Kenya aims to improve business climate

September 30, 2009

, NAIROBI, Kenya, Sept 30- Kenya’s global ranking as a favourable business climate could improve significantly if local authorities adopt practises to improve business regulation.

A World Bank report dubbed ‘Doing Business in Kenya 2010’ indicates that having transparent and efficient regulations at the municipal level would make it easier for entrepreneurs to start and operate businesses which would then have overall benefits for the country.

“Implementation of these reforms could push up Kenya’s position in the global ranking by 17 places,” said the Bank’s Acting Vice President for Financial and Private Sector Development Penelope Brook.

The study, which mainly focused on regulations and their enforcement in 11 local authorities in the country, placed Kenya in the 95th position out of 183 economies surveyed.

The reform measures she pointed out included setting up of a ‘one-stop shop’ concept to ease the issuance of business permits, enabling online applications and cutting down on the number of procedures required before setting up a business.

Ms Brook observed that executing those reforms – which effectively means improving business start ups – would not only enhance economic growth and investment rate but would also provide employment opportunities for women and youth like it had done in countries such as Mexico where such changes have been implemented.

The study ranked Narok as the best town to do business out of the 11 that were featured. It looked at four indicators; starting a business, dealing with construction permits, registering property and enforcing contracts.

Although it performed poorly in the ease of starting a business, on average Narok’s overall sub national rankings improved, supported by its good performance in the other indicators, according to Ms Brook.

Nairobi City on the other hand was 10th overall, with its main undoing being the time it takes to register property and enforce contracts.

Present at the launch was Deputy Prime Minister and Minister for Local Government Musalia Mudavadi who lauded the “Doing Business’ indicators as valuable to the local authorities as it would make them transform into investor friendly councils.

“Kenya needs to deliver a high quality, low cost business environment. But more particularly, we must reduce the burden of regulation on our businesses,” he said although he regretted that the dream of a single business permit had not been realised.

He however expressed optimism that the findings would provide the government with a basis to develop intervention plans for strengthening the local authorities which from a private sector’s perspective have a very negative image.

Besides the punitive bylaws that the councils still implements, the business community have to deal with the harassment from its ‘askaris’.

The Minister however assured that they were willing to work with all stakeholders to address the specific concerns of the private sector and contribute towards improving Kenya’s competitiveness.


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