Kenya PM roots for better business climate

March 22, 2010
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, NAIROBI, Kenya, Mar 22- Prime Minister Raila Odinga has proposed that the government adopts a new approach in its dealing with the private sector that will enable the two partners to achieve the goal of ensuring a conducive business climate for the country.

At the fifth round table forum with the private sector, Mr Odinga said there’s a need to develop an action plan which will spell out the strategies that need to be undertaken and clear timelines that they need to be achieved in and monitoring systems to facilitate the tracking of the programs’ implementation.

“I have proposed that as we continue to evolve and refine this important engagement, there is need to borrow from international best practice on Public Private Dialogue. One of the successes has been a cluster based approach to economic development,” he said.

The round table forum through which the private sector engages with the Premier and other senior members of the various ministries was started in 2008 to discuss and find lasting solutions to the various cross cutting issues that hinder the effectiveness of the private sector.

The meeting is guided by the National Business Agenda in which issues of concern are covered under several thematic areas.

While Mr Odinga reiterated the government’s commitment to create a favourable climate for doing business, he said a new approach would enable all parties to focus on the relevant bottlenecks and address them effectively.

“There is therefore need for all the important players in the cluster to meet and discuss the best way of achieving our Vision 2030 targets. The Office of the Prime Minister will provide support in the preparation and tracking of the Action Plan,” he said.
 
Mr Odinga’s remarks were supported by David Bridgman an advisor with the Investment Climate Advisory Services of the World Bank Group who suggested that Kenya’s Public Private Dialogue should embrace the cluster-based approach where the government could support various industries until they can stand on their own.

The PM urged the Finance Ministry to finalise the proposed Business Regulation Bill and the Regulatory Reform Strategy which would create a competitive and predictable regulatory business environment that can help attract prospective investors into the country.

At the same time, he assured the private sector that the government would be on the look out for any agency that was out to fleece them through such means as the introduction of unjustified taxes.

In this respect, he singled out the Kenya Bureau of Standards for trying to impose the fuel inspection fee which caused inconveniences and led to the abrupt increase in the pump prices.

“The recent so called ‘testing fees’ are accidents but we have already taken the corrective measures. The Kenya Bureau of Standards must only charge fees for services rendered to industry; it must be a facilitator of business and not an obstacle. We will ensure that KEBS does not turn into a rogue institution that inflates pain to business,” he said.

While lauding the commitment that the government had shown in the discussions, Kenya Private Sector Alliance (KEPSA) Chairman Eng Patrick Obath however said the engagements that the business community has with the government should be entrenched in the Constitution to ensure continuity and success of such programs.

In the last one year, the private sector has witnessed the implementation of several ‘quick wins’ such as the gazettement of the single business permit, enactment of the Anti-counterfeit Act, reduction of Value Added Tax on fuel from 16 percent to 12 percent as well as the implementation of the 24-hour port operations.

The business community is able to keep track of these programs through the Ministerial Stakeholder Forum meetings held bi-monthly between the KEPSA Sector boards and their line ministries which also provide the platform to address specific issues that require urgent intervention.

Mr Obath however lamented that while some ministries had shown commitment towards this process, others such as the Education, Water, Trade and Local Government, Agriculture and Fisheries had not shown much enthusiasm towards the process.

While he called upon such ministries to be proactive, the Chairman also expressed fears that public private partnerships would not be taken seriously until the Public Sector Stakeholders Policy of 2008 is enacted.

At the same time, the members of the private sector heard that the government plans to review the tax administration regime in the next three months to facilitate business people.

Through his Permanent Secretary Joseph Kinyua, Finance Minister Uhuru Kenyatta hinted that Treasury would in the next budget put in place measures that will ensure that tax issues are addressed.
 

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