Effect of Cargo Tracking System on Cross-border Trade Between Kenya and Uganda

Abstract

Trade globalisation and the establishment of economic blocks and agreements have led to increase in export and importation level of goods and services across national boundaries. With the increase of trade volume of businesses, there has been a need to introduce appropriate facilitation measures during the transportation process and at the border post to ease the process of cargo movement. The ratification of the World Trade Organization (WTO) Agreement on Trade Facilitation also requires that we implement measures to ensure faster movement of goods in transit. One of the common trade facilitation measures is the electronic tracking of imported cargo transiting through Kenya. The use of technologies, for example, Radio-frequency identification (RFID), to track physical flow of physical goods is one prominent system that is envisaged to improve the cross-border business activities between countries. The study sought to establish the effect of cargo tracking system on cross-border trade between Kenya and Uganda. Specific objectives was to determine the extent of automation at the Kenya –Uganda border post as well as establish the effect of the cargo tracking system on the level of trade between Kenya and Uganda. The research adopted an exploratory research design and focused on the structure of an enquiry with an aim of drawing inferences from a causal relationship of the data. The targeted respondents were border officials at the Kenya – Uganda border and also at the head office, Cargo tracking department with purposive sampling design being employed to identify the respondents. Primary data was collected using a semi-structured questionnaire. The findings were that the electronic cargo tracking system adopted by Kenya Revenue Authority has been able to reduce the level of diversion of cargo to the local market as well as reducing the time taken to clear the cargo at the border points and the collection of duties and fines has been made easier due to the implementation of the system. From the regression model, the findings was that the cost monitoring transit cargo had been reduced by a high level as a result of the introduction of the cargo tracking system. Similarly, diversion of transit cargo to the local market had been reduced through the introduction of the cargo tracking system by the KRA. The study concludes that electronic cargo tracking system improves the border efficiency, reduction of transit time and cost of private business. The study recommends synchronization of electronic cargo tracking system and the and RFID system being employed by both Kenya and Uganda to create a seamless operation and management of cargo between the two countries.