Private sector calls for fewer trade laws

July 28, 2009
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, NAIROBI, Kenya July 28 – The Private sector is calling for the harmonisation of the different business regulators, especially those under the  Ministry of Local Government, whose regulations usually compete with hose of the Central Government.

Speaking during the Business Regulation Bill and Regulatory Reform Strategy Workshop, Kenya Private Sector Alliance (KEPSA) Chairman Patrick Obath said, the disjointed nature of regulations introduce by local authorities results in high fees being levied on prospective businesses.

“Each regulator works in isolation and sometime brings in either complementing but most of the time competing legislation making doing business in Kenya very expensive,” MR Obath explained.

He sighted the example of the Single Business Permit which was intended the ease the burden of doing business in Kenya but has now been overtaken by events.

“If you ask any businessman whether it has worked you will get a resounding no because of the uncoordinated regulations which contribute to the high cost,” the KEPSA official said.

“Once the central government has reduced its business permits the local government increases its own counteracting what is intended to be a noble objective.”

He also blamed local authorities for introducing regulations aimed at raising revenue rather than regulating the operations of the business sector saying it was ‘counter-business’ because it implied one had to pay to be regulated.

The plethora of licenses has been seen as a barrier to new investments in the country and contributes to the slow economic growth, high unemployment and poverty.

It has also been seen as the greatest inhibitor to local investment by aspiring entrepreneurs who find it hard to meet the different licensing regimes.

“The number of Kenyans who want to invest and have been frustrated by the number of barriers just to set up a simple business is actually discouraging. This drives people into the informal sector where they don’t have to comply,” Mr Obath noted.

Mr Obath called on the government to fast track the implementation of the regulatory reform strategy into law that would streamline licensing operations in the country.

During the conference Finance Secretary Mutua Kilaka sought to assure the private sector that the government was working towards reducing burdening business regulations that impose high risks and costs on formal businesses that affect economic growth.

The government has also established an electronic regulatory registry which will host all existing licenses and any licence not in the registry will be deemed illegal and withdrawn.

The government has so far reviewed over 1,325 business licenses and fees, simplifying 379 while eliminating 314 which were viewed irrelevant.

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