County-level taxes and transit charges are driving up shipping expenses along major Kenyan trade routes, with transporters paying around $53.60 per truck in Mombasa alone. Industry stakeholders warn that overlapping local levies and decentralized fees are threatening regional trade competitiveness.
Internal Trade Barriers on the Northern Corridor
Kenya’s devolved county governments are becoming a major roadblock for cargo moving along crucial trade corridors. Transporters and business owners report that inconsistent local fees create an internal tariff system across county lines, driving up transit costs and extending truck turnaround times.
The administrative hurdles are especially heavy along the Northern Corridor. As trucks cross from one jurisdiction to another, they encounter a fragmented network of local fees, including county cess, entry charges, parking tolls, offloading levies, and branding or advertising tariffs.
Stakeholders from the Mombasa Port and Northern Corridor Community are pushing for direct discussions with the Council of Governors. Their goal is to eliminate double taxation and streamline the regulatory environment. The Council of Governors operates as a non-partisan statutory body established under Section 19 of Kenya’s Intergovernmental Relations Act of 2012.
Impact on Regional Trade and Port Operations
The Port of Mombasa serves as an essential economic gateway for landlocked neighbors including Uganda, Rwanda, South Sudan, Burundi, and parts of the eastern Democratic Republic of Congo. Maintaining the corridor’s efficiency is vital for regional commerce.
Regional trade partners have voiced frustration over the rising financial burden. Major port users in Uganda and South Sudan have specifically pointed to the Mombasa County cess as a direct drag on regional exports like Ugandan tea.
Trade officials note that intra-African commerce remains limited. Trade data shows that intra-African trade currently stands at only about 17 per cent, highlighting the need to eliminate domestic friction to capitalize on broader continental agreements.
Tea Industry Pressures and Transport Costs
The tea sector has emerged as one of the most vocal critics of the decentralized fee structure. Cargo moving through the Mombasa Tea Auction faces mounting administrative overhead before ever reaching its destination.
Transporters pay approximately $53.60 per truck in Mombasa alone. With more than 400,000 trucks hauling tea across multiple counties and encountering road tolls or county cess along the way, the total financial impact on the supply chain is immense. Trucks are also hit with daily parking fees regardless of whether they actively access port facilities.
Additional charges often apply to containers moving through Kenya Ports Authority infrastructure. Willy Mutai, chief executive of the Tea Board of Kenya, pointed out that local authorities are effectively using national highways as revenue collection points.
The competitiveness of the Mombasa Tea Auction and the wider tea value chain depends on a conducive and predictable business environment.
George Omuga, East African Tea Trade Association managing director
Implementation of the County Licensing Act
Traders are pressing for the immediate implementation of the County Licensing (Uniform Procedures) Act, 2024. The legislation aims to standardize licensing rules and eliminate the overlapping fees that penalize cargo moving across county boundaries.
The statute directs the Council of Governors to formulate strategies that harmonize fee structures and streamline regulatory requirements. Trade and Investment Cabinet Secretary Lee Kinyanjui acknowledged the severity of the problem and promised government action to enforce the law.
We cannot promote exports while businesses are subjected to multiple licences and levies every time products move from one county to another.
Lee Kinyanjui, Kenya’s Trade and Investment Cabinet Secretary
Agricultural Supply Chain Disruptions
The burden of decentralized taxation extends far beyond tea, affecting agricultural commodities across the country. Farmers and transporters hauling fresh produce face levies at their point of origin, at multiple checkpoints along transit routes, and upon arrival at destination markets.
Adding to the unpredictability, individual counties use widely varying methods to calculate fees. Charges may depend on cargo tonnage, vehicle category, package types, or total trip count, leaving logistics planners unable to accurately forecast shipping expenses.