KEPSA joined the National Trade Facilitation Committee (NTFC) visit to the Lunga-Lunga One Stop Border Post (OBSP) on 4th – 6th October 2022. The NTFC visit Lunga-Lunga was to enable the NTFC membership to familiarize itself with the operations at the OSBP and monitor the status of implementation of the World Trade Organization (WTO) Trade Facilitation Agreement (FTA); "Pursuant to gazette notice No.7319 of 2016 establishing the NTFC, one of the Committee's mandates is to implement and monitor the status of implementation of the WTO TFA as ratified by the Republic of Kenya in 2015".

The NTFC is Chaired by the Principle Secretary for the State Department for Trade and Enterprise Development (SDT&ED) in the Ministry of Industrialization, Trade and Enterprise Development and Co-Chaired by KEPSA and brings together all government agencies bestowed with the mandate to facilitate trade together with the private sector to periodically propose trade facilitation reports to undertaken in order to comply and implement the WTO TFA.

During the visit, the NTFC members sought the following:

• An account of the concerns, needs, and views of all relevant Partner Government Agencies (PGAs) and private sector organizations in the implementation of the TFA.
• Level of understanding of WTO TFA, its implications, and benefits among public and private sector stakeholders and the general public by the PGAs.
• Progress made in complying with measures outlined in the TFA as well as profiling requirements for those that are not yet implemented at the OSBP.
• Understanding of the measures being implemented at the OSBP and whether they are consistently applied in accordance with the TFA.
• Establish the level of automation by the PGAs at the OSBP.
• Assess human capacity and equipment that complements service delivery at the point of entry.
• Establish awareness level and challenges of key stakeholders and Micro Small Medium Enterprises (MSMEs) on requirements of TF Measures and identify areas for interventions.
• Assess commodity flows and infrastructure facilities at the OSBP

An account of the field visit - 5^th October 2022

The 2nd day of the visit was dedicated to visiting the OSBP station, where members were welcomed by the station manager and held a meeting with the border officials. The border agencies present were KEBS, AFA, KEPHIS, PHS, DVS, KFS, and Customs.

SDT &ED while delivering its remarks from the chair of the NTFC Principal Secretary, Amb. Johnson Weru took note that:

The mandate of the NTFC is to monitor the implementation of the WTO Trade Facilitation Agreement (TFA) in the country which is hinged on the four fundamental principles underlying the TFA which are transparency within government, simplification, harmonization, and standardization.

The visit is a learning experience for the NTFC members and not policing the officials of the PGAs at the border. Rather the visit is critical in informing current and future interventions by the NTFC, PGAs, as well donor partners.

The expected output of the visit will be a comprehensive report on the status of operations at the OSBP including the infrastructure facilities, human resource capacity, the status of implementation of the TFA measures, profiling of the emerging challenges and operational needs that deter the seamless flow of goods.

Lunga- Lunga OSBP station manager apprised members of the concept and operations of the OSBP with regard to the Lunga-Lunga border, Trade statistics, benefits of the OSBP, and the challenges experienced at the border.

Members were taken through a detailed presentation that highlighted the following:

OSBP is a border post that combines two stops for national border control processing into one and has border control functions share space for exiting one country and entering another.

The Lunga-Lunga OSBP is a border station between Kenya and Tanzania, with KRA and Tanzania Revenue Authority (TRA) as lead agencies. It is the 2nd busiest border between Kenya and Tanzania after Namanga.

Its construction was supported by development partners Trade Mark East Africa (TMEA) and Japan International Cooperation Agency (JICA). After the commencement of operation at the OSBP, the estimated average time for cargo clearance reduced from 48 hours to less than 8 hours, and revenue grew by 51% in the 2021/2022 financial year despite the challenges that came with the Covid-19 pandemic. However, the Lunga-Lunga OSBP has not been commissioned but plans are underway. This is being done in close collaboration with the EAC secretariat.

The cargo clearance process runs from 6 am to 8 pm Monday to Sunday (time entry to OSBP is allowed) with the last physical release set at 10 pm. For human traffic and small cars, the operation is 24 hours. At the OSBP, the passengers, cargo, and vehicles stop once to process border-crossing formalities. These border formalities are carried out in a single clearance hall, and cargo inspection is done jointly by interested border agencies from both partner states.

Before the establishment of the OSBP, both Kenya and Tanzania were undertaking clearance and verification separately for both imports and exports and Kenya's clearance centre was around 5kms from the border leaving the distance as unmanned land. But after the operations of the OSBP started, it is now located at the border and brought a number of benefits to the local community.

Some of these benefits include faster clearance of goods and cargo, better organization, improved security, better facilities and infrastructure, improved multi-agency cooperation, and facilitation of small-scale cross-border traders through simplified procedures for low-value goods

In order for the OSBP to operate smoothly and facilitate trade, there are several enabling tools that ensure its implementation and full operation. This includes;

• The East African Community One Stop Border Posts Act, 2016.
• Physical infrastructure
• Political goodwill
• Constructive partnerships with the private sector.
• Border community collaboration.
• Joint border meetings.
• County Commissioner service delivery meetings.
• Sensitization through stakeholders' meeting

The key PGAs present at the border include KRA, Immigration, KEBS, KEPHIS, Port Health, Veterinary Department, Kenya Fisheries Services, Anti-counterfeit Authority, and Agriculture and Food Authority.

A number of national security agencies which are important for border security are also present at the border. These agencies include NPS, DCI, NIS, KFS, KWS, and BPU.

Private sector member organizations such as KIFWA and Cross Border Traders Association (CBTA) are also present at the border. However, two key PGAs are missing in the border despite being allocated office space and counters. These are Pest Control Products Board (PCPB) and Kenya Nuclear Regulatory Authority (KNRA).

The management of the border is led by Border Management Committee (BMC) chaired by KRA and comprises all PGAs and security agencies and other law enforcement agencies that operate within the border. The BMC coordinates OSBP activities and it meets monthly and on a need basis.

The PGAs hold stakeholders' meetings with cross-border traders on a quarterly basis. In order to handle emerging issues at the OSBP, Joint Border Committee involving Kenya and Tanzania conducts meetings on a quarterly basis. Multi-agency border patrol meetings are also done monthly with rotating lead agencies and joint inspections by all interested parties.

In the trade relations between Kenya and Tanzania, Tanzania is a key destination of Kenyan export goods within East Africa. The key export goods from Kenya to Tanzania that pass through the border are iodized salt, multi-purpose soap, pre-painted steel coils/plain sheets, sodium silicate, and farm produce such mangoes and coconuts on a seasonal basis among others. Whereas the main imports from Tanzania to Kenya through the border include rough-sawn timber, soft drinks, ceramic tiles, tea, petroleum jelly, steel coils, quick lime, and farm produce such as dry maize, fresh oranges, and fresh tomatoes among others.

Recently, however, there has been a sharp increase in the import of coal from Tanzania by cement manufacturing companies in Kenya.

At the border, cargo is categorized as either imported goods coming into Kenya or exported goods leaving Kenya to Tanzania. The imports are cleared under 1. C17B (customs entry) whereby the clearing agent lodges an entry into the ICMS system, taxes assessed and paid before presenting entry and the goods for verification and subsequent clearance.

The PGAs at the border undertake the clearance of goods through the KENTRADE TFP system and thereafter customs do the final release and exit. In case of downtime in the KENTRADE portal, the PGAs undertake joint manual clearance jointly in order to ensure faster clearance of cargo. For goods whose FOB value is below USD 2,000, they are assessed directly at the border, and taxes are paid at the entry point and cleared using the Simplified Certificate of Origin.

The OSBP takes the interest of the small-scale traders at the OSBP by clearing them using the custom simplified trade regime, involvement and participation in stakeholders' meetings, and continuous sensitization through stakeholders' meetings

During the Covid-19 period, the number of persons crossing through the border significantly reduced but the number of trucks/goods was not significantly affected. Since April 2022, there has been a sharp increase of trucks entering Kenya from Tanzania mostly transporting coal. There is an average of 1,500 trucks entering Kenya from Tanzania through the border per month and an average of 500 per entering Tanzania through the border.

KEPSA, while delivering the closing remarks as the Co-Chairs of the NTFC, thanked KRA Station Manager for the continued support to the cross-border traders alluding to the reforms they have undertaken at the OSBP. KEPSA reassured the PGAs of their support in whatever areas necessary to make it easy, faster and less costly to use the OSBP.

Field Visit - 6^th October 2022

The 3rd day of the visit was dedicated to a sight visit of the agencies operating at the OSBP. The committee visited Port Health Services, Kenya Bureau of Standards, Kenya Plant Health Inspectorate Services, Customs, and the National Police Service.

Each of these agencies enlightened the committee on their roles at the border and their involvement in the clearance of passengers and goods. The members also visited the Immigration Department but were not able to have an audience with them since they had other official engagements

In addition to the agencies, members visited the inspection and verification area as well as the holding and quarantine rooms. A lactating room for mothers has been set aside and is waiting to be furnished in order to fully be operational.

4.0 Key issues

Some of the key issues as noted and addressed were:

1. In regard to sampling and testing of goods, the agencies reported that they work as a multiagency team by undertaking joint verifications of all trucks entering Kenya through the border. KEBS and Port health stated that they have laboratories for testing within the OSBP while KEPHIS usually sends samples to the regional laboratory in Mombasa.
2. In the procedure for appeal or review on rejected consignments, an exporter is allowed to appeal in case of a dispute and can be granted a second test but at a cost. KEBS can accept results from any accredited laboratory but Port Health Services only accepts results from the Government Chemist or National Public Health Laboratory.
3. For the small-scale traders who cross the border with smaller quantities of goods and without documentation, the agencies stated that they allow the goods to enter but only require the traders to produce a Certificate of Origin (CoC) from the Tanzania Revenue Authority which confirms that the goods actually originated from Tanzania.
4. The recognition of Authorized Economic Operators (AEO) which is a preferential clearing program that allows trusted clients to enjoy preferential facilitation when clearing, the agencies reported that the program only works for the customs department. There is a need to incorporate other agencies in the AEO program in order to facilitate trade as well as reduce cost and time at the point of service delivery.
5. In regard to the provision of advance rulings and adoption of pre-arrival processing, the agencies reported that there are procedures for application and their use, but are only issued at the headquarters.
6. The rejected goods by any PGA are kept in the KRA warehouse and the exporters are allowed to re-export, failure to which, the PGAs can destroy small consignments but require approval of the courts for large consignments.
7. There are no live animals that are traded through the OSBP. This is due to historical factors of the same local community on both sides making it difficult to control the movement of livestock. They are taken across the porous border for grazing and trading.

5.0 CHALLENGES

The station is, however, faced with a number of challenges which include;

• Harmonization of standards and taxes among EAC partner states.
• Porous border, historical and cultural practices have led to the smuggling of goods in and out of Kenya as a way of earning a living.
• Low staffing levels
• Commissioning of the OSBP is pending
• Lack of functional CCTV cameras
• Lack of a mobile cargo scanner
• Shortage of motor vehicles for patrol along the porous border
• Lack of bank tellers at the OSBP, forcing traders to travel to Ukunda which is 70kms away to pay taxes. There is a bank agent which only serves small-scale traders and is costly.
• Lack of incinerators
• Theft- several cases of stolen motor vehicles exiting through the border station. To mitigate this, Interpol police have been allocated office space at the Tanzanian side of the OSBP, to handle such cases. However, they are yet to begin operations.
• Lack of restaurant/canteen in the OSBP on the Kenyan side forcing staff and travellers to cross to Tanzania for lunch and snacks.

Recommendations/Way forward

1. Kenya Revenue Authority to provide space to be rented out within the OSBP by a trader as a restaurant/canteen as a short-term solution. But in the future consider encouraging investments outside the OSBP.
2. Establish a common testing facility for PGAs with related mandates at the border post in order to avoid multiple sampling and testing of similar products. This will also reduce the time and cost of doing business.
3. Fast-truck the process of commissioning the OSBP
4. Develop a mechanism of including the NPS at the KENTRADE portal for them to access information on cleared consignments. This will eliminate the need for traders to have to produce stamped paper documents at the roadblocks and be stopped by the police as is the norm currently.
5. Request for additional staff from the key PGAs at the border in order to make the operations 24 hours. This has already been done through BMC
6. Ensure that the border gets a mobile cargo scanner which will reduce the time that trucks take at the border for verification.
7. Expanding the parking area to accommodate more trucks
8. Increase the number of patrol vehicles at the OSBP
9. Continuous Sensitization and Capacity Building
10. NTFC to regularize the visits to OSBP in order to evaluate progress and address any emerging issues.
11. Enhanced patrol to guard the porous borders
12. Harmonization of standards and taxes among the EAC member states

In case of any inquiry or questions related to the NTFC, the OSBP or Trade facilitation challenges, get in touch with Mr Davilyne Busuru at dbusuru@kepsa.or.ke .