As URA’s motto (Developing Uganda Together) proclaims, the "Executive Forum for the Transformation of Customs Services" was a participatory arrangement for distinguished corporate establishments and other government bodies hosted at Hotel Africana’s Zambezi Hall on 22nd March 2007. Although scheduled for 9 AM, the seminar started only 28 minutes late. Sheena, the moderator, called it “…sensitization about what the customs modernization drive is about.”
URA Commissioner Mr. Peter Malinga, (invited to inaugurate the seminar by Phoebe Lutaaya) was the Commissioner-General for the Day in place of Kagina who had not yet arrived, and he called it “…a winning program.”
The first presentation, made by Mr. Dan Arora, was on Customs Transformation Initiatives and URA’s Road Map for 2007. He gave highlights of the initiatives undertaken by customs and where they wish to go in the next financial year.
“It’s a journey that begins with a few steps, but we need the momentum. That’s why you guests are here…How best can our clients get served by our departments?” Arora asked. “CMP (Customs Modernisation Project) aims at achieving a business environment that enables excellent services. Our areas of focus are people, processes and systems.” The Program was launched in 2004 to transform itself into an efficient, effective client-focused tax administration.
Some of the Reactions from Participants:
James Kalibbala , Chairman UMA was worried about the cost of doing business; “…The presenter did not say anything about what’s likely to happen. How’s all this going to impact us?”
URA Commissioner-General Allen Kagina walked in late and reactions were interrupted: She spoke 20 minutes before 11 AM, “URA wants to increase voluntary compliance. We are selling a product at URA that’s not easy to sell…We will look for funds, automate, and document on paper. We are trying to run URA as a corporate and not a government organisation. The demand of the fast growing business environment needs to be met… We want to run our business as a winner. URA has strategies in its corporate and business plans…it should be easier for you to pay taxes. So what are these things coming in URA? You can pick what is important from this seminar.”
Issa Ssekitto, KACITA Public Relations Officer (0772523129) continued with the reactions and spoke candidly as always: “The more you sharpen the clearing agents to use the ASYCUDA + +, the more you widen the gap between the importer and the agent. Some of them are unscrupulous. We should have a taxpayer’s day…Don’t leave us behind. Arrange for sectoral tax clinics. This is why I first asked where the Commissioner’s facilitation was...Questions will be relevant as to those people at the clinic…At least we are more interactive with URA today than when we started five years ago.” He concluded amid amused applauds from the URA contingent.
Hajji Lukenge Ishak, Board Member of Uganda Coffee Trade Federation (UCDA Secretariat, 2nd Floor Coffee House, Jinja Road) [0752777755] said, “VAT and DDP applications can be done at the same time. Automate the process. Propose an internal capture of entry returns. During modernisation, is the issue of counterfeit and dumping captured? This is something which will kill our manufacturers. Have an entry point at all the business points. Allow your officer to come to my station and know the process at my workplace, a hands-on approach of sensitizing the URA staff.”
Mwesigwa Denis, from National Drug Authority was concerned about quality maintenance. “Some ICDs are substandard. People start complaining about expired drugs. Some of our colleagues (in other countries) have a one-stop centre, a warehousing system where all drugs are brought to that bonded warehouse and cleared from there. Improve technology other than distributing it. When you improve the bonded warehouse, we will be ready to work with you.”
Some of URA’s Assistant Commissioners who answered the questions
Assistant Commissioner, Project Manager, Field Delivery Charles Nuwagaba responded to the reactions by saying, “What do you say, you who use our processes? What you have on your desks are our records (in the red books). We will move to the next step of reengineering. If a consignment is going to be handled, we invite all stakeholders to deliberate on that. We have a risk targeting procedure. We target goods like drugs after informing counterparts to come along. We may select special bonded warehouses to deal with the sensitivity, quality and special handling that drugs need.”
Charles handed the microphone over to another commissioner (Extreme left with red tie in the photo above), “…How do we fit into the regional programs? All the reforms reduce challenges of business in Uganda making us even more competitive against our partners. We have obtained funding, covering the four East African countries and a one-stop border upgrade for Katuna, Malaba and others. Ministry of Agriculture, Police, UNBS will be housed under one roof. They will be able to finish at a one-stop point. Cargo tracking: We have agreed with Mombasa to track goods till their destination. The convoy system will cease. Costs and time for trucks to move to Uganda will be reduced considerably. Our agents should be able to operate in Kenya, and do business in Mombasa.
“There is no standard finished product or raw material. Salt might be a finished product when you put it in sauce while a leather tanning industry might use it for changing their leather (hides and skins). Tax clinics were a concoction because tax payer days were enormous and some people never attended…Because of feedback, we have come to realize that people don’t step at tax clinics. So now we are targeting interest groups, so that they can be handled after internalisation’ said URA’s Patrick
“URA should be a model for the region.” Jennifer, a member of a task force, spoke about the challenges, “Automation System Act Section 36 provides for perishable removal of …” but left the quotation hanging and continued, “Release cannot be allowed. In automation, there is the ignorance and measures taken, plus attitudes of URA staff. Third party is ignorant about what goes on in customs. Customs procedures are not known. We need to understand international trade, examples of intercoms and information you should know. Trade experts should have regular consultations and advise one another, tax clinics should continue. We do not concentrate on exports but governments focusing on export promotion. We need to focus on the procedures.”
Marianne Ssebunya, General Secretary, Uganda Freight Forwarders Association (0712 754191),sounded interesting in her reaction, “This looks like a dream but you are far ahead in implementing it; you are committed. But some cadres do not know about this modernisation. We request that it trickles down to the lower ranks. It’s like agents are not allowed to think but follow what they are told. They need to release their minds. Facilitate them for telephone calls at least.”
A Uganda Transport Agencies representative started by praising the ‘Pearl of Africa’ as a comfortable and peaceful country. He’d had 21 years of experience in Operations and Finance Management for his company which transports in bulk for companies like Shell, Chevron. He had worked in Asia as well as African countries and commented that, “Most bulk comes from Busia (Nairobi, and Kisumu cross from there). Busia houses a lot of cargo and bulk…Lack of communication (is the problem), there is a 3km view of the distant Kenya side. Pipelines are down at the Kenyan side. Joint verification has to be enforced to clear the consignments fast. Rotational stamping: There are 2 gates. Once the trucks cross, they go into the long route, get a stamp on the other gate, minimum 8 hours yet we are talking of 20 minutes here…make processes faster. Re-registration of TIN numbers is very important for tax payers. Without paying taxes, some goods are dumped.”
The second presentation focusing on the long term strategy was presented by Rachael (0772 505641). “We want satisfaction guarantee for our clients…Global trade is changing and we need to change to facilitate trade. It is posing new challenges to all involved parties of the supply chain. Our main focus is on facilitation.” Rachael started. She explained the strategy of accreditation which involves recognizing a person, organisation, company as having met set standards, plus a Certification System for importers, brokers, freight forwarders, carriers, terminals, warehouses and ports.
Accreditation can be implemented through the following 5 levels (i) Normal Import, Export and Transit, (ii) Use of Procedures linked to permissions and deferred payment, (iii) Stairway SME facilitation-One routine/procedure. Stairsec Accreditation, a One-stop shop, Single Window to government, (iv) Optimised Processes, Non-stop shop-Minimal Checks, Stair security accreditation.
“The fifth level, International Recognition, is a long term dream or strategy, but achievable.”
Ben Manyindo, from Uganda National Bureau of Standards, also spoke, “It should be called facilitation of fair trade, and not just facilitation of trade. Fairness requires that you are compliant to the systems. High compliance levels are required for accreditation yet we have small players like traders…We need to look at how best to treat these imports. Our challenge at UBOS and URA is management of non compliant goods; at times they are refused entry. How do we manage them out of this country?”
Irene, UBOS (Uganda Bureau of Statistics) paradoxically advised, “Learn from the challenges we are getting from the green channel…”
EDITOR-What challenges does the green channel face yet earlier someone mentioned that it’s meant for clients who do not need help? [“Green channel” means the part of the exit from any customs area designated as such... S.11 F.A.7 of 1999, Act 4 of 1984 (The East African Customs Management Act)]
Abdallah N. Balere, Uganda Motor Importers Association (Used Motor Vehicle Importers) reacted, “There is a tendency of shifting goal posts by evaluation (department) but URA’s approach of working as a family will help us…Every company pays VAT and at the end of the year, corporate tax is paid. However, a new Value Book is always introduced when a certain vehicle is imported frequently… (8.9 Million is paid for a Mitsubishi Fuso nowadays unlike in the past). We also want to be on the band wagon. There is also a big problem of robbery in Kenya, 10 vehicles are lost per month and 6 people killed per year.”
Carol, from Private Sector Foundation of Uganda, said “Many times systems are put in place but not assessed. If the Private Sector Foundation had traveled with URA to assess the Eastern Route, the public would not complain. We also found out that private sector members take time at the scanner in Mombasa.”
One of the founder members of the original URA was one of the last contributors, and his opinion was that, “Blames are usually put on URA. Unless working under one route is quickly attended to, delays may be experienced. I have an office at Malaba, Mutukula and Katuna. Why arrest a man who has parked 8 cars and let him stay in prison for one week? He sends his drivers, some of whom are not qualified or knowledgeable. Some have forged passports and documents. URA should help sensitize the security personnel so that once arrests are made, these areas should be focused on. Manufacturers are the most ignorant about customs procedures. Let these people be directed to UCIFA.”
“I would like to take note of the fears. Instead of looking at them, why not look at their risks in the area of provision? We need to see trade facilitation and how it can improve for all of us here…UCIFA should let bulk cargo be cleared inland,” a representative from UFFA (Uganda Freight Forwarders Association) reacted last among the participants.
“Post any idea or suggestions to add value to the modernisation effort on our website. We are going to introduce a modernisation test for our 1,000 plus staff,” mentioned URA’s Patrick.
“Your contribution is important to URA,
So send your feedback on the processes to the address: cmpt-gp@ura.go.ug”
The organizer of the seminar recorded a fairly full house…Notable absentees though were the Inspector General of Police, Kale Kaihura 0772 307034, and the Executive Director of Uganda Investment Authority, Dr. Maggie Kigozi
Does Port MOMBASA have adequate Capacity?
DESPITE being the largest gateway to East and Central Africa, Kenya’s coastal port of Mombasa is in danger of losing its historical dominance in the region. The price is being paid for years of neglect to this port and road infrastructure. Low capacity use of the port is also attributed to civil strife in the Great Lakes Region states of Democratic Republic of Congo, Burundi and Rwanda, and Sudan, all served by the harbour. However, more significantly, the drop in volume of cargo landed and uploaded has been associated with poor port management by the Kenya Ports Authority. KPA was established by an Act of parliament on 20 January 1978 as a successor to the East African Harbours Corporation. Apart from Mombasa, KPA also has under its jurisdiction the small ports of Lamu, Kiunga, Kilifi, Malindi, Funzi, Mtwapa, Shimoni and Vanga.
‘Highly politicized selection of managers, corruption, and disregard of professional standards plus frequent changes of management has created weaknesses in KPA’s performance,’ said Otieno Kajwang, Kenyan opposition Member of Parliament (as reported on www.businessinafrica.net).
During a KPA Stakeholders’ Forum on Tuesday 23 May 2006 at the Sheraton Kampala Hotel, Mr. Issa Sekitto, Spokesperson of the Kampala City Traders Association (KACITA) whose members visited the port at the end of April 2006 gave two reasons for the negative trends: First, repressing of the East African Union increased the tariffs and import duties.
‘KPA should advise the Kenyan Government to give an amnesty that will let us know that we are real East Africans.’ Mr. Sekitto said.
Nevertheless, progress is being made to review tariffs which have been intact since 1985. Secondly, barring of loose (conventional) cargo; this way people are forced to become importers of containers and soon go out of business.
The full house forum had been organized to present to stakeholders the latest developments at the port and invite their views to its improvement. ‘Views have contributed significantly in improving efficiency. KPA has improved through focused investment and building customer relations,’ remarked Mr. Abdallah H. Mwaruwa, MD-KPA.
Some traders present complained about their lost cargo but KPA affirmed that since January 2006, no container was lost. In fact, a port facility assessment was carried out in 2005 ending in continued focus on security improvement. A gate pass module will streamline security.
The design capacity of the container terminal is congested but new cargo holding equipment is in plan. Strides are being made to computerize key port services, implement electronic data interchange from shipping lines and reduce human interaction which causes port problems. Mr. Mwaruwa was optimistic that by 2007, Mombasa will become an E-Port.
‘76 percent of the transit cargo that goes through the Port of Mombasa ends in Uganda,’ spoke Gen. (Rtd) J.R.E. Kibwana EGH, CBS, and Chairman-KPA. That shows just how much Ugandans should be concerned about this seaport. ‘We believe the Port of Mombasa is your port. KPA is interacting with other ministries to ensure movement of cargo in the Northern Corridor( Roads Network), speedy processing of documents and expansion of the container ward. Doing business is expensive but we are trying to reduce this cost so that savings can be transferred to our customers.’
‘If you are serious about competition, you must keep your cost down. That is the edge. Tanzania’s cost effective route is Mombasa,’ said Mr. Gichiri Ndua, the Corporate Services Manager-KPA. His view was supported by the transit traffic report for 2004 and 2005 in which Tanzania, a coastal nation had the second highest volume going through the port and its annual change in volume was a 22.4 percent rise compared to 21.3 percent for Uganda in first place. Mombasa also serves Rwanda, Burundi, Eastern DRC and Southern Sudan.
But does the port have adequate capacity? ‘It is very important not to lose focus. Interest has been evaluated for a second commercial port but the privatization bill ties our hands,’ said Mr. Ndua during his graphic presentation. ‘We must be aware of using the available capacity in the existing port. The Port of Mombasa might be constrained.’
Mr. Ndua added that during the traffic projections until 2027, Sudan had been left out. Today DRC is awakening and Burundi is coming up. ‘We need to focus.’
Prompted by the performance of China and India, the KPA management in 2000 introduced planned maintenance, condition monitoring on some of their equipment, and predictive maintenance where infrared systems can detect when distribution is likely to suffer.
Between 2004 and 2005, the authority received 7 new top loaders, 3 Sixteen Ton Forklifts and 1 mobile crane. From M/S Damen shipyards of Holland came 3 tugboats, 2 pilot boats and 2 patrol boats. M/S ZPMC China delivered 20 terminal tractors (tug masters), 4 Ship-to-Shore (STS) cranes, 12 Rubber Tyred Gantry (RTG) cranes, and 2 Rail Mounted Gantry (RMG) cranes. They pick containers from the back of rails, measure their weight and save time. Overweight containers are not loaded.
Concerning the Port Master Plan, Mr. Ndua said that KPA shall review and find out the best location for a container terminal. Updating the stakeholders, he revealed that most railway lines had been uprooted and more shades destroyed making the container station a proper stacking area though capacity has not been addressed.
‘People had different interests in the Free Trade Zone but we do not facilitate trade for one person. We will soon be going to press to tell them: this is how we want it.’
In implementing Information Technology (IT), KPA introduced SAP (automating office business processes), EDI (Electronic Data Interchange), CBS ( a Community Based System which links port users electronically to allow secure exchange of authorized data between partners) and the Kilindini waterfront Project. By 2007, this project may be thrown out though it automates the core port operations of the authority including terminal, shipping and distribution operations in line with KPA’s strategic objective.
Close to the end of the forum, Mr. Omar Kassim, the National Chairman Uganda Clearing and Forwarding Agents Association said, ‘This forum is more of a unilateral than multilateral approach. Broader regional frameworks forge stronger ties, trading blocks emerge for the benefit of regional governments. The majority of your customers come from the private business sector. My concern is for you to forge a consultative partnership through which benefits can be channeled to the people at the grassroots level. One dogma I learnt at another workshop is that if you do not embrace change, you will be left out. I cannot speak big words to someone who has not been educated. Please, appraise your business partners constantly if working harmony is to be achieved.’
