Effect Of Customs Electronic Systems on Trade Facilitation at Key Entry Points (JKIA, ICD and Mombasa Port) in Kenya

Abstract

Despite reforms, trade procedures in Kenya remain lengthy, cumbersome, and costly. This has negatively impacted the competitiveness of Kenyan goods in the region. This study investigated the effect of customs electronic systems on trade facilitation at key entry points in Kenya. Specifically, the study sought to determine the effect of the Integrated Customs Management System on trade facilitation at key entry points in Kenya; establish the effect of the Electronic Cargo Tracking System on trade facilitation at key entry points in Kenya, and assess the effect of scanning technology on trade facilitation at key entry points in Kenya. The study was supported by diffusion of innovation theory, technological determinism theory, and resource-based view theory. The explanatory research survey design was employed. The target population of the study was 147 Customs officials at JKIA, ICD, and Mombasa Port. Out of the 147 questionnaires distributed, 143 were filled and returned resulting in the response rate of 97.27%. Data collected was analyzed using descriptive and inferential statistics. Descriptive findings were presented in form of averages, standard deviations, counts, and percentages. Inferential statistics relied on the use of correlation and regression analyses. The study findings indicated that the Integrated Customs Management System had a positive and significant effect on Trade Facilitation at key entry points in Kenya (β1=0.230, p=0.02<0.05). Electronic Cargo Tracking System had a positive and significant effect on Trade Facilitation at key entry points in Kenya (β2=0.153, p=0.028<0.05). Likewise Scanning technology had a positive and significant effect on Trade Facilitation at key entry points in Kenya (β3=0.506, p=0.000<0.05). The study concluded that Customs Electronic Systems play a fundamental role in explaining changes in trade facilitation in Kenya. The study recommended that management of key entry points should continue encouraging the use of customs electronic systems in daily operations. The management should organize regular training workshops aimed at equipping employees with the necessary skills to handle customs electronic systems. The government of Kenya should allocate enough financial resources to boost the development and maintenance of the customs electronic systems. Future researchers could introduce intervening or moderating variables in the model and establish their role in determining the relationship between customs electronic systems and trade facilitation. Some of these factors could include government regulations, organization culture, and technological capabilities.