President William Ruto’s administration has agreed to a raft of measures to lower the cost of doing business for Kenyan traders, including cutting the benchmark for general consolidated cargo and sharply reducing railway charges for goods moved from the Inland Container Depot (ICD).
The measures were agreed during a meeting between Ruto, Micro, Small and Medium Enterprises (MSMEs), traders and stakeholders in the consolidated cargo sector, following disagreements over taxation, customs clearance and handling of imported goods.
Under the deal, the Kenya Revenue Authority (KRA) will reduce the applicable benchmark for general consolidated cargo from Sh2.5 million to Sh2 million.
The government said the intervention follows concerns by traders that the previous benchmark had increased their cost of doing business and threatened thousands of small and medium-sized enterprises.
“The government and traders have reached an agreement to resolve the outstanding issues while strengthening compliance, transparency and accountability in the consolidated cargo sector,” the Ministry of Investments, Trade and Industry said in a communiqué.
The existing rates for ready-made garments, footwear and fabrics will remain unchanged, while newly negotiated rates for air cargo will continue to apply.
In another major concession, Kenya Railways will reduce the charge for transporting cargo from the ICD to the Bomaline De-consolidation Centre from Sh58,000 to Sh10,000 with immediate effect.
The move is expected to provide relief to traders who have complained of high logistics and handling costs associated with moving their goods after clearance.
The government said the measures were part of efforts to make trade more predictable and reduce unnecessary costs facing businesses.
The meeting also agreed on measures aimed at protecting Kenyan traders from competition in sectors considered suitable for local participation.
The government will expand existing legislation to reserve retail trade and specified lower-level jobs for Kenyans, while defining areas in which foreign investors can participate.
However, the government said it would continue welcoming foreign investment that brings capital, technology, value addition and quality jobs to the country.
The move follows President Ruto’s recent directive for authorities to crack down on foreigners operating small businesses that could be undertaken by Kenyans.
The government and county administrations will also work together to create a more conducive environment for traders.
The Ministry said the partnership would leverage the County Aggregation and Industrial Parks programme to support businesses while protecting legitimate enterprises from unnecessary harassment, intimidation and disruption.
A multi-stakeholder committee chaired by the Cabinet Secretary for Investments, Trade and Industry will oversee implementation of the agreement.
The committee will bring together KRA, relevant Government agencies, traders, consolidators and other stakeholders in the sector.
It will be tasked with addressing emerging issues and will report quarterly to the President on progress in implementing the agreed measures.
The Government said traders, importers, manufacturers, logistics operators and MSMEs remained an essential pillar of Kenya’s economy.
“The agreement reached today establishes a new partnership based on consultation, predictability, compliance and mutual responsibility,” the communiqué said.
Traders and consolidators will, in return, be required to comply with customs and tax requirements and operate within the agreed framework.
The government pledged to simplify trade procedures, lower unnecessary costs, improve infrastructure and create an enabling environment for legitimate businesses to grow.
The cargo agreement comes as the administration seeks to address complaints from small businesses over taxation, import costs, bureaucracy and competition.
The government said its approach would seek to strike a balance between protecting local traders and maintaining an environment that attracts productive foreign investment.
The reduction of the consolidated cargo benchmark and the steep cut in rail charges are expected to offer immediate relief, while the proposed legislative changes could have longer-term implications for the structure of Kenya’s retail and small-business sector.
The Ministry said the new framework would strengthen cooperation between the government and traders and provide a mechanism for resolving disputes before they escalate.
The President’s meeting with MSMEs is part of broader efforts by the administration to position small businesses as a key driver of economic growth, employment and household incomes.
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