The ongoing standoff between the South Sudan Revenue Authority (SSRA) and South Sudan importers is significantly impacting cargo movement at the Port of Mombasa and surrounding custom-bonded warehouses, leading to severe congestion. Importers are challenging the SSRA’s directive, which mandates that duties be paid in United States Dollars (USD) at the port. Many traders from the landlocked nation, however, prefer to pay in South Sudan Pounds (SSP) to mitigate the high costs of doing business.
The Kenya International Freight and Warehousing Association (KIFWA) has reported a major backlog of essential goods such as food, pharmaceuticals, and other basic commodities. Thousands of containers and vehicles remain stuck in the port and at various Container Freight Stations (CFSs), unable to be cleared since November 20, 2024. KIFWA Chairman Roy Mwanthi revealed that despite goods being cleared, they have been unable to move due to the SSRA’s demand for duty payment in USD.
While KIFWA acknowledges the SSRA’s rights to collect taxes in Juba, the dispute centers around the refusal of South Sudanese importers to adhere to the directive. This refusal has resulted in widespread delays and congestion. Mwanthi highlighted that traders have pledged to halt their businesses until they can pay duties in SSP at the Nimule border, a stance that has only exacerbated the situation.
Compounding the problem, Clearing and Forwarding Agents are reporting additional challenges, including mounting demurrage charges due to the delays in cargo movement. These charges, stemming from storage and other costs incurred during the delay, are further straining the operations of agents handling South Sudan-bound cargo.
The issue is also raising concerns regarding compliance with the East African Community Customs Management Act (EACCMA) 2004, which stipulates that duties for transit goods should either be secured through bonds or paid at the point of entry. This situation, according to KIFWA, also violates World Trade Organization (WTO) trade practices, adding further complexity to the deadlock.
As a response to the mounting tensions, Clearing and Forwarding Agents have threatened to cease handling South Sudan cargo unless the SSRA formalizes a waiver for the demurrage charges. The industry now waits for assurances from authorities before resuming cargo operations in 2025.
