Mombasa to get new zone to cut Ugandan importers’ costs

January 24, 2018 in Business, Infrastructure, Transport by Editor

January 24—Ugandan importers of vehicles will be pleased to know Mombasa is to get a Free Trade Zone (FTZ) later this year meaning lower costs and less hassle at Mombasa Port. This is a follow up to a Kenyan Cabinet decision made four years ago and some 1000 acres have been put aside for the new complex at Dongo Kundu not far from the port.

FTZs are commonly located in close proximity to airports, seaports and national borders. They allow for the import and export of goods without any tariff or non-tariff barriers. Instead, taxes are charged when the goods move from the zone to the receiving country where customs duties are imposed.

Compared to present circumstances, where an importer might have to endure expensive time-consuming processing, with FTZ the vehicle is immediately transferred to this special area for onward dispatch to the recipient country.

Kenya has never hidden its quest to stay ahead of the competition as a regional logistics hub and development of an FTZ is expected substantially increase handling volumes at Mombasa Port.

In 2014, the Kenya finance ministry said, “This will be the first free trade zone in the region. It will spur economic opportunities for the country and open up trade in the region.’

Essentially, free trade enables lower prices for consumers, increased exports, benefits from economies of scale and a greater choice of goods.

According to the Kenyan industrialization and enterprise development ministry, the planned Mombasa FTZ will allow Mombasa Port to evolve from a pure centre of transport and become more directly involved in added-value activities such as cargo processing and logistics. This in turn would allow Mombasa to play a greater role in the development of international trade, thus helping to stimulate the Kenyan economy.