6000 4950
Nairobi Bujumbura 1374km 1-2days 4200 5500 4700 Notes:
LCL cargo depends on weight and type of cargo therefore the cost may vary.
Costs given are based on market rate estimates
VARIOUS INFRASTRUCTURE PROJECTS IN KENYA The East Africa Community is working together to improve the infrastructure in order to utilize the ports efficiently. SGR (Standard Gauge Railway) PROJECT: Regional economic interests have worked in favor of the SGR project. It was reported that by the end of this year, the Government will begin importing 60 locomotive engines, 1,620 wagons and 40 passenger coaches ahead of 2017. “These will be enough to start the SGR operations. We are planning to start training about 200 Kenyans between now and 2017 on operation and maintenance of the locomotives,” Maina said. The Government has contracted China Roads and Bridges Corporation (CRBC) to construct the railway line between Mombasa and Nairobi. In this regard, the SGR line will snake its way from the port of Mombasa to Kigali through Kampala with a branch line to Juba. In Kenya there will be a branch line to Kisumu from Eldoret. As a necessary transport mode, the project is therefore a key component of the Northern Corridor. Kenya is vigorously pursuing the development of the first phase of the SGR from Mombasa to Nairobi. Advantages of SGR
o Reduce congestion at the port of Mombasa. o Quick container turn around. o Low handling and transportation cost of cargo from port to various
destinations that rely on the port of Mombasa. Socio-economic advantages:
o Protect environment through reduced carbon emission. o Reduce trucks from the main Kenyan roads, reducing road accidents.
LAPSSET PROJECT IN LAMU The government plans to construct a new transport corridor covering rail, road and an oil pipeline from Lamu and connecting Kenya with Ethiopia and South Sudan. Kenya is spearheading the development of the LAPSSET (Lamu Port- South Sudan, Ethiopia Transport) Corridor Project to strengthen her position as a gateway and a transport and logistics hub to the East African sub-region and
The following are project components being undertaken by the ministry: 1. Lamu Port at Manda Bay (32 berths including associated
infrastructure) The commencement of construction of the first three berths of Lamu Port was launched in May 2015. So far, construction activities for preliminary facilities at Lamu Port are ongoing.
2. Standard Gauge Railway (SGR) Line from Lamu – Isiolo – South Sudan (Juba) – Ethiopia (Addis Ababa); The construction of the SGR spanning from Lamu to Moyale and Nakodok as given below is on course;
o Lamu – Isiolo – Nginyang – Lokichar – Nakodok (1250 Km) o Isiolo – Marsabit – Moyale (470Km) Railway Project Comp
onent under the LAPSSET Corridor Project The government of Kenya (GoK), represented by Kenya Railways Corporation (KRC) and LAPSSET Corridor Development Authority, signed a memorandum of understanding. A preliminary design and feasibility report was submitted to the authority and KRC on 23rd April 2015
3. Highways; Design is in progress with AFDB funding as follows: o Lamu – Garissa (D568) 250Km), o Garissa – Isiolo-Ngiyang (C81,D586,B9) (423Km) o In addition, the GoK has secured funding from the World Bank for
the construction of Lokichar-Nakodok road section (298kms) of the Eldoret-Kitale-Lodwar-Sudan Corridor.
o The GoK has also approached other development partners to fund the remaining section of the highway connecting Kenya to South Sudan.
4. International Airports at Lamu, Isiolo, and Lokichogio . The ministry has embarked on improving facilities at the three airports to provide for air travel services in the interim to enhance accessibility to the corridor. Provision of airport facilities will strengthen build-up of air transport and logistics services along the corridor in readiness for the construction of the three international airports at the three locations in the future. Kenya Civil Aviation Authority has already made plans to establish air transport safety, security and surveillance facilities and services to strengthen air transport and logistics in Northern Kenya. Lokichogio Airport: Improvement works on Lokichogio Airport were completed
in the recent past and its already operational with scheduled flights landing at the airport
Manda Lamu Airport: The government recently completed lengthening of Lamu Manda Island Airport runway from 1.1km to 2.3 kms the airport terminal building and Preparations are at an advanced stage towards the construction of a parallel taxiway and aircraft apron area to improve capacity of the airport. These improvements will enhance the capacity of Manda Lamu Airport that already has a strong scheduled flights clientele.
Isiolo Airport: The Government has completed construction works on the 2.3km Isiolo Airport runway. Construction works are currently ongoing for the Airport Terminal Building.
Advantages of LAPSSET LAPSSET will enhance efficient, seamless inter-modalism in the country’s transport and logistics operations. Overall, the development of the LAPSSET Corridor will create employment and reduce poverty in the country as well as improve accessibility and enhance socio-economic development of the northern part of the country. A seamless interconnectivity will also be created within coastal counties throughout the country, as well as linkages to neighboring countries through the country’s roads, railway, ports, and airports. The project will strengthen Kenya’s regional hub status in Eastern Africa as a result of the country being the originator of trans-boundary transport projects, special economic zones and Free Trade Areas The project will help the region create capacity in infrastructure industry from human, technological, financial and consumer industries in the country. Countries like China, India, Malaysia, Brazil, Iran and Singapore among others have used this model to adapt technology and train their manpower while building capacity in their delivery institution. The LAPSSET Project will open up 70% of the country that has not been invested in since independence 50 years ago and will more than triple the investment space in the country. In this initiative the government is focused on increasing the participation by Kenyans in wealth creation, as well as retaining resources that will accrue within the country’s boundaries to make the economy more sustainable.
EXPANSION OF THE PORT OF MOMBASA This project includes construction of a container terminal and provision for cargo-handling equipment at the port of Mombasa, the largest commercial port in East Africa. This responds to the increasing demand for cargo volume and makes port management more efficient, with the objective of promoting trade and contributing to socioeconomic development in the region overall, including Kenya and the neighboring countries. Majority of the cargoes handled at this port are imported goods such as fuel, iron and steel products, fertilizer, food, and used cars from Japan and other countries. Container traffic has been on the rise recently with the volume handled at the port, more than tripling over the past decade from 300,000 TEUs (twenty-foot equivalent units) in 2002 to 900,000 TEUs in 2012. It is predicted that the demand will continue increasing, with a projection of more than 2.6 million TEUs in 2025. Given these circumstances, the GoK has made plans for a new container terminal, and with JICA’s support (a Japanese ODA loan for Mombasa Port Development Project (Phase 1), for which the loan agreement was signed in November 2007) is moving forward with terminal construction, which is planned to be completed in March 2016. However, even with the new terminal under construction adding capacity of approximately 580,000 TEUs, the total capacity will be 1.3 million TEUs, falling short of the projected 1.32 million TEUs of demand in the year 2016. The ability to meet the growing demand will thus approach its limit, which may disrupt distribution of goods. In order to cope with a rapid increase in the volume of container cargo handled at the port, boosting the container-handling capacity is a priority. CONSTRUCTION OF DONGO KUNDU AND FREE ZONE AREA The Kenyan Government has also started facilitating the development of a Free Trade zone similar to the one in Dubai on a 3,000-acre land at Dongo Kundu owned by the authority through public private partnership arrangements. This is under the Mombasa Special Economic Zone (SEZ). Also underway are plans to link the project area and Mombasa – Lunga Lunga – Nairobi Highway known as the Dongo Kundu Bypass. The projects aim is to ease traffic flow on the Likoni Channel to Kenya's South Coast. It measures about 17.5 km from Miritini at the mainland to Ng’ombeni to the south mainland. The bypass will consist of four bridges through swampy land and ocean.
Construction of the first berth of the Mombasa Special Economic Zone (SEZ) is expected to start in 2016 as Kenya prepares to launch its logistics and industrial hub in the coastal city. The berth construction, expected to take three years, will be done parallel to the development of the free port, a free trade zone, and setting up of the initial industries in the 3,000- acre owned by the government. This is creation of an economic engine in the region and a regional production hub. In the free trade and industrial zone, businesses will enjoy relaxed regulations and exemptions from certain taxes. In particular, manufacturers importing raw materials and producing goods in SEZ, and exporting them at port will be able to trade goods at a globally competitive price as a result of reduced handling time and cost In the free trade zone, the light industry such as packaging will benefit from lower tax compared to tenants in industrial park. Other targeted industries include steel mills, machine and motor vehicle assembly, pharmaceutical industries, mineral processing and light industries like agro-processing and furniture making. Other planned zones include an enterprise area, a zone for business-based tourism (meetings, conferences and exhibitions), a residential area and a utility area for a power substation and other common utilities. The Mombasa Southern bypass road is expected to be completed by 2018 and will be the link between the SEZ and Mombasa city. It is expected that construction of the second berth will commence in mid-2022 with development of the various zones being undertaken in phases. The SEZ is planned to be fully operational by 2030. THE SINGLE WINDOW SYSTEM Single window system was implemented last year 2015 in Kenya. The objective of the Single Window system was to reduce cargo dwell time as it eliminates existing inefficiencies, for instance the inefficient space utilization at ports, where waiting times lead to congestion. Furthermore there are inefficiencies in the cargo clearance process which involves manually handling paper documents between many stakeholders. These inefficiencies lead to delays in cargo clearance, high trade transaction costs and corruption which together reduce
Kenya’s competitiveness. Implementing single window reduces the time drastically to as most of the work is captured and verified online. The cargo dwell time is expected to reduce as follows: Three days at the port, from 10 – 14 days before. One day at the airport; from 2days before. Maximum of one hour at the border. From 2days before. BOTTLENECKS IN LOGISTICS SERVICES IN KENYA The analysis in Kenya shows that the transport costs and delays are significant on the Northern corridor. The dwell time of containers as reported by forwarders (KPA has no statistics on dwell times) is estimated at around two weeks. The transit to Rwanda’s capital Kigali takes about ten days which is costly. The main bottlenecks for transport operators are: In Mombasa:
o The congestion at the container terminal o The flow of procedures and documentation
In transit: o The organization of transit cargo and procedures o The implementation of axle-load policy (weighbridges). o It is important to note the whole clearance process involves many
stakeholders (such as customs, Kenya Ports Authority, shipping lines, transporters, Kenya bureau standards) this creates bureaucracy leading to delays and high costs.
o Breakdown showing cost and delays of the typical import/ transit cycle for an imported container from Port of Mombasa across Kenya to Uganda and Rwanda.
Delay Time Comment Arrival to Removal in the port of Mombasa
2 weeks (not much difference between transit & clearance in Kenya)
Transit in Kenya (convoys) 3 to 6 days Vehicle may have to wait 2 days for departure of convoy from Mariakani (3 times a week)
Mombasa Nairobi 1-2 days Border crossing in Malaba 2 days Malaba to Kampala 1-2 days Kampala to Kigali 2-3 days
These delays although long are already an improvement on delays observed five years ago. 28 days were needed to clear customs, and up to one month for the turnaround to landlocked countries.
Cost of Transportation for Containers (road) Nairobi Kampala Kigali 20’ $50 per ton $ 1350- $1400 $3000 or $150
per ton 40’ $900-$1000 $ 2700 -$3200 $3500-4500
Ports handling and storage fees can be summarized in the following table. In addition to these charges, small facilitation payments (100 to 500 KSh) for each step are required to move a container within the terminal. Mombasa Port Charges 20 ft 40 ft Additional charges Additional charges after 4 days from the ships arrival port charge
12.5 $ per day
Handling charge 150$ 180$ Small trade levy 3$ 6$ Stripping fee $75 per container Total inspection cost $200 per container
Shipping line charges Shipping lines impose penalties for delays in the return on empty containers. This is a perfectly legitimate procedure, but in the context of the Northern Corridor, this constraint is taken very seriously by the operators because there is not much margin for the extended procedures or containers stuck in transit. For local transport, the grace period for containers is 14 days and for transit it is 35-45 days, putting a large constraint for Uganda and Rwanda bound travel. From the above analysis the actual roundtrip almost always exceeds 35 days because in addition to normal delays caused by infrastructure and weighbridges, the containers are used for storage by Uganda customs which extends their roundtrip timing considerably.
Congestion at the Port in Mombasa Congestion is a major problem at the port in Mombasa. The container terminal is full, and empty containers that are returned have to be stored at the adjacent quay. Like for most ports in developing countries, the responsibilities of congestion and delays are spread among the various stakeholders. Problems are created by old equipment and poor infrastructure, port management, customs delays and behavior of consignees. There are no official dwell time statistics produced by KPA. According to professionals it should be about two weeks.
The conventional wisdom in Kenya is that the container terminal is at saturation and should be extended. According to KPA, the container terminal was designed for a throughput of 250,000 TEU. Congestion can probably be explained better with the following problems, (cf. World Bank 2003):
1. Low productivity in the container terminal (obsolete handling equipment and lack of automation)
2. Lengthy customs procedures and the movements of cargo they generate 3. Slow evacuation by some consignees and transport operators. 4. These problems all exist at the same time. 5. There is no reliable quantitative information about the individual
responsibilities of the various stakeholders. In fact, all the causes of delay combine and reinforce mutually their negative impact on port delay. It is not really possible to disentangle the causes of delay.
Congestion in Mombasa - Being Addressed: Fortunately, the congestion issue is being addressed, with both short and long-term tactics in place. A new container terminal is currently under construction in Mombasa, which will ease some of the burden on the port's current facilities. A longer-term strategy is a move to develop a new port for Kenya, with plans to develop this major facility in the north of the country. The port of Lamu is being developed with Chinese investment. The new facility, which will cost US$5.3bn, will be spread over 700 acres of land. It will include a 10-berth container terminal, three bulk cargo terminals and an oil terminal. The port will serve as the maritime entry point to the Lamu Port-Southern Sudan-Ethiopia Transport (LAPSSET) Corridor, which will include rail, road, oil pipeline and fiber optic cable connections with South Sudan and Ethiopia. The site will also be home to a new international airport.
HOW CAN RSA LOGISTICS HELP EXPORTERS FROM DUBAI TO TRADE WITH EAST AFRICA RSA Logistics is a multi-award winning third-party logistics provider based in Dubai (2009) with a major presence in Kenya since 2012, with global alliances that help extend our reach to every corner of the world. Our company offers storage and 360-degree supply chain solutions, including distribution, transportation, and international freight. RSA’s clients hail from a diverse portfolio of industries that include automotive, power generation, petrochemicals & chemicals and food & beverage. RSA further deploys its expertise by offering on-site logistics to companies that operate their own warehouses – bringing sophisticated and tailor-made people, process and technology solutions to the client’s doorstep. RSA Logistics, Kenya is a member of the World Cargo Alliance (WCA), Acquired local company Trade winds International, whose local expertise has helped RSA leverage its 3PL space in the market. RSA Logistics’ investments in Kenya include a modern integrated warehousing facility complete with racking facilities and an efficient IT platform to integrate the WMS offering with all other services. Our facility is strategically located between Sea Port of Mombasa and Jomo Kenyatta International Airport (JKIA), providing the ideal infrastructure for its transportation, distribution and international freight service offerings. RSA’s innovative solutions and high-tech value-added services ensure a personalized services like no other for its customers. Our services include: Customs Brokerage, Local Haulage & Freighting both Sea and Air at all the ports Mombasa, ICD Nairobi, JKIA, Malaba, Namanga and Busia. We provide door-to-door services to most of our clients, such as GIT Dubai and GIT East Africa (manufactures of Printer Cartridges), Skanem Inter labels Limited and Infraenergy Services Limited Nairobi, Kenya (manufactures of self-adhesive labels) for freight, transport and customs clearance, WMS services and local distribution in Kenya. By the end of 2016 we will be operational with 25,000 sqm of open yard for storage facilities. We manage our transportation platform in a way that ensures higher levels of service and visibility. We provide cost-effective, secure and sustainable road transportation solutions. We manage all key points of interface, cross border movements and product visibility, with product and temperature tracking maintained every step of the way. By managing both the system and the third-party
suppliers who deliver the goods, we are able to improve our customers’ asset utilization and operational efficiency. Armed with a reliable and time-tested global agent network, our team applies local/regional market knowledge to every shipment, moving freight from door to door with precision. We have all the required contracts with ocean liners and airlines to be able to offer guaranteed service deliverables in a timely manner. Our operations are further enabled by a user-friendly software that allows for event-based tracking of shipments.
OUR OFFICES IN DUBAI & KENYA:
RSA Dubai
RSA Logistics DWC-LLC P.O. Box 644313 Dubai Logistics City Dubai South Jebel Ali, UAE. Telephone: + 971 4 8879333 Fax: + 971 4 8879223 Email: [email protected]
KENYA OFFICE
RSA Logistics Ltd Upper Plot Valley View Park Estate Molongo, Nairobi ,Kenya. Telephone: +254 722511106 +254 731406670 E-mail: [email protected]
REFERENCES
1. http://www.president.go.ke/projects/ 2. Bloomerg 2016 news 3. www.trademarkea.com 4. http://www.bmiresearch.com/ 5. http://www.kra.go.ke/index.php/customs-services/clerin-agents/licensing-
procedures 6. Local News papers, Nation, Business daily, Uganda Monitor. The East
African periodical 7. http://www.kpa.co.ke/ 8. http://www.jica.go.jp/
PVoC (Pre-Export Verification of Conformity) for Exports to Kenya To assure Kenyan consumers of the safety and quality of the imported goods they buy, and to protect Kenyan manufacturers from unfair competition, the Kenya Bureau of Standards (KEBS), a statutory organisation of the government of Kenya, has implemented guidelines called the Pre-Export Verification of Conformity (PVoC) to Standards Programme for exports to Kenya. In January 2015, Intertek was awarded a further contract by KEBS to operate the PVoC programme on KEBS behalf in regions such as parts of Europe including the UK, North America , Latin America, China Region, Australasia, Western Africa, Indian Subcontinent and the UAE. To see a full list of the distribution of regions, please email [email protected], or contact your local Intertek dedicated Kenya expert whose details can be found in the Kenya PVoC Customer Service Centres list. As of 1st December 2015 KEBS further expanded the regulated product list to include all products except those exempted below:
Goods already regulated by other government agencies such as the Pharmacy and Poisons Board (PPB), Kenya Plant Health Inspectorate (KEPHIS), Pest Control and Products Board (PCPB).
CKD for vehicles imported by registered manufacturers Primary inputs imported by registered manufacturers subject to proof that
the materials are direct inputs to the manufacturing process and the finished products made out of the said raw materials are certified by KEBS.
Manufacturing plants and industrial spares for own use imported by registered manufacturers.
Printed matter (textbook, magazines) Products certified by KEBS under the Diamond Mark Scheme Courier shipments through JKIA (Airport) which are currently cleared under
the Memorandum of Understanding (MoU) between KEBS and Courier Industry Association of Kenya (CIAK).
Kenya PVoC - Kebs Responsibilities
The Kenya Bureau of Standards (KEBS), is responsible for the adoption and application of standards for both imported and domestically manufactured products in the Kenyan market including the Kenya PVoC. The Kenya PVoC to Standards Programme is a conformity assessment and verification procedure applied to regulated Goods/Products in the respective exporting countries, to ensure that they comply with the applicable Kenyan Technical Regulations and Mandatory Standards or approved equivalents. The primary objective of applying Pre-Export Verification of Conformity (PVoC) to Standards Programme is:
Ensure quality of products, health and safety Protect the environment for Kenyans Meet requirements of the Kenya PVoC
All consignments which are subject to the Kenya PVoC must obtain a Certificate of Conformity (CoC) issued by an authorised PVoC Agent, such as Intertek, prior to shipment. The CoC is a mandatory document for Customs Clearance in Kenya; consignments arriving at Kenyan Ports without this document will be denied entry into the country. In exceptional cases, and at the sole discretion of KEBS, specific consignments may be allowed to undergo destination inspections after receiving the appropriate application from importers. Such consignments will be subject to a penalty of 15% of the CIF value of the goods, plus 15% bond, and the testing and inspection costs. All other expenses incurred at destination will be borne solely by the importer. The key elements undertaken in the PVoC are:
Physical inspection prior to shipment Sampling, testing and analysis in accredited laboratories Quality Audit of production processes Documentary review of conformity with regulations Issuance of Certificate of Conformity (CoC) or Non Conformity Report
(NCR) as appropriate.
Kenya PVoC - Exporter and Importer Responsibilities
Exporters and importers are responsible for ensuring that their products and shipments fully comply with the Kenya PVoC (Pre-Export Verification of Conformity to Standards Programme) and obtain the mandatory PVoC certificate of conformity. Responsibilities of:
a) Importers in Kenya Ensure their suppliers understand the import quality requirements and that their consignments are accompanied by a Kenya PVoC Certificate of Conformity (CoC) from an authorised PVoC Agent such as Intertek.
b) Exporters to Kenya Ensure their products or goods meet the regulations and quality requirements of the Kenya PVoC before shipment by obtaining the necessary Certificate of Conformity (CoC) from an authorised PVoC Agent for all products subject to the PVoC programme. KEBS: Ensures that only quality goods gain entry into the country, as specified by the Standards Act Cap 496, Laws of Kenya and the Quality Imports Order No.78 July 2005, thereby offering the necessary protection to Kenya's consumers in safety, health and environmental matters. Routes of Certification Route A - Occasional Exports
No registration Testing and Inspection Issuance of CoC
Route B - Frequent Exporters Product registration Inspection and random testing Issuance of CoC
Route C - Frequent Exporters and High Volume Manufacturers Product licensing Licence review and random testing Issuance of CoC Intertek can provide a tailor-made service that meets your particular
needs, including: Submission of assessment requests online Automated e-mails for status of certificates
Flexible certificate delivery solutions for high volume users
Additional Information for Exporters of Wood Packaging Material The Kenya Plant Health Inspectorate Service (KEPHIS) have announced that all shipment packaging material made up of wood and wooden packaging material such as planks, crates that is imported into Kenya shall be adequately treated and marked in line with the International Sanitary and Phytosanitary Measure (ISPM) No. 15 requirements. Failure to do so may result in shipments facing delays at Kenyan Customs. A copy of the KEPHIS memo issued to all Kenyan Importers is available within the Resources section on the right of this page. Kenya Import Standardization Mark (ISM) All imported finished products that are to be placed in the Kenyan market must be labelled with the Import Standardization Mark (ISM) sticker this was effective from 1st September, 2015. In accordance with the revised Import Standardization Mark (ISM) procedures issued by the Kenyan Bureau of Standards(KEBS), all imported finished products being placed in the Kenyan market are required to be labelled with the ISM sticker this became effective from 1st September, 2015. KEBS have made ISM mandatory for all imported products that comply with the requirement of the relevant Kenya Standard or approved specification. The objective of this new regulation is to assure Kenyan consumers of the product’s safety and conformity to the Kenyan standards. Imported products already in the market can be sold without the new ISM stickers' up to 30th June, 2016. No imported product subject to this regulation will be allowed for sale in the Kenyan market without the ISM sticker after 30th June, 2016. Importers with large volumes of old stock which are likely to be in the market after the above deadline are advised to apply and acquire the new ISM stickers from KEBS. Click here for a full list of products that are subject to mandatory inspection within the Pre-Verification of Conformity (PVoC) programme. Exporters can present products appearing in the PVoC regulated product list to KEBS appointed
inspection agents, such as Intertek, for conformity verification and on successful verification obtain a Certificate of Conformity (CoC) in the country of supply. Importers of finished goods, irrespective of their regulatory statu,s within the PVoC are encouraged to obtain CoCs for faster issuance of ISM. Importers of such commodities must obtain the ISM stickers directly from KEBS by submitting the following documents:
ISM application form, Certificate of Conformity (CoC) issued by an approved PVoC service
provider such as Intertek Import Declaration Form (IDF) Packing list.
Application for ISM stickers MUST be submitted before KEBS final clearance of the goods from the Port of Entry. Products already certified by KEBS under the Diamond Mark of Quality Scheme are exempted from mandatory application of ISM (Detailed list is provided in the guidelines). More information on the new ISM such as detailed guidelines, FAQs, Application Form etc., is available on KEBS website. (http://www.kebs.org/) Source: http://www.intertek.com/government/product-conformity/exports/kenya/ Contact Information for Intertek in Dubai: Mr. Husny Saeed General Manager, Intertek International Dubai Governments & Trade Services M.E Millennium Plaza Tower 14’th Floor Sheikh Zayed Road, PO Box 26290 Dubai. U.A.E +971 4 3178777 (Office) +971 50 4504999 (Mobile) [email protected]
GTS-PM-KPV-EIG-DEG-11 Page 1 of 9
KENYA BUREAU OF STANDARDS
PRE-EXPORT VERIFICATION OF CONFORMITY TO
STANDARDS
ISSUED: 01-Feb-15
THE REPUBLIC OF KENYA
EXPORTER AND IMPORTER GUIDELINES
DETAILED EXPORTER AND IMPORTER GUIDELINES
INTRODUCTION The Kenyan Bureau of Standards (KEBS), a statutory organization of the government of Kenya, is responsible for the adoption and application of Standards for both imported and domestically manufactured products in the Kenyan market. With effect from 29
th September 2005, KEBS implemented the Pre-Export Verification of Conformity (PVoC) to Standards
Programme. This is a conformity assessment and verification procedure applied to specific Goods/ Products at the respective exporting countries, to ensure their compliance with the applicable Kenyan Technical Regulations and Mandatory Standards or approved equivalents. KEBS has appointed Intertek as one of the Agents to operate the PVoC program on its behalf, depending on the country of supply. The applicable countries of operation for Intertek, Zones of Responsibility, are listed in Appendix A of this document. All consignments subject to PVoC must obtain a Certificate of Conformity (CoC) issued by PVoC Agent operated and managed by authorized KEBS PVoC Agents, prior to shipment. The Certificate is a mandatory Customs Clearance document in Kenya; consignments arriving at Kenyan Ports without this document may be denied entry into the country. Any regulated product shipments arriving at the port of entry without a CoC will be subjected to destination inspection at a fee equivalent to 15% of the CIF value of the shipment. The importer will be further required to execute a redeemable bond of a similar amount pending quality verification. All other expenses incurred at destination will be borne solely by the Importer.
GENERAL OUTLINE OF THE OPERATIONS OF THE PVOC PROGRAMME Over the years, KEBS has been undertaking conformity assessment of both locally manufactured and imported goods as part of its mandate in implementation and enforcement of Kenya standards through the Quality Assurance, and Import and Export Department. However, verification of imported goods was hitherto restricted to post-shipment verification. This not only led to delays at the port of entry, but also laid on KEBS a heavy responsibility of ensuring that substandard goods are re-exported or destroyed in an environmental friendlier manner. To curb some of these problems, KEBS has put in place PVoC programme to ensure that selected goods are verified for conformity to relevant Kenya standards or approved equivalents before shipment to Kenya. The primary objective of the programme is to ensure quality of products, health and safety, and environmental protection for Kenyans and this is reflected in the product coverage scope. The key elements undertaken in PVoC are:
Physical inspection prior to shipment,
Sampling, testing and analysis in accredited laboratories,
Audit of product processes,
Documentary check of conformity with regulations; and
Assessment of conformity to standards
PRINCIPLES OF THE PROGRAMME The PVoC Programme is based on Article 5 of Technical Barriers to Trade (TBT/WTO), which requires that technical requirements (i.e. Standards) applied to foreign products must also be applied to domestically manufactured products. Since PVoC is a conformity assessment process to verify that products imported to Kenya are in compliance with the applicable Kenya standards or approved equivalents, regulations and technical requirements before shipment, it is the sole responsibility of the supplier (i.e. exporter) to demonstrate the same and hence meet any associated costs of verification.
GTS-PM-KPV-EIG-DEG-11 Page 2 of 9
KENYA BUREAU OF STANDARDS
PRE-EXPORT VERIFICATION OF CONFORMITY TO
STANDARDS
ISSUED: 01-Feb-15
THE REPUBLIC OF KENYA
EXPORTER AND IMPORTER GUIDELINES
DETAILED EXPORTER AND IMPORTER GUIDELINES
HOW TO OBTAIN A CERTIFICATE OF CONFORMITY
The PVoC compliance procedures are designed to provide maximum flexibility to Exporters and Importers by providing three (3) possible routes for obtaining a Certificate of Conformity (CoC) for their shipments. The method utilized will depend on the frequency of the Exporter’s shipments to Kenya and the level of compliance they are able to demonstrate initially when applying for certification.
Request for Certification The electronic Import Declaration Form (IDF) data which is made available to the PVoC Agent(s) by KEBS will be utilized by the PVoC Offices in the country of supply to contact the Exporters and provide then with a Request for Certification Form (RFC) if the products exported by them are regulated. The Exporter must send the completed RFC form along with a copy of the IDF, Proforma Invoice and provide information about the date and place for inspection. In addition, the exporter should include the test reports (if available) and where applicable copies of the Statements of Registration and/or Licence. Determination of Route The PVoC Office will review the RFC and attached documentation and will confirm the applicable route for certification and the applicable standards/regulatory requirements. Product Testing Wherever possible, the PVoC Offices shall arrange for product sampling and testing with an approved or an ISO/IEC 17025 accredited laboratory in advance of the scheduled date of shipment. The Exporters should wait for test results before proceeding with the dispatch of their shipment. Where the Exporter wishes to provide test certificates, these should be from a laboratory accredited to an ISO/IEC system or other approved laboratories. The Exporter may also make arrangements to have the tests witnessed by a PVoC Office staff. Test reports should be submitted to the PVoC Office along with a copy of the Laboratory Accreditation. The test reports must be sufficiently detailed so as to demonstrate traceability to the consignment to be shipped to Kenya. Inspection The PVoC Office will contact the place of inspection and confirm the appointment for physical inspection of the consignment. Physical inspection is normally carried out to verify requirements that may be visually verified (e.g. product labeling) and to ensure reconciliation of the consignment with previously submitted test reports. If applicable, product sampling for testing purposes may also be performed during physical inspection. In such case however, exporters should wait for test results before shipment. Certification Except for air-shipments, the exporter shall submit a final invoice to the PVoC Office as soon as possible after physical inspection. The PVoC Office will perform a final review of all test and inspection reports and decide upon the issuance of the Certificate of Conformity (CoC) or Non-Conformity Report (NCR). PVoC Office will indicate any corrective actions needed prior to the issuance of a Certificate of Conformity. Only if the discrepancy is corrected, a CoC will be issued.
GTS-PM-KPV-EIG-DEG-11 Page 3 of 9
KENYA BUREAU OF STANDARDS
PRE-EXPORT VERIFICATION OF CONFORMITY TO
STANDARDS
ISSUED: 01-Feb-15
THE REPUBLIC OF KENYA
EXPORTER AND IMPORTER GUIDELINES
DETAILED EXPORTER AND IMPORTER GUIDELINES
ROUTES FOR CERTIFICATION
ROUTE A – CONSIGNMENTCERTIFICATION
Under Route A, products to be shipped have to be both tested and physically inspected to demonstrate conformity to relevant standards, essential requirements or manufacturer’s specification. This Route is open to all products being exported by either traders or manufacturers. This Route is open to any trade party, shipments or products and certification process is as outlined below:
Step 1 – Submission of Request for Certification (RFC) by the Exporter The Exporter shall complete and submit RFC form (available on the website) to the respective PVoC Agent’s office together with the following documentations:
DOCUMENTATION IMPORTANCE
Product Data Sheet and/or Product Description Mandatory (to specify the product intended use)
Product Technical Specification If Available (from the manufacturer)
Proforma Invoice Mandatory
Import Declaration Form Mandatory
Unique Consignment Reference (UCR) number Where applicable
Instruction Manual / Operating Instructions Where applicable
Production Data Where applicable (Batch No/Lot No, Size, Manufacturer’s Name, Production Date, Expiry Date, etc.)
QMS Certificates, Conformity Marks, Safety Marks, National Approval
If Available
Third Party Test Reports If Available
Distributorship/Dealership Agreement If Available (only applicable to manufacturer authorized distributors or dealers)
NOTE: Quality and completeness of the above mentioned documentation directly influences time and cost of processing of the order/request.
Step 2 – Review of Documentation submitted by Exporter to the PVoC Agent The concerned PVoC Agent shall review the documentation for completeness and to:
ACTION PURPOSE
Establish the appropriate Kenya Standard and/or international equivalent
Standard application priority to be applied
Establish the essential requirements Based on Health and safety hazards as per the Standard
Establish product risk profile For purposes of determining level of intervention
Prepare inspection and testing instructions See: Step 3 and 4 below
And respond to the Exporter’s request giving details specified below within 48 hours:
Missing documents (if any);
Essential requirements (as per the identified standard) and the level of intervention (i.e. where testing must be done, the Exporter shall be informed);
Proposed inspection date and schedule for the Exporter’s confirmation; any other PVoC related requirements.
Any other PVoC related requirements NOTE: Inspection shall be scheduled for a date not later than 3 days from receipt of the missing documents
specified in the PVoC Agent’s communication to the Exporter after reviewing RFC. However, if the RFC was accompanied with all the valid documents specified in Step 1, the inspection shall be scheduled for a date not later than 5 days from receipt of RFC unless the Exporter prefers a later date.
GTS-PM-KPV-EIG-DEG-11 Page 4 of 9
KENYA BUREAU OF STANDARDS
PRE-EXPORT VERIFICATION OF CONFORMITY TO
STANDARDS
ISSUED: 01-Feb-15
THE REPUBLIC OF KENYA
EXPORTER AND IMPORTER GUIDELINES
DETAILED EXPORTER AND IMPORTER GUIDELINES
Step 3 – Consignment Inspection by the Appointed Inspector The inspection shall be carried out as per the instruction prepared in Step 2. The inspection shall focus on marking, packing, product’s shelf life (where applicable) and visual product conformity for reconciliation with the test report. Assessment of product functionalities is critical more so where testing is not feasible (See: Step 4 below). Samples shall be drawn and respective packages from which samples are drawn marked appropriately by the inspector for testing. Upon completion of the inspection, the inspector shall prepare report detailing findings and remarks (recommendation). A copy of the report shall be submitted to the exporter immediately thereafter. Any discrepancy noted during inspection shall be brought immediately to the attention of the exporter through a discrepancy report. NOTE: Conformity assessment process is not yet complete upon completion of the physical inspection of goods.
Final decision on conformity of the inspected goods will be undertaken by the PVoC Agent after evaluation of the inspection report, test reports (where applicable) and other relevant quality documentations.
Step 4 – Consignment Testing Testing shall be confined to essential requirements or parameters of the applicable standard only. Testing shall only be performed on samples drawn by the concerned PVoC Agent in any of the following laboratories:
PVoC Agent’s laboratory
An independent laboratory accredited to ISO/IEC 17025 worldwide
Any laboratory not accredited to ISO/IEC 17025 or the manufacturer’s laboratory under witnessing by PVoC Agent. (This option is only open in instances where the first two labs cannot be found within the locality)
Witness testing shall be performed by qualified personnel familiar with the product and test methods. The PVoC Agent shall witness testing only in laboratories meeting requirements specified in ISO 9001 standard. Where testing is not economically viable/ feasible due to multi-line items, low value consignments, disassembled machinery etc., evaluation of the following documents may be carried out in lieu of testing:
Manufacturer’s own test report
Safety Marks/Conformity Marks/National Approvals (e.g. CE mark, type approval reports, etc.)
Relevant Quality Management System Certificates
Step 5 –Issuance of the Final Certification Documentation by the PVoC Agent Upon receipt of the inspection report (Step 3) and test report/documentary evaluation report (Step 4), the PVoC Agent shall take a certification decision and issue certificate (i.e. Certificate of Conformity or Non Conformity Report) within 2 working days of receipt of the reports and the final invoice. NOTE: Where testing has to be carried out, the final decision on conformity of goods will be taken not earlier than
the completion of testing. Exporter may contact the concerned PVoC Agent in order to obtain the Certificate of Conformity (CoC) or to know certification decision prior to shipment.
GTS-PM-KPV-EIG-DEG-11 Page 5 of 9
KENYA BUREAU OF STANDARDS
PRE-EXPORT VERIFICATION OF CONFORMITY TO
STANDARDS
ISSUED: 01-Feb-15
THE REPUBLIC OF KENYA
EXPORTER AND IMPORTER GUIDELINES
DETAILED EXPORTER AND IMPORTER GUIDELINES
ROUTE B – PRODUCT REGISTRATION AND CERTIFICATION OF SHIPMENTS
Route B offers a fast track certification process for goods with reasonable and consistent levels of quality through registration of such products by the PVoC Agent. Product Registration is recommended to Exporters having frequent shipments of homogenous products. The Registration is valid for a period of one year. Shipments of registered products are exempted from mandatory testing and certification may be based on physical inspection only. However, random testing of registered product is still required subject to a minimum frequency of testing once every 3 months to ensure product conformity throughout the registration period. The following products are however not eligible for registration under Route B. These are subject to certification under Route A only:
Sugar
Cereals and pulses such as Rice, wheat, beans, Maize etc.
Fertilizer
Animal and Fishery products (fresh and frozen, not further processed)
Dairy products
Fresh horticultural produce
Used or second hand goods.
PRODUCT REGISTRATION PROCESS
Step 1 – Submission f Registration Application Form to PVoC Agent by the Exporter Exporters seeking registration of their products under the PVoC programme may fill and submit to the PVoC Agent the Registration Application Form together with the following documentations:
DOCUMENTATION IMPORTANCE
Product Data Sheet and/or Product Description Mandatory (to specify the product intended use)
Product Technical Specification If Available (from the manufacturer)
Manual Operating Instructions Where applicable
QMS Certificates, Conformity Marks, Safety Marks, National Approval
If Available
Product Technical Specification If Available (from the manufacturer)
Third Party Test Reports/Authenticated CB test certificates If Available
Distributorship/ Dealership Agreement* If Available (only applicable to manufacturer authorized distributors or dealers)
NOTE: Traders dealing in branded goods shall provide evidence of their relationship with the Original Equipment
Manufacturer (OEM)
Step 2 – Review of Registration Application by the PVoC Agent PVoC Agent shall review the submitted documentations to:
Establish product compliance to Kenya Standard and/ or international equivalent
Review the Quality Management system documentation submitted to establish the exporter’s ability to consistently supply quality goods
The concerned PVoC Agent shall communicate the review outcome to the Exporter within 4 working days of receipt of the application. On successful review by the concerned PVoC Agent, the Exporter shall be issued with the Statement of Registration detailing the products registered, validity period and other registration conditions upon payment of the applicable fees.
GTS-PM-KPV-EIG-DEG-11 Page 6 of 9
KENYA BUREAU OF STANDARDS
PRE-EXPORT VERIFICATION OF CONFORMITY TO
STANDARDS
ISSUED: 01-Feb-15
THE REPUBLIC OF KENYA
EXPORTER AND IMPORTER GUIDELINES
DETAILED EXPORTER AND IMPORTER GUIDELINES
REGISTERED PRODUCTS SHIPMENT CERTIFICATION PROCESS Shipments of registered products still require Certificate of Conformity in order to be permitted into Kenya. However, the certification process is faster due to the above registration. Below is the procedure for certification:
Step 1 –Submission of Request for Certification (RFC) The Exporter shall fill and submit to the concerned PVoC Agent the following documentations:
RFC Form
Valid Statement of Registration containing goods to be shipped.
Proforma Invoice and Import Declaration form (IDF)
UCR number The concerned PVoC Agent shall review the documentations with a view to establish the validity of the Statement of Registration and schedule inspection for a date not later than 3 days from the date of receipt of the RFC unless the exporter/ supplier prefers a later date.
Step 2 – Consignment/Shipment Inspection by PVoC Agent Appointed Inspector The Inspector shall conduct inspection as per the guidelines and instructions issued by the PVoC Agent. The inspection shall focus on:
Marking
Packaging
Product shelf life (where applicable)
Conformity to packing list/ invoice
Visual product conformity Samples may be drawn and respective packages from which samples drawn marked appropriately by the inspector as and when advised by PVoC Agent for testing. Upon completion of the inspection, the Inspector shall prepare report detailing findings and remarks (recommendation). A copy of the report shall be submitted to the exporter immediately thereafter. Any discrepancy noted during inspection shall be brought immediately to the attention of the Exporter through a Discrepancy Report. NOTE: The PVoC Agent shall inform the Exporter when the products are to be sampled for testing. However, the
conformity decision for the shipment sampled may not be pegged on the test report obtained thereafter. Such test reports may be useful in making conformity decision for subsequent shipments.
Step 3 – Consignment/Shipment Testing Testing shall be confined to essential requirements or parameters of the applicable standard only. Testing shall only be performed on samples drawn by the concerned PVoC Agent in any of the following laboratories:
PVoC Agent’s laboratory
An independent laboratory accredited to ISO/IEC 17025 worldwide.
Any laboratory not accredited to ISO/IEC 17025 or the manufacturer’s laboratory under witnessing by PVoC Agent. (This option is only open in instances where the first two labs cannot be found within the locality)
NOTE: Witness testing shall be performed by qualified personnel familiar with the product and test methods. The
PVoC Agent shall witness testing only in laboratories meeting requirements specified in ISO 9001.
Step 4 – Issuance of the Final Certification Documentation by the PVoC Agent Upon receipt of the inspection report, the PVoC Agent shall take a certification decision and issue certificate (i.e. Certificate of Conformity or Non Conformity Report) within 2 working days of receipt of the reports and the final invoice. NOTE: Exporter may contact the concerned PVoC Agent in order to obtain the Certificate of Conformity (CoC) or to
know certification decision prior to shipment.
GTS-PM-KPV-EIG-DEG-11 Page 7 of 9
KENYA BUREAU OF STANDARDS
PRE-EXPORT VERIFICATION OF CONFORMITY TO
STANDARDS
ISSUED: 01-Feb-15
THE REPUBLIC OF KENYA
EXPORTER AND IMPORTER GUIDELINES
DETAILED EXPORTER AND IMPORTER GUIDELINES
ROUTE C – PRODUCT LICENSING
This Route is open only to manufacturers who can demonstrate existence of a quality management system in their production/ manufacturing process. It involves auditing of such production processes and licensing of products manufactured thereof by authorized PVoC Agent(s) in line with ISO Guide 28. The following products are however not eligible for Licensing under Route C. These are subject to certification under Route A only:
Sugar
Cereals and pulses such as Rice, wheat, beans, Maize etc.
Fertilizer
Animal and Fishery products (fresh and frozen, not further processed)
Dairy products
Fresh horticultural produce
Used or second hand goods. On successful conclusion of this process, the manufacturer will be presented with a Licence for the relevant products valid for a period of one (1) year. Licensed products shall be subject to random physical inspection by authorized PVoC Agent(s) prior to the issuance of a Certificate of Conformity and subsequent shipments of the same. However the PVoC Agent(s) shall carry out limited testing during the licence validity period.
RESPONSIBILITIES Importers Ensure their suppliers are conversant with import quality requirements and that their consignments are accompanied with a Certificate of Conformity (CoC) from the appointed PVoC Agent(s). Exporters Ensure their products or goods meet the regulations and quality requirements of Kenya before shipment by carrying out tests and/or obtaining the necessary certification of Conformity (CoC) from the appointed PVoC Agent(s) for all products subject to the PVoC program. Kenya Bureau of Standards Ensure that only quality goods gain entry into the country as provided for in the Standards Act Cap 496, Laws of Kenya and the Quality Imports Order No. 78 of July, 2005, thereby offering the necessary protection to Kenya’s consumers in safety, health and environmental matters.
OTHER REQUIREMENTS Container Sealing Requirements Wherever feasible, sealing of FCL Containers (Full Container Loads) is required during physical inspection. Exporters are required to give advance notice to the PVoC Office of container stuffing arrangements, so that the date of inspection is scheduled to coincide with the container stuffing. Labeling and Shelf Life Requirements All labeling of packaging of imports shall include English and/or Kiswahili. Packaged goods (e.g. foodstuffs, chemicals, cosmetics, and similar) shall indicate the batch numbers and dates of expiration and/or date of production. All imports with a limited shelf life shall have more than seventy five per cent (75%) shelf life from the date of expected landing in Kenya.
GTS-PM-KPV-EIG-DEG-11 Page 8 of 9
KENYA BUREAU OF STANDARDS
PRE-EXPORT VERIFICATION OF CONFORMITY TO
STANDARDS
ISSUED: 01-Feb-15
THE REPUBLIC OF KENYA
EXPORTER AND IMPORTER GUIDELINES
DETAILED EXPORTER AND IMPORTER GUIDELINES
Counterfeit Products/Goods Importation of any counterfeit goods is not allowed. Where products/goods are established to be counterfeits, no Certificate of Conformity (CoC) shall be issued even if the products/goods meet the relevant specifications (standards). Exporters of suspect counterfeit goods will be expected to provide adequate evidence of the genuineness of their goods before a CoC is issued.
FEES The fees are payable by the Exporter or Manufacturer and payable in advance:
VERIFICATION FEES REGISTRATION AND LICENSING FEES
The applicable Verification Fees depends on the shipment route as detailed below:
Route A 0.50%of FOB value subject to a minimum of USD 250 and a maximum fee of USD 2675.
Route B 0.45%of FOB value subject to a minimum of USD 250 and a maximum fee of USD 2675.
Route C 0.25% of FOB value subject to a minimum of USD 250 and a maximum fee of USD 2675.
Used Vehicles To be advised
Testing Fees Determined on a case by case basis
Container Sealing Fees Determined on a case by case basis (If additional visits/re-inspections are required)
Registration and Licensing Fees
Licensing fees are calculated on a case-by-case basis. Please contact your nearest PVoC Office for further information.
NOTE: Products with common characteristics will be grouped together in determining the Registration / Licence Fees
CONTACT US
INTERTEK GOVERNMENT AND TRADE SERVICES KENYA PVOC LIAISON OFFICE
Academy Place 1-9 Brook Street, Brentwood, Essex CM 14 5NQ, UK Tel: +44 1277 223 400 +44 1277 223 255 Fax: +44 1277 220 127 E-mail: [email protected]
House of Vanguard, 4th Floor, Chiromo Road, Westlands, Nairobi, Kenya Tel: +254 20 4449132 / 3 / 6 / 8155274 Fax:+254 20 4449212 E-mail: [email protected]
GTS-PM-KPV-MIS-FAQ-03
Page 3 of 9
KENYA BUREAU OF STANDARDS
PRE-EXPORT VERIFICATION OF CONFORMITY TO
STANDARDS
ISSUED: 12-Jan-16
THE REPUBLIC OF KENYA
MISCELLANEOUS
FREQUENTLY ASKED QUESTIONS
1.0 PRE-EXPORT VERIFICATION OF CONFORMITY
1.1
What is PVoC?
PVOC is Pre-export verification of conformity to standards. It is a conformity assessment procedure applied at the country of supply/origin to ensure compliance of imported products with applicable Kenya Standards, approved specifications or applicable regulations. Goods meeting the requirements of the relevant Kenya Standards or approved specifications will be issued with Certificates of Conformity (CoCs) as proof of compliance by KEBS appointed inspection agents.
1.2
What are the additional requirements in the new PVOC directive?
The list of goods that are required to undergo inspection in the country of supply has been expanded to cover all imported goods with the exemption of certain products as detailed in section 2.1
1.3
How will KRA use the Certificates of Conformity issued under the PVoC programme to secure revenues?
The Coc shall serve as one of the reference documents in Customs declaration in terms of quality, quantity and value of imported goods. Importers shall be under obligation to comply with the import requirements including furnishing original invoices for goods.
1.4
Will KRA or KEBS draw samples from consignments accompanied with CoCs?
Samples of consignments accompanied with CoC may be drawn as necessary for monitoring purposes.
1.5
Can KEBS and KRA guarantee pre-clearance of cargo accompanied with CoCs so that importers do not incur demurrage charges at the Port?
Pre clearance of goods accompanied with a CoC will be given except where there are reasons to doubt the integrity of the procedure followed with respect to the specific cases or consignment has been targeted for random sampling
1.6
When is the effective implementation date?
Inspection requirement is for all imports whose shipment date is on or later than 1st of December 2015
1.7
What happens to goods already shipped (on high seas) and expected to arrive in Kenya on or after 1st December 2015?
All goods shipped before the 1st December 2015 will be cleared under the previous arrangement
1.8
What is the minimum value threshold for goods subject to PVoC?
There is no minimum values threshold for PVoC .
GTS-PM-KPV-MIS-FAQ-03
Page 4 of 9
KENYA BUREAU OF STANDARDS
PRE-EXPORT VERIFICATION OF CONFORMITY TO
STANDARDS
ISSUED: 12-Jan-16
THE REPUBLIC OF KENYA
MISCELLANEOUS
FREQUENTLY ASKED QUESTIONS
2.0 REGULATED PRODUCTS AND EXEMPTED PRODUCTS
2.1
What are the exempted products?
SN CATEGORY CRITERIA REMARKS
1.
Importers of products regulated by other government agencies. Regulators: DVS, KDB, KEPHIS, PPB, PCPB, CA, KCAA
Proof of quality certification by the regulator(s)/ Import permits etc.
Concerned importers to submit Import permit or any other quality certification documentation to KRA for processing of customs entries/IDF
2.
Registered manufacturers importing raw materials, machinery and spares for own use
Applicant must demonstrate quality track record for the raw materials and the final products as confirmed by KEBS
Proof of transformation of raw material (s) into a completely different product (finished product)
Proof of certification to a quality management system/ or professional practice.
Manufacturers to provide data on their customers e.g. complaints
Proof that the final products are directly linked to the raw materials being imported
Concerned importers to apply to KEBS for registration using form – “Application for Registration of Manufacturers Importing Raw Materials, Machinery and Parts thereof for own use”
3.
Diplomats and diplomatic missions
PRO 1B Completed PRO 1B to be submitted to KRA at the time of importation
4.
Registered assemblers importing CKDs for motor vehicle and motor cycle assembly/ Manufacturing Under Bond (MUB)
Proof of registration as assembler/ MUB
Concerned importers to apply to KEBS for registration using form – “Application for Registration of Manufacturers Importing Raw Materials, Machinery and Parts thereof for own use”
5.
Importers of courier parcels Goods imported under KEBS/CIAK MoU
Goods to be subjected to destination inspection
6.
Importers of printed matter and copyrighted digital materials
Textbooks, periodicals, diaries, labels, Recorded digital media, magnetic media
KRA to administer. KEBS does not have quality standards for copyrighted materials
7.
Importers of goods certified by KEBS under Diamond Mark Scheme
Valid Diamond Mark permit
Concerned importers to apply to KEBS using form – “Application for Registration of Importers of Goods Certified under Diamond Mark of Quality Scheme”
8.
Importers of goods manufactured within East African Community (EAC)
Country of Origin must be an EAC member state
Import Entries for goods from EAC Partner states to be processed by KRA based on Country of supply
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ISSUED: 12-Jan-16
THE REPUBLIC OF KENYA
MISCELLANEOUS
FREQUENTLY ASKED QUESTIONS
9.
Importers of new vehicles
New vehicles must be imported directly from the manufacturer of the brands or the manufacturer’s appointed agent
Clearance to be based on year of manufacture.
10.
Importers of used personal effects
Goods must be pre-owned before shipment
KRA to administer
11.
Importers of vehicles from countries where KEBS does not have a motor vehicle inspection arrangement
Country of exportation must be a country where KEBS does not have a motor vehicle inspection arrangement
Vehicles not from UAE, JAPAN, UK AND SOUTH AFRICA to be subjected to destination inspection
12.
General consumables (stores) imported by International carriers for inflight / ships services
Proof of existence as international carrier
Concerned importers to submit licenses to KRA for processing of their import entries
13.
Re- imports
Submission of re-importation certificate (KRA)
Concerned importers to submit re-importation certificates to KRA at the time of importation at the time of importation
2.2
Are goods imported from EAC member states subject to PVoC?
Goods manufactured in the EAC member states are accepted based on the certification carried out by the respective National Standards Body in the country of origin as provided for under EAC SQMT Act.
For detailed information Refer to Section 2.1 point 8.
2.3
Are raw materials for local manufacturing of finished goods subject to PVoC requirements?
Primary inputs imported by registered manufacturers to be released under a green channel (i.e. No CoC required) subject to proof that the materials are direct inputs to the manufacturing process and the finished products made out of the said raw materials are certified by KEBS.
For detailed information Refer to Section 2.1 point 2.
2.4
Are Complete Knock downs (CKD) motor vehicles and motor bikes imported for local assembly subject to PVoC?
CKD for vehicles imported by registered manufacturers to be released under a green channel (i.e. No CoC required).
For detailed information Refer to Section 2.1 point 4.
2.5
Are manufacturing plants, machinery and parts thereof imported solely for own use subject to PVoC?
Manufacturing plants and industrial spares for own use imported by registered manufacturers to be released under a green channel (i.e. No CoC required).
For detailed information Refer to Section 2.1 point 2.
2.6
Are goods under the value of USD 1000 (CIF) exempt from PVoC?
No, as in number 19 above, there is no minimum values threshold for PVOC. However, courier shipments through JKIA which are currently cleared under the Memorandum of Understanding (MoU) between KEBS and Courier Industry Association of Kenya (CIAK) shall continue to be cleared as specified in the MoU.
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KENYA BUREAU OF STANDARDS
PRE-EXPORT VERIFICATION OF CONFORMITY TO
STANDARDS
ISSUED: 12-Jan-16
THE REPUBLIC OF KENYA
MISCELLANEOUS
FREQUENTLY ASKED QUESTIONS
2.7
Are products, which are meant for donation, covered under PVoC?
In relation to the recent notice of KEBS jointly with KRA from 1st December 2015 onwards all goods imported to
Kenya are subject to Pre-Export Verification of Conformity with the exception of following products stated as per Section 2.1.
2.8
Are finished petroleum products subject to PVoC requirements?
Yes, petroleum products will be subjected to inspection under the PVOC program.
2.9
Are consolidated cargoes subject to PVoC?
Yes. PVoC is required for all goods including consolidated cargo.
2.10
Are used motor vehicle parts subject to PVoC?
Yes, used motor vehicle parts will be subjected to inspection under the PVoC programme.
3.0 ESSENTIAL REQUIREMENTS
3.1
What is the official voltage rate for Kenya?
Official voltage ratings of Kenya is 230 V or a range indication of 220-240V i.e.+/-10% for single phase and 400 V or a range incorporating this voltage i.e. +/- 10% for three phase supply.
3.2
Can a product having a power cord with European plug configuration be certified under PVoC?
No, the shipment should be rejected and non-conformity report should be issued.
3.3
Can electrical products be shipped without the supply cord based on the confirmation that the importer will provide the supply cord (detachable) to the consumers on purchase?
Electrical products exported without the cords are considered as incomplete products. All electrical products that are exported should have a supply cord (detachable/non-detachable) attached to it.
3.4
Can a CoC be issued for products with declared voltage of 220V but which can accommodate a higher range of voltage i.e. 230V?
CoC is not to be issued unless the declared voltage is 230V or a range indication of 220-240V.
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STANDARDS
ISSUED: 12-Jan-16
THE REPUBLIC OF KENYA
MISCELLANEOUS
FREQUENTLY ASKED QUESTIONS
4.0 PENALTIES
4.1
What happens to goods that arrive at the Port of entry without CoCs?
Shipments will be subject to destination inspection at a fee of 15% of the Cost, Insurance and Freight value of the goods as required by the Legal Notice number 78 of 15/07/2005 irrespective of the fact whether the shipments have undergone PVoC process in the Country of Supply or not.
The goods shall be held at the entry point and tested at KEBS testing laboratories (testing charges to be separately paid by the importer for according to the labs fees)
Goods will be released to importer if quality requirements are met.
5.0 REQUEST FOR CERTIFICATE (RFC)
5.1
The exporter/importer details stated in the IDF and RFC are not the same. In such instances, can the Intertek Offices issue the CoC stating the exporter/Importer details as per the RFC?
CoC’s shall only be issued on the basis of the Exporter and Importer details as indicated in the IDF.
5.2
Quantity mentioned on the RFC is less than the quantity mentioned on the IDF. Can the Intertek Offices
The CoC issued should match the quantity mentioned on the IDF. However, in case if it is being shipped as a partial or has a minor difference, then it’s acceptable.
6.0 CERTIFICATE OF CONFORMITY (COC)
6.1
Can the Intertek Offices issue one CoC against two or more IDF’s?
NO. Each IDF should have its own CoC(s)
A CoC and/or its partials can be issued per IDF.
.
6.2
Is it necessary that the Exporter’s information/contact details on the IDF match the details given in the RFC /CoC? Will Customs reject the CoC if the exporter details are not the same in the CoC and on the IDF?
Yes, it is important that the details match because the Customs and KEBS store and update the data of all IDF’s and CoC’s for verification.
7.0 STATEMENT OF REGISTRATION (SOR)
7.1
Can the Intertek Offices accept Statement of Registration (SoR) of other appointed PVoC agents?
Yes, Statement of Registration (SoR) of other appointed PVoC agents should be accepted by Intertek Offices.
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KENYA BUREAU OF STANDARDS
PRE-EXPORT VERIFICATION OF CONFORMITY TO
STANDARDS
ISSUED: 12-Jan-16
THE REPUBLIC OF KENYA
MISCELLANEOUS
FREQUENTLY ASKED QUESTIONS
7.2
Will other appointed PVoC agents accept Intertek Statement of Registration (SoR)?
Yes, Intertek’s SoR’s should be accepted by other appointed PVOC agents.
7.3
Can an Exporter use the same Statement of Registration (SoR) for all their clients?
Yes, the Exporter can use one Statement of Registration (SoR) for all his clients supported by his authorization letter.
8.0 TESTING
8.1
Does KEBS have Standards for ALL goods imported into Kenya?
KEBS have standards for many of the goods that are locally manufactured or imported. However, products not having Kenya Standards will be inspected against the relevant international standards or standards applicable in the country of origin.
8.2
How can a test report be verified if there are no available standards?
In absence of the standards, the test results should be compared against the manufacturer’s declaration / specification / MSDS.
.
8.3
If the complete product is tested in a Laboratory, can the spares parts for that product be certified without the need for test reports?
Yes, if the same manufacturer ships the spare parts then these parts need not be tested.
9.0 INSPECTION AND MARKING
9.1
Can a product be shipped if the marking on the product is not in English or Kiswahili language?
Products, which do not have markings (including Instructions where applicable) in English or Kiswahili, should be rejected.
9.2
Can products be shipped if the country of origin is marked in abbreviated form on the package?
Yes, the products can be shipped provided that it is clear to the consumer that the product was made in XXXX from the manufacturer's address details. Exporters/Manufacturers should be advised to use the full name of the Country for the Country of Origin in their subsequent shipments or in a reasonable time frame so that the Country of Origin is clear. Well known abbreviated forms such as USA, UK, UAE…can be accepted without any restrictions.
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STANDARDS
ISSUED: 12-Jan-16
THE REPUBLIC OF KENYA
MISCELLANEOUS
FREQUENTLY ASKED QUESTIONS
10.0 OTHERS
10.1
Are goods certified by KEBS under the Diamond Mark scheme still subject to PVoC?
Diamond Mark Certification serves the same objectives as the PVOC program. Goods certified under the Diamond mark will therefore be cleared on the basis of a valid Diamond Mark Permit
For detailed information Refer to Section 2.1 point 7.
10.2
Are goods imported under Duty remission schemes e.g. MUB, EPZ, subject to PVoC?
Yes, these goods will be subjected to inspection under the PVoC program.
10.3
Is ISM still mandatory for finished products intended for sale in Kenya in light of the expanded scope of PVoC?
Yes ISM is mandatory for all imported products that are intended for sale in Kenya.
10.4
Are Authorized Economic Operators (AEOs) exempted for PVoC?
No. AEOs are not exempted from PVoC but will be accorded expedited clearance by KRA under the Green Channel.
10.5
Can KRA and KEBS merger Excise stamp and ISM?
The different marks serve different purposes. The feasibility of the proposal will be studied by the two organizations.
10.6
Should the Exporter provide the HS codes for their products?
Yes, the exporter should provide the HS codes for all products included in the Shipment
Sources: ITC calculations based on UN COMTRADE statistics.
Imported value 2015 (USD '000)
Trade balance 2015 (USD '000)
Annual value growth 2011-15
(%, p.a.)
TOTAL All products 16,982,127 (12,718,150) 11 China India USA
'2710 Petroleum oils, not crude 2,167,954 (1,768,436) 19 India Malaysia Netherlands
'8703 Cars (incl. station wagon) 518,905 (517,329) 13 Japan UK Germany
'3004 Medicament mixtures (not 3002, 3005, 3006), put in dosage 440,765 (406,876) 5 India UK Switzerland
'8704 Trucks, motor vehicles for the transport of goods 414,868 (411,740) 13 Japan South Africa India
'8517 Electric app for line telephony,incl curr line system 395,981 (381,771) -1 China HongKong UK
'7208 Flat-rolld products of iron/non-al/s wdth>/=600mm,hr,not clad 288,781 (287,613) -6 South Africa Japan India
'1001 Wheat and meslin 274,779 (274,631) 1 Russia Germany Poland
'8701 Tractors (other than tractors of heading no 87.09) 261,138 (260,981) 15 UK Germany Korea
'6204 Women's suits, jackets,dresses skirts etc&shorts 255,254 (161,554) 125 China India Thailand
'6402 Footwear nes, outer soles and uppers of rubber or plastics 211,254 (205,010) 30 China India USA
'3901 Polymers of ethylene, in primary forms 183,559 (182,863) 2 KSA Qatar Thailand
'9403 Other furniture and parts thereof 151,687 (149,246) 36 China Italy Malaysia
'6104 Women's suits,dresses,skirt etc&short, knit/croch 151,315 (87,247) 54 China South Africa Germany
'6309 Worn clothing and articles 147,044 (146,740) 12 China UK Canada
'5407 Woven fabrics of synth. filam yarn (incl. hd no 54.04) 136,728 (136,144) 7 China India Thailand
'4011 New pneumatic tires, of rubber 133,956 (130,676) -3 China India South Africa
'8504 Electric transformer,static converter (for example rectifiers) 125,656 (124,811) 15 China India Hungary
'6203 Men's suits, jackets, trousers etc & shorts 119,764 (35,225) 71 China India South Africa
'1701 Cane or beet sugar and chemically pure sucrose, in solid form 117,882 (117,709) -14 India KSA Mauritius
'7308 Structures (rods,angle, plates) of iron & steel nes 111,891 (108,286) 7 China India Spain
'8429 Self-propelld bulldozer, angledozer, grader, excavator,etc 110,500 (110,384) 17 China India Korea
'8708 Parts & access of motor vehicles 108,837 (107,382) 10 China UK India
Top products at 4 digits HS level imported by KENYA in 2015 and Exporting Countries
Code Product label
Trade Indicators
Top Exporters to KENYA for Selected Products
Sources: ITC calculations based on UN COMTRADE statistics.
Imported value 2015 (USD '000)
Trade balance 2015 (USD '000)
Annual value growth 2011-15
(%, p.a.)
Top products at 4 digits HS level imported by KENYA in 2015 and Exporting Countries
Code Product label
Trade Indicators
Top Exporters to KENYA for Selected Products
'3808 Insecticides, fungicides, herbicides packaged for retail sale 108,665 (98,196) 8 China France India
'3902 Polymers of propylene or of other olefins, in primary forms 103,697 (103,645) 13 KSA South Africa Korea
'1511 Palm oil & its fraction 103,280 (99,594) 34 Malaysia South Africa Indonesia
'8471 Automatic data processing machines;optical reader, etc 101,575 (99,590) -10 China HongKong Czech Rep.
'8711 Motorcycles, side-cars 98,251 (98,092) 5 China India Japan
'4202Trunks,suit-cases,camera cases,handbags etc,of leather,plas,tex etc 97,293 (95,163) 18 China India USA
'9405 Lamps & lighting fittings nes; signs, nameplates illuminated 96,961 (94,565) 53 China Malaysia UK
'8544 Insulated wire/cable 94,736 (91,197) 17 China India Netherlands
'7228 Bars&rods,other alloy steel; hollow drill bars, etc. 94,672 (94,406) 96 China India South Africa
'3002Human & animal blood; antisera, vaccines, toxins, micro-organism cultu 93,933 (90,125) 1 India Belgium China
'5208Woven cotton fabrics, 85% or more cotton, weight less than 200 g/m2 87,907 (86,983) 11 China India Taipei
'0902 Tea 86,904 353,379 0 Uganda Burundi India
'3907Polyacetal,o polyether,epoxide resin,polycarbonate,etc,in primary form 85,899 (83,595) 2 China India Netherlands
'0713 Dried vegetables, shelled 82,746 (42,696) 4 Uganda Ethiopia USA
'8502 Electric generating sets and rotary converters 80,835 (80,488) 6 China UK Italy
'6908 Glazed ceram flags&paving,hearth/wall tiles; mosaic cube 77,072 (77,002) 27 China India Spain
'8528 Television receivers (incl video monitors & video projectors) 76,373 (75,955) 36 China Korea Uganda
'6103 Men's suits,jackets,trousers etc&shorts, knit/croch 74,809 (51,986) 46 China Thailand South Africa
'4818 Toilet paper, handkerchiefs, tissues, napkins, table cloths, diapers, 69,634 (68,395) 43 China Turkey Hungary
'8513 Portable electric lamp designd to functn by batt/magn. 69,276 (69,071) 33 China HongKong Thailand
'3926 Article of plastic nes. 69,204 (67,642) 14 China India Germany
Sources: ITC calculations based on UN COMTRADE statistics.
Imported value 2015 (USD '000)
Trade balance 2015 (USD '000)
Annual value growth 2011-15
(%, p.a.)
Top products at 4 digits HS level imported by KENYA in 2015 and Exporting Countries
Code Product label
Trade Indicators
Top Exporters to KENYA for Selected Products
'8426 Derricks; cranes; straddle carriers,&works trucks fitted with a crane 66,605 (66,459) 17 Ireland Japan China
'8479 Machines&mech appl having indiv functions, nes 66,454 (66,270) 11 China India Germany
'8536Electrical app for switchg (ex fuse,switche,etc) not exceedg 1000 volt 65,667 (65,191) 28 China India USA
'7210Flat-rolled prod of iron or non-al/s wd>/=600mm,clad, plated or coated 65,058 (23,735) -16 China India Japan
'8714 Parts and accessories of motorcycles & cycles 63,702 (63,338) 47 China India South Africa
'8803 Aircraft parts 62,670 (60,029) 37 Netherlands France UK
'9018Electro-medical apparatus (electro-cardiographs, infra-red ray app, sy 62,063 (57,045) 5 China HongKong Germany
'3904Polymers of vinyl chloride/other halogenated olefins, in primary forms 61,288 (60,847) 4 China Taipei Thailand
'8537 Board & panels, equipped with two/more switches, fuses 60,977 (60,161) 18 China India Germany
'8474Machinery for sorting/screening/washg;agglomeratg/shapg mineral produc 60,231 (58,472) 0 China India Italy
'9028 Gas/ liquid/ electricity supply/production meter 57,903 (57,742) 19 China South Africa UK
'4802 Uncoated paper for writing, printing etc. 57,253 (57,235) -3 India UK China
'7207 Semi-finished products of iron or nonalloy steel 56,299 (56,298) -5 Russia South Africa Brazil
'6110 Jerseys, pullovers, cardigans, etc, knitted or crocheted 54,434 (3,837) 71 China Turkey South Africa
'6006 Other knitted or crocheted fabrics 53,639 (53,447) 9 China Taipei HongKong
'8507 Electric accumulator 52,287 (48,758) 17 China India Thailand
'1005 Maize (corn) 52,085 (51,170) -11 Uganda Zambia South Africa
'8430 Moving/grading/scraping/boring machinery for earth 51,597 (51,461) 5 Australia Uganda China
'8413 Pumps for liquids; liquid elevators 50,999 (49,399) 6 China India Italy
'3920 Other plates, sheets, film, foil, tape, strip of plastics etc. 50,823 (39,608) 8 China India Finland
'8302 Base metal mountings, fttgs & sim art suitable for furn, doors, etc 50,092 (49,883) 39 China India South Africa
Sources: ITC calculations based on UN COMTRADE statistics.
Imported value 2015 (USD '000)
Trade balance 2015 (USD '000)
Annual value growth 2011-15
(%, p.a.)
Top products at 4 digits HS level imported by KENYA in 2015 and Exporting Countries
Code Product label
Trade Indicators
Top Exporters to KENYA for Selected Products
'7227 Bars&rods,hot-rolled,in irregularly wound coils,of other alloy steel 49,712 (49,712) 150 China Japan Austria
'8527 Reception app for radio-telephony/radio-broadcastg 49,693 (49,679) 49 China South Africa New Zealand
'8518Microphones&stand;loudspeaker;headphone/earphone;sound amplifier set 49,599 (49,541) 33 China India South Africa
'9401 Seat (o/t dentists' & barbers' chairs, etc), &part thereof 49,234 (49,003) 24 China Malaysia Korea
'7302 Rrail, crossing piece, iron/steel 48,971 (48,821) 125 China India UK
'8481 Tap,cock,valve for pipe,tank for the like,incl pressure reducing valve 48,854 (48,317) 13 China UK India
'4804Uncoated kraft paper&paperboard, in rolls/sheets not of hd 48.02/48.03 48,793 (47,299) 6 USA Sweden Netherlands
'7614 Aluminum stranded wire,cables,plaited bands, not elec insulated 48,700 (46,518) -8 China India Mozambique
'8301Padlocks/lock;clasp incorp lock;key for the foregoing art,of base met 48,567 (48,520) 23 China Italy India
'8716 Trailers&semi-trailers;other vehicles not mechanically propelled 47,733 (38,590) 7 China Brazil UK
'8428Lifting/handling/loading/unloadg machinery (excl. lift/escalator/conve 47,141 (46,843) 23 China USA India
'8411 Turbo-jets, turbo-propellers and other gas turbines 47,114 (46,147) -5 UK Canada Poland
'3302 Odoriferous mixtures as raw materials for industry 46,958 (46,734) 9 Ireland Germany Switzerland
'3923 Plastic packing goods or closures stoppers, lids, caps, closures, plas 46,582 (17,230) 21 China Uganda India
'8443 Printing machinery; machines for uses ancillary to printing 46,017 (45,229) -9 Germany China Italy
'8418 Refrigerator, freezer, etc 45,967 (45,642) 9 China India Thailand
'2401 Tobacco unmanufactured; tobacco refuse 45,315 (31,493) 8 Uganda Turkey India
'8477 Machinery for wrkg rbr/plas/ for the mfr of prod from these material 44,388 (44,247) 3 China India Taipei
'8422 Dish washing machines; machinery for aerating bottles 43,831 (41,271) -1 Italy CHina Germany
Sources: ITC calculations based on UN COMTRADE statistics.
Imported value 2015 (USD '000)
Trade balance 2015 (USD '000)
Annual value growth 2011-15
(%, p.a.)
Top products at 4 digits HS level imported by KENYA in 2015 and Exporting Countries
Code Product label
Trade Indicators
Top Exporters to KENYA for Selected Products
'8421 Centrifuges, incl centrifugal dryers; filtering/purifying machinery 43,697 (43,153) 9 China India Germany
'8438 Machinery, nes, for the ind preparation or mfr of food or drink 43,623 (42,437) -2 India Germany Netherlands
'9406 Prefabricated buildings 43,358 (40,129) 18 China India Italy
'3105 Mixtures of..nitrogen, phosphorous or potassium fertilizers 42,594 (34,431) -29 China Russia Romania
'2523Cements, portland, aluminous, slag, supersulfate & similar hydraulic c 42,472 (2,266) 15 China Japan Ethiopia
'2106 Food preparations, nes 42,007 (37,255) -4 France USA Germany
'8431 Machinery part (hd 84.25 to 84.30) 41,478 (39,904) -2 China Korea USA
'1007 Grain sorghum 40,786 (40,310) 17 USA India Uganda
'0402 Milk and cream, concentrated or sweetened 40,216 (40,017) 15 Uganda Oman Malaysia
'8705 Specl purp motor vehicles (fire fight veh,crane lorry) 40,201 (39,823) -5 China Korea India
'8539 Electric filament or discharge lamps 40,106 (39,988) 59 China India Germany
'9022Apparatus based on the use of X-rays/of alpha, beta/gamma radiations 39,528 (39,275) 29 China Germany USA
'7305 Tubes&pipe nes, ext diam >406.4mm,of iron &steel 39,145 (39,070) 64 China India Singapore
'3102 Mineral or chemical fertilizers, nitrogenous 38,420 (37,915) 4 KSA China Italy
'8506 Primary cells and primary batteries 37,799 (37,575) -1 China Singapore Belgium
'7326 Articles of iron or steel nes 37,638 (35,240) 7 China UK India
'8419Machinery,plant/lab,involving a change of temp ex heating,cooking,etc 36,113 (35,150) 6 India China Germany
'3822 Composite diagnostic or laboratory reagents, nes 35,359 (35,035) 14 Germany UK France
'3924 Tableware, kitchenware, toiletery articles, of plastic 34,427 (28,598) 45 China India Taipei
Kenya Doing Business 2016
THE BUSINESS ENVIRONMENTThe absolute values of the indicators tell another part of
the story (table 1.1). The indicators, on their own or in
comparison with the indicators of a good practice
economy or those of comparator economies in the
region, may reveal bottlenecks reflected in large numbers
of procedures, long delays or high costs. Or they may
reveal unexpected strengths in an area of business
regulation—such as a regulatory process that can be
completed with a small number of procedures in a few
days and at a low cost. Comparison of the economy’s
indicators today with those in the previous year may
show where substantial bottlenecks persist—and where
they are diminishing.
Table 1.1 Summary of Doing Business indicators for Kenya
Indicator
Ken
ya D
B2
01
6
Ken
ya D
B2
01
5
Bo
tsw
an
a D
B2
01
6
Mau
riti
us
DB
20
16
Nam
ibia
DB
20
16
Rw
an
da D
B2
01
6
Tan
zan
ia D
B2
01
6
Un
ited
Kin
gd
om
DB
20
16
Best
perf
orm
er
glo
ball
y
DB
20
16
Starting a Business
(rank) 151 148 143 37 164 111 129 17 New Zealand (1)
Starting a Business (DTF
Score) 74.47 72.55 76.21 92.49 68.92 83.05 79.58 94.57 New Zealand (99.96)
Procedures (number) 11.0 11.0 9.0 5.0 10.0 7.0 9.0 4.0 New Zealand (1.00)*
Time (days) 26.0 30.0 48.0 6.0 66.0 5.5 26.0 4.5 New Zealand (0.50)
Cost (% of income per
capita) 35.3 42.7 0.7 2.0 11.1 55.0 18.0 0.1 Slovenia (0.00)
Paid-in min. capital (%
of income per capita) 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 105 Economies (0.00)*
Dealing with
Construction Permits
(rank)
149 152 97 35 66 37 126 23 Singapore (1)
Dealing with
Construction Permits
(DTF Score)
59.37 57.34 67.95 76.51 72.24 76.34 62.85 78.92 Singapore (92.97)
Procedures (number) 15.0 15.0 19.0 15.0 10.0 11.0 18.0 9.0 5 Economies (7.00)*
Kenya Doing Business 2016
Indicator
Ken
ya D
B2
01
6
Ken
ya D
B2
01
5
Bo
tsw
an
a D
B2
01
6
Mau
riti
us
DB
20
16
Nam
ibia
DB
20
16
Rw
an
da D
B2
01
6
Tan
zan
ia D
B2
01
6
Un
ited
Kin
gd
om
DB
20
16
Best
perf
orm
er
glo
ball
y
DB
20
16
Time (days) 146.0 131.0 110.0 156.0 137.0 77.0 205.0 105.0 Singapore (26.00)
Cost (% of warehouse
value) 6.9 9.4 0.3 0.6 0.5 5.9 5.7 1.1 Qatar (0.00)
Building quality control
index (0-15) 7.0 7.0 8.0 13.0 6.5 11.0 12.5 9.0 New Zealand (15.00)
Getting Electricity
(rank) 127 141 122 41 76 118 83 15 Korea, Rep. (1)
Getting Electricity (DTF
Score) 58.57 53.91 59.34 81.93 71.89 60.04 70.29 89.12 Korea, Rep. (99.88)
Procedures (number) 4.0 4.0 5.0 4.0 6.0 4.0 4.0 4.0 14 Economies (3.00)*
Time (days) 110.0 145.0 77.0 81.0 37.0 34.0 109.0 79.0 Korea, Rep. (18.00)*
Cost (% of income per
capita) 732.3 1,011.4 297.6 260.0 338.7 2,932.0 1,021.0 26.7 Japan (0.00)
Reliability of supply and
transparency of tariff
index (0-8)
0.0 0.0 0.0 6.0 4.0 0.0 4.0 8.0 18 Economies (8.00)*
Registering Property
(rank) 115 121 70 99 174 12 133 45 New Zealand (1)
Registering Property
(DTF Score) 56.63 54.35 67.25 61.18 38.61 87.75 51.37 74.5 New Zealand (94.46)
Procedures (number) 9.0 9.0 4.0 4.0 8.0 3.0 8.0 6.0 4 Economies (1.00)*
Time (days) 61.0 72.0 12.0 14.0 52.0 32.0 67.0 21.5 3 Economies (1.00)*
Cost (% of property
value) 4.2 4.3 5.1 10.6 13.7 0.1 4.4 4.6 Saudi Arabia (0.00)
Quality of the land
administration index (0-
30)
15.0 14.0 10.0 14.0 8.5 25.0 7.5 24.0 3 Economies (28.50)*
Kenya Doing Business 2016
Indicator
Ken
ya D
B2
01
6
Ken
ya D
B2
01
5
Bo
tsw
an
a D
B2
01
6
Mau
riti
us
DB
20
16
Nam
ibia
DB
20
16
Rw
an
da D
B2
01
6
Tan
zan
ia D
B2
01
6
Un
ited
Kin
gd
om
DB
20
16
Best
perf
orm
er
glo
ball
y
DB
20
16
Getting Credit (rank) 28 118 70 42 59 2 152 19 New Zealand (1)
Getting Credit (DTF
Score) 70 35 55 65 60 95 25 75 New Zealand (100)
Strength of legal rights
index (0-12) 7.0 7.0 5.0 6.0 5.0 11.0 5.0 7.0 3 Economies (12.00)*
Depth of credit
information index (0-8) 7.0 0.0 6.0 7.0 7.0 8.0 0.0 8.0 26 Economies (8.00)*
Credit registry coverage
(% of adults) 0.0 0.0 0.0 82.6 0.0 5.4 0.0 0.0 Portugal (100.00)
Credit bureau coverage
(% of adults) 14.3 4.9 51.1 0.0 62.8 18.8 5.0 100.0
22 Economies
(100.00)*
Protecting Minority
Investors (rank) 115 114 81 29 66 88 122 4 Singapore (1)*
Protecting Minority
Investors (DTF Score) 46.67 46.67 55 65 56.67 53.33 45 78.33 Singapore (83.33)*
Strength of minority
investor protection
index (0-10)
4.7 4.7 5.5 6.5 5.7 5.3 4.5 7.8 3 Economies (8.30)*
Extent of conflict of
interest regulation
index (0-10)
4.7 4.7 6.0 7.7 5.7 6.3 5.3 8.3 Singapore (9.30)*
Extent of shareholder
governance index (0-
10)
4.7 4.7 5.0 5.3 5.7 4.3 3.7 7.3 4 Economies (8.00)*
Paying Taxes (rank) 101 99 71 13 93 48 150 15 United Arab Emirates
(1)*
Paying Taxes (DTF
Score) 71.96 71.96 77.47 91.92 73.63 81.48 59.25 91.34
United Arab Emirates
(99.44)*
Payments (number per 30.0 30.0 34.0 8.0 27.0 25.0 49.0 8.0 Hong Kong SAR,
Kenya Doing Business 2016
Indicator
Ken
ya D
B2
01
6
Ken
ya D
B2
01
5
Bo
tsw
an
a D
B2
01
6
Mau
riti
us
DB
20
16
Nam
ibia
DB
20
16
Rw
an
da D
B2
01
6
Tan
zan
ia D
B2
01
6
Un
ited
Kin
gd
om
DB
20
16
Best
perf
orm
er
glo
ball
y
DB
20
16
year) China (3.00)*
Time (hours per year) 201.5 201.5 152.0 152.0 302.0 109.0 179.0 110.0 Luxembourg (55.00)
Total tax rate (% of
profit) 37.1 37.1 25.1 22.4 21.3 33.0 43.9 32.0 Ireland (25.90)
Trading Across Borders
(rank) 131 131 51 66 118 156 180 38 Denmark (1)*
Trading across Borders
(DTF Score) 57.83 57.83 85.93 80.05 61.47 45.17 20.21 91.4 Denmark (100)*
Time to export: Border
compliance (hours) 21 21 8 48 120 97 96 24 15 Economies (0.00)*
Cost to export: Border
compliance (USD) 143 143 317 269 745 183 1,160 280 18 Economies (0.00)*
Time to export:
Documentary
compliance (hours)
19 19 24 9 90 42 96 4 Jordan (0.00)
Cost to export:
Documentary
compliance (USD)
191 191 179 128 348 110 275 25 20 Economies (0.00)*
Time to import: Border
compliance (hours) 180 180 4 48 6 282 402 8 19 Economies (0.00)*
Cost to import: Border
compliance (USD) 908 908 98 294 145 680 1,350 205 28 Economies (0.00)*
Time to import:
Documentary
compliance (hours)
84 84 3 9 3 290 240 2 21 Economies (1.00)*
Cost to import:
Documentary
compliance (USD)
550 550 67 166 63 366 375 0 30 Economies (0.00)*
Enforcing Contracts 102 102 128 27 103 127 64 33 Singapore (1)
Kenya Doing Business 2016
Indicator
Ken
ya D
B2
01
6
Ken
ya D
B2
01
5
Bo
tsw
an
a D
B2
01
6
Mau
riti
us
DB
20
16
Nam
ibia
DB
20
16
Rw
an
da D
B2
01
6
Tan
zan
ia D
B2
01
6
Un
ited
Kin
gd
om
DB
20
16
Best
perf
orm
er
glo
ball
y
DB
20
16
(rank)
Enforcing Contracts
(DTF Score) 56.25 56.25 50.95 70.5 56.03 51.21 61.66 69.36 Singapore (84.91)
Time (days) 465.0 465.0 625.0 519.0 460.0 230.0 515.0 437.0 Singapore (150.00)
Cost (% of claim) 47.2 47.2 39.8 25.0 35.8 82.7 14.3 43.9 Iceland (9.00)
Quality of judicial
processes index (0-18) 9.0 9.0 7.0 13.0 6.5 10.0 6.0 15.0 3 Economies (15.50)*
Resolving Insolvency
(rank) 144 145 56 39 97 72 99 13 Finland (1)
Resolving Insolvency
(DTF Score) 30.64 30.19 54.66 65.94 42.22 47.82 41.01 82.04 Finland (93.81)
Recovery rate (cents on
the dollar) 27.9 27.1 63.8 67.4 34.9 19.2 21.0 88.6 Japan (92.90)
Time (years) 4.5 4.5 1.7 1.7 2.5 2.5 3.0 1.0 Ireland (0.40)
Cost (% of estate) 22.0 22.0 18.0 14.5 14.5 29.0 22.0 6.0 Norway (1.00)
Outcome (0 as
piecemeal sale and 1 as
going concern)
1 1 1 1 0 0 0 1
Strength of insolvency
framework index (0-16) 5.0 5.0 6.5 9.5 7.5 12.0 9.5 11.0 4 Economies (15.00)*
Source: Doing Business database.
Note: DB2015 rankings shown are not last year’s published rankings but comparable rankings for DB2015 that capture the effects of such
factors as data revisions and changes to the methodology. The global best performer on time for paying taxes is defined as the lowest
time recorded among all economies in the DB2016 sample that levy the 3 major taxes: profit tax, labor taxes and mandatory
contributions, and VAT or sales tax. If an economy has no laws or regulations covering a specific area—for example, insolvency—it
receives a “no practice” mark. Similarly, an economy receives a “no practice” mark if regulation exists but is never used in practice or if a
competing regulation prohibits such practice. Either way, a “no practice” mark puts the economy at the bottom of the ranking on the
relevant indicator. * Two or more economies share the top ranking on this indicator. A number shown in place of an economy’s name
indicates the number of economies that share the top ranking on the indicator. For a list of these economies, see the Doing Business
website (http://www.doingbusiness.org).