New breed of freight professionals spur trade

June 27, 2014

New breed of freight professionals spur trade

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An innovative training program for clearing agents is growing a new breed of professionals to spur trade and prosperity in East Africa.

“Where you see trade grow you see prosperity take root. By training the key people in the freight forwarding business, we are helping move goods quicker, save time and money and help the region develop” said Silas Kanamugire of TradeMark East Africa (TMEA).

Run by the East Africa regional freight forwarding governing body (FEAFFA), the program is quickly churning out a fresh generation of professionally trained freight forwarders to quickly expand the ever-growing potential for trade within the East African region.

With TradeMark East Africa (TMEA)’s support, FEAFFA aims to transform the job of freight clearing and forwarding into a recognized profession and to standardize and regulate this key position to streamline the process of doing business in the five-nation bloc.

“My clients are now satisfied with the fast clearance of their goods. We are now not seen as unreliable or barriers to the trade process, but rather partners who can help grow the prosperity of this region”, Said Xavery Komba, CEO of Victorius Tanzania Ltd, one of the trained agents.

“With more than 40% of business costs accruing to transport and logistics, there is increasing appreciation of the importance of the sector in international trade. I am pleased this program will raise professional standards in the industry with the aim of increasing trade and prosperity in the region,” said the Federation’s Regional Executive Officer, John Mathenge.

Up until recently, it was believed that many freight forwarding agents were involved in unethical practices in collusion with officials to avoid duties and taxes and divert transit cargo into local economies causing governments to lose revenues.

Mr. Ntaganda Evarist, Acting Director, Rwanda Revenue Authority Training Department explained, “Lack of capacity of most clearing agents, coupled with unclear procedures resulted in enormous problems to taxpayers such as corruption temptations and delays in clearance of goods thus affecting taxpayer’s profit margins.”

Trade in East Africa is increasing. Volumes of cargo destined for Rwanda, Burundi, and Uganda have increased over the past eight years since the EAC Customs Union was signed in 2005. With faster clearing by the agents, it is estimated that the cargo will increase by eight trucks per day by June 2013.

The efficient flow of international trade relies on a range of skilled service providers working together effectively, including shipping lines, port terminal operators, customs officials, operators of off-dock container yards, land transport agents, and clearing and forwarding agents.

“The program has enabled the customs agent to improve on the declarations they submit to Kenya Revenue Authority which has enhanced the tax compliance levels. This has also reduced the number of offences committed by the customs agents enabling them to improve on the time taken for the cargo to be cleared through Customs thus facilitating trade in the region,” said Mr. Shehe Mzungu, a trainer working with Kenya Revenue Authority at the Kenya School of Revenue Administration (KESRA).

The reform of international trade logistics in the region, and in particular the quality of services offered by the various market actors will yield important economic gains throughout the region.

“This curriculum and the training has come at a very opportune time, as a commitment to the reforms, the Revenue Authorities have decided to upgrade the customs system,” said Customs Commissioner, Uganda Revenue Authority, Richard Kamajugo.

“Our aim is to reduce the time and cost involved in the movement of goods across East Africa by raising the professional standards of clearing and forwarding agents since they are the ones mandated to clear cargo by the EAC Customs Management Act,” concluded Mr. Kanamugire.

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