NAIROBI, Kenya, Jul 27 – The government has been urged to simplify business registration and investment procedures for domestic investors in order to reduce bureaucracy and corruption in their operations.
Survey findings from TNS Research International show that Small and Medium Enterprises (SMEs) particularly those in the rural areas are more susceptible to bribery and corruption which the organisation\’s chairman Mutahi Kagwe attributed to increased bureaucracy.
"If we want the corruption index to go down, we need to create a \’one-stop-shop\’ for the retailers as well so that when they walk into the city council offices, they can get all their licenses in one office or one desk," he argued.
Mr Kagwe was reacting to results of the \’Retailer Confidence Index of June 2010\’ which showed that the number of retailers who claimed to have been asked for a bribe between April and June, when the survey was carried out, had gone up from 17 percent to 25 percent.
"I think there is a direct correlation between bureaucracy and corruption. If you look at the number of licenses the small retailers are supposed to get, it would take them six months to get that job done so they prefer to give somebody a bribe to get them (permits) in a few days," he said.
According to SMEs, the same support systems and treatment given to foreign investors such as tax-based incentives and investment allowances, would help bolster local investor confidence and investments to spur development.
The SME sector employs nearly 80 percent of Kenya\’s workforce and contributes about 20 percent to the country\’s Gross Domestic Product (GDP) but it has time and again complained that it is not given the attention it deserves.
Although bribery and corruption indices were on an upward trend however, this has not hurt retailers\’ confidence in the outlook of the country\’s political and economic environment at least in the next six months.
Many continue to have a positive outlook for the country and therefore the profitability of their businesses, the firm\’s Director of Retail Trade Anna Ndung’u said when the research agency released the results of the study which sampled responses from 494 shop and kiosk owners from seven provinces expect North Eastern.
But although respondents were not asked to give reasons for their answers, the two officials said the ongoing regional integration, constitutional review process, infrastructure development and efforts to improve the business climate could be cited as some of the factors that had contributed to the increased optimism.
"It is very good when majority of the people are positive about the future of their country and this could indicate their willingness to invest more and also the willingness to continue doing business in Kenya," Ms Ndung’u said.
The survey, which was adapted from the USA index, was premised on the fact that retailers\’ views are most likely to reflect consumer activities on the ground.