“Our aim is to create a conducive environment for starting businesses, especially for SMEs. Asking a small business owner to trace an advocate and get a company seal is really a lot of work which discourages investment for many,” he explained/CFM BUSINESS
NAIROBI, Kenya, May 31 – The Industrialization Ministry, in conjunction with government agencies such as Kenya Private Sector Alliance (KEPSA) is working towards seeing Kenya’s rank on World Bank’s ease of doing business index hit position 50 by 2020.
According to Industrialization Ministry CS Adan Mohamed, measures have been put in place in the last 12 months towards the achievement of that goal.
“Last year, Kenya scored position 108 on the index out of 189 and we hope to be ranked at about position 50 by 2020. This is very reasonable considering the measures we have put in place,” said the Cabinet Secretary.
The government is since implementing reforms focused on re-engineering government processes, automation and streamlining service delivery.
Among the reforms made include the newly passed Companies Act that has seen the steps taken to register a new business reduce from 11 steps to 3 steps.
Steps scrapped off include stamp duty assessment on nominal capital and a declaration of compliance by an advocate. This consequently means that the services of an advocate are also no longer required. However, obtaining a company seal is optional.
“Our aim is to create a conducive environment for starting businesses, especially for SMEs. Asking a small business owner to trace an advocate and get a company seal is really a lot of work which discourages investment for many,” he explained.
But doesn’t the move make company secretaries and those pursuing Certified Public Secretary courses irrelevant?
“Their role has not been eliminated. There are plenty of companies, especially big corporations that still require their services. This move is especially meant to protect SMEs who may not be able to afford the costly process that was previously involved,” Mohamed explained.
As a result, James Nduna Musee, from the Department of State Law reported that 12,000 businesses have been registered since the law was passed in January this year.
Under this arrangement, those seeking registration for their businesses will only part with Sh10,000. The application is also unified in the sense that it combines company registration, Kenya Revenue Authority details, National Health Insurance Fund (NHIF) and National Social Security Fund (NSSF).
Another measure that has been taken to create an environment that encourages trade is reducing the period one waits to get electricity connection.
According to Kenya Power and Lightning Company, site visits at the design stage have been eliminated and the period of approving of design proposal from 21 days to 14 days.
Trade across borders has also been made easy for the business community. For instance, the ongoing implementation of Kenya National Electronic Single Window System will facilitate online clearing and release of cargo at border points.
“Automating this process means that inspection agencies can update the status of the goods in the system for other agencies to view and enable KRA to eliminate the manual import and export process during customs clearance,” Eugene Waluvengo from the Kenya Trade Network said.
KEPSA Deputy Chair Dr Laila Macharia said that measures such as the launch of the iTax portal by Kenya Revenue Authority, which had made paying taxes much convenient was contributing towards achieving the goal.
Other measures pursued by the Ministry include dealing with construction permits. Nairobi City County for instance has reduced the cost of obtaining building permits from 1.1 percent of the construction cost to 0.5 percent by passing the Nairobi City County Finance Act 2015.
That is not all. Reforms on property registration, resolving insolvency and enforcing contracts have also been addressed.
