Effect of customs administration procedures on trade facilitation in Kenya

Abstract

Trade facilitation contributes to economic growth and development among the trading partners by improving volume of trade and reducing costs of trade. Customs administrations find themselves increasingly under pressure from national governments and international organizations to facilitate the clearance of legitimate passengers and cargo. The general objective of the study was to investigate effect of customs administration procedures on trade facilitation in Kenya. The study was guided by the following specific objectives; to determine the effect of declaration of goods on trade facilitation, to establish the effect of documentation on trade facilitation, and to investigate the effect of verification of goods on trade facilitation in Kenya. The following theories were used to expound on the study; Resource-Based View Theory, Heckscher-Ohlin Theory, and New Trade Theory. The study used explanatory research design. Explanatory research design enables researchers to connect ideas to understand the cause and effect among variables. The population of this study consisted of customs officials whose total number is 200. Data was collected using a questionnaire based on the specific objectives. Diagnostic tests of both the independent and dependent variables were carried out to establish whether regression analysis test can be undertaken on them. The study adopted linear regressions analysis which indicates the influence of custom administration on trade facilitation performance in Kenya. The descriptive statistics of the study was presented through percentages, means, standard deviations out by the customs office and is an important part of customs procedures. The results indicated that declaration of goods had a positive and significant effect on trade facilitation (β = 0.416, p = 0.000); documentation had a positive and significant effect on trade facilitation (β = 0.200, p = 0.007); and verification of goods had a positive and significant effect on trade facilitation (β = 0.314, p = 0.000). From the study findings, the study concluded that customs administration procedures have a significant influence on trade facilitation in Kenya. The study recommended that Kenya Revenue Authority should enhance declaration of goods by ensuring that declaration of goods follows the international standards; should ensure accurate completion of required export documentation, comply with import/export documentation requirements and produce documents such as invoice for the goods; and should ensure thorough inspection of the goods, conduct complete inventory inspection and application of scanners in verification of goods. The study suggested that future studies could focus on customs administration procedures and trade facilitation in within the East African Community states for comparison purposes.