Kenya’s Decision to Waive $3,000 Deposit Fee on Ugandan Cargo Containers
In a significant move to enhance trade relations, the Kenyan government has decided to eliminate the deposit fee imposed on containers carrying Ugandan goods at Mombasa port.
The Kenya Ports Authority has historically charged $3,000 (approximately Shs11 million) per container, a practice vehemently opposed by the Ugandan business community, citing increased import costs.
This decision to scrap the fees came about during a meeting between Ugandan and Kenyan authorities held at Mombasa Port.
Capt William K. Ruto Afni, the Managing Director of Kenya Ports Authority, expressed that this fee removal would facilitate smoother trade between the two nations. He highlighted the importance of Uganda as a key trading partner for Kenya, with a rising volume of exports and imports passing through Mombasa. Notably, nearly 50 percent of expenses incurred by many Ugandan traders were attributed to port and transportation costs. Reducing these costs is expected to lead to more competitive pricing.
As per the existing regulations, importers faced an additional daily charge of $40 for every day beyond 15 days from the arrival of their goods in the country, in addition to the $3,000 deposit paid to the shipping line. Failure to return the container on time resulted in the forfeiture of the deposit.
Mr. Vincent Bagiire, the Permanent Secretary in the Ministry of Foreign Affairs, who led the Ugandan delegation, also called for the elimination of all regional trade barriers between the two countries. He emphasized the significance of member states’ commitment to developing regional transport infrastructure, which would promote regional integration and trade, ultimately making the region more competitive for business and investment.
Mr. Bagiire further highlighted the importance of infrastructure improvement by regional partners to boost trade and recalled the 2013 Summit Directives of the Partner States of NCIPs that aimed to undertake coordinated infrastructure development projects within the Northern Corridor countries for the economic growth and development of the region.
The Chairperson of the Kampala City Traders Association (Uganda), Mr. Thadeus Musoke Nagenda, welcomed this development, anticipating that it would significantly ease trade between the two countries. He praised the removal of these fees as a positive step that offers hope for the promotion of businesses.