Determinants of implementation of the east African community rules of origin, 2015 in Kenya

Abstract

The East African Community (EAC) has taken steps forward by implementing a free trade area, customs union and a common market in its region. The implementation of the former requires the removal of all trade barriers in the intra-regional trade. The purpose of this study was to establish the determinants influencing the implementation of the EAC RoO, 2015 in Kenya. It was guided by three specific objectives namely; To establish the effect of Structure of the EAC RoO on the implementation of RoO, 2015 in Kenya; To evaluate the effect of capacity of customs personnel on the implementation of the EAC RoO, 2015 in Kenya; and To determine the effect of stakeholder awareness on the implementation of the EAC RoO, 2015 in Kenya. Customs union theory and theory of economic integration were used as anchor to this study. The customs union theory focuses more on the welfare gains and losses that go after the structuring of customs union while theory of economic integration assumes perfect competition, and whose major concern is the location of production of different kinds of goods. The study adopted explanatory research design and covered the following agencies involved in the implementation of Rules of Origin 2015 in Kenya; Kenya International Freight Forwarders and Warehouses’ Association (KIFFWA), Members of the Kenya Association of Manufacturers (KAM) and Kenya Revenue Authority. Staff in supervisory and management positions in the three agencies were the focus of the study. There are approximately 165managers in the three agencies that were all studied since the study used census methodology. Federation of East African Freight Forwarders Associations (FEAFFA) was used for pilot testing thus was not included in the final data collection and analysis. It relied on primary data which was collected through a structured questionnaire. Quantitative data was analysed using descriptive and inferential statistics and results presented using figures and tables for easy understanding and interpretation. The study findings indicated that structure of the EAC RoO, capacity of customs officials and stakeholder awareness were key determinants of implementation of RoO, 2015 in Kenya. Regression results showed that 53.9% of the variations in implementation of 2015 East African Community Rules of Origin in Kenya are jointly accounted for by the variations in structure of the EAC RoO, capacity of customs officials and stakeholder awareness. The study concluded that there was improved implementation of EAC Rules of Origin, 2015in Kenya which was associated with effectiveness of critical success factors hence successful implementation. It also concluded that the structure of the EAC RoO, capacity of customs officials and stakeholder awareness had a positive influence on the implementation of EAC Rules of Origin, 2015in Kenya. The study recommends that that there is a need to sensitize and empower users at border stations and other stakeholders about the changes in procedures that have been brought by the implementation of Rules of Origin. The implementers; Kenya Customs also ought to set practical implementation objectives with regards to timeframes, the clarity of their action plans and the allocation of resources both human and financial. It also recommends that stakeholders should be included in all pre-implementation and inception phases as well in the execution of agreed upon strategies. This will increase the acceptability, and create a bridging social investment for the strategy implementation, as well as enriching the process with more ideas.