National Standards Council Chairman, Ken Wathome chats with Peter Munya, CS Ministry of Industry, Trade and Cooperatives when the minister met with the KEBS management at his office. [File, Standard]
Figure this out, every time you buy products from overseas, you are expected to pay for inspection of such goods.
Kenya imports thousands of metric tonnes of goods from overseas annually. Most of these products are subjected to quality control in order to protect consumers.
Unscrupulous entrepreneurs make attempts to defraud clients by importing counterfeits. The Kenya Bureau of Standards (KEBS) is the premier institution entrusted with ensuring imports comply with international standards.
Every product imported, whether for human consumption or industrial use, is required to comply with the pre-export verification process.
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Whether a container, car or machinery, an importer is expected to acquire a Certificate of Conformity before the merchandise leaves the country of origin.
Equally, goods for export are expected to undergo quality certification before they are shipped.
For some reason, KEBS appears to perform only supervisory role while the actual work of inspection is outsourced to international companies.
There is a consortium of international companies that carry out the pre-export verification process. Last year, close to 1.2 million containers were cleared through the port of Mombasa. The importer is expected to pay US$250 for each container.
Simple mathematics
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A simple calculation shows Kenyans paid close to Sh30 billion for these containers most of the money going to the foreign companies.
KEBS, instead of outsourcing, could easily have created jobs for thousands of the unemployed Kenyan youth by recruiting them to become inspectors and stationing them at the local ports of entry.
The mathematics for the cost of imports become even more worrying when you consider the total number of non-containerised goods that are also subjected to the same taxation.
Take for example motor vehicles. Looking closely at the number of vehicles that are imported every year, my simple calculation again shows close to 200,000 vehicles pass through the port of Mombasa. My figures are grossly underestimated although I believe since every series of vehicular number plates shows at least 24,000 vehicles are imported under, for example, the most recent series KCV’s.
For each vehicle imported, an inspection fee of US$250 applies. Since this inspection fee applies to all imported goods, my estimate is that we pay more than Sh100 billion per year to these foreign inspection companies.
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Still, these figures could be higher if accurate data is found.
Considering the pressure on Kenya Revenue Authority (KRA) to raise revenue, I believe this could have been an opportunity to increase the exchequer balances by giving KEBS an opportunity to collect these fees on behalf of the Government.
Unused laboratories
These funds alone could have funded a large portion of county government expenses instead of giving the money to foreign inspection firms.
The argument against my suggestion, of course, is that KEBS and KRA have no capacity to perform this inspection. But these State organs have very good but unused laboratories and facilities.
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Besides, capacity can be strengthened. Young Kenyans have the knowledge to innovate applications which can be used to analyse the quality of these products.
African countries and Kenya in particular need to learn to trust in their own capacity instead of over-relying on foreign institutions to determine the quality of products to be used locally.
The hegemonic relationship between developed and underdeveloped countries are sustained through this kind of relationships.
Unfortunately, this arrangement was not imposed on us. It was our own decision to accept these foreign inspectors.
A few years back, the pre-export inspection was optional but in the last one year, this has become compulsory, adding another layer of bureaucratic red tape into the import supply chain and making the country to lose colossal amounts of money.
My analysis is based on seaport imports alone. I have not observed air freight. Through the international airports, a large volume of goods are also imported similar to the sea ports and the verification processes are similar.
The goods imported are subject to pre-export verification and once again international companies perform the quality verification. KEBS needs to re-asses this arrangement and have Kenyans carry out the inspection.
Mr Guleid is the Executive Director of the Frontier Counties Development Council.
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