The COMESA Business Council (CBC) has received complaints from businesses in several Common Market for Eastern and Southern Africa (COMESA) countries highlighting that their products are stranded at Kenya’s various ports of entry.
Further concerns have been raised regarding the cancellation of pre-existing orders due to the measures Kenya has imposed, namely the non-preferential customs duties that are applied on COMESA origin goods.
Companies have been informed that goods recorded in the system since 8 September 2020 are still required to pay customs duties, as the preferential treatment will be applied only after the issuance of the gazette.
The Kenyan move has also affected non-COMESA countries who have enjoyed preferential treatment from the East African Community (EAC), as part of the COMESA, EAC, SADC Tripartite Free Trade Area (TFTA).
The CBC has said it recognises and appreciates the efforts and progress made by the COMESA Secretariat, the Kenyan Authorities and private sector associations, to resolve the issue.
“We have been informed that an EAC policy meeting held on 13 September 2020 agreed on a stay of application of the EAC Common External Tariff (CET) on goods from COMESA and SADC from January 2020 up to June 2021, subject to finalisation of the provision,” the CBC said, “The decision is to be gazetted to enable implementation.”
The CBC added that Kenya will continue to trade with COMESA and SADC members in accordance with the pre-existing trade arrangements.
It added that “to date, the stay of application has not yet been gazetted, therefore the duties are still applied”.
Kenya is a key trading partner within COMESA, and a strong driver of intra-regional trade. Several businesses and investors in countries covered by COMESA have chosen to develop manufacturing and distribution hubs within the country and region, based on Kenya’s membership in the COMESA free trade agreement.
This restrictive measure will likely have an adverse effect on goods in transit imported from COMESA into Kenya, and goods destined to the rest of the region and internationally, the CBC said.
The council continues to engage with COMESA and partners in Kenya, to address the business impediment which has already significantly impacted operations and raised unprecedented costs to industries in the region.
The COMESA secretariat has informed the business community of continuous collaboration with the Kenyan government to swiftly resolve the matter.
The CBC recommended that member states consult on and implement a grace period of at least one month. This would ensure business readiness and adjustment, prior to instituting trade measures, especially those with a significant impact on business operations and cross border trade.
Moreover, it recommended the Kenyan authorities to consider implementing the stay of application from 8 September 2020, instead of the gazette’s date of issuance. In this regard, the preferential duties based on the COMESA FTA should still be applicable during the period.
The Common Market for Eastern and Southern Africa (COMESA) established a Free Trade Area (FTA) on 31 October 2000, granting preferential tariffs to products of COMESA origin.