Connect with us

Hi, what are you looking for?

The report calls for the strengthening of the competition Authority to foster competitive markets in Kenya and contribute to achieving Vision 2030/FILE


WB says Kenya has non-competitive regulations for business

The report calls for the strengthening of the competition Authority to foster competitive markets in Kenya and contribute to achieving Vision 2030/FILE

NAIROBI, Kenya, Jan 4 – The World Bank has urged Kenya to remove restrictive market regulations that have dampened growth in the country.

In a new report dubbed Unlocking Growth Potential in Kenya: Dismantling Regulatory Obstacles to Competition, the World Bank says regulations that restrict competition are more prevalent in Kenya than in other middle-income countries.

It says that the regulations that restrict healthy competition and distort markets and business decisions have been having a negative effect on the country’s competitiveness and growth.

“Kenya’s business environment has as a result been weakening and limited the private sector’s ability to grow, create jobs and contribute to economic development,” World Bank notes.

Some of the sectors the report highlights are in the sugar and tea sectors that have unreasonably high trade barriers, such as excessive import duties and non-tariff barriers (NTBs), and restrictive domestic regulations.

“Fines are currently capped at Sh10 million for restrictive trade practices, particularly horizontal agreements, regardless of the size of the firm involved or the nature of the offence. A common international practice is to the set the maximum fine at 10 per cent of the turnover of the firm involved,” the report notes.

The report also recommends moves such as opening markets and removing anti-competitive regulations and effectively enforcing competition law.

“Opening up the markets to private investment and rationalising regulation will improve market performance and attract investments in industrial crops. For example, in the case of pyrethrum, a dramatic decline in production has been linked to regulatory issues that eliminated entry into the industry,” the report notes.

The report calls for the strengthening of the competition Authority to foster competitive markets in Kenya and contribute to achieving Vision 2030.

“Regulatory obstacles to competition include inappropriate rules and regulations that alter entry conditions in a market, create discriminatory conditions among players, limit businesses’ strategy options, and impede consumer choice. Ideally, the principle guiding the regulatory setup would be selecting the instrument that would cause the least distortive effect on competition in the market and one that would create incentives for firms to deliver the best deals for consumers,” says the report.

Advertisement. Scroll to continue reading.

The World Bank however acknowledges that Kenya has indeed made significant progress in strengthening its competition enforcement framework to enable the CAK to promote competition and to protect consumers from anticompetitive market conduct and potentially harmful mergers.

Despite these advancements, the bank says that there remain areas which should be addressed in order to improve competition enforcement.

Click to comment

More on Capital Business

Executive Lifestyle

NAIROBI, Kenya, Mar 12 – The country’s super wealthy individuals are increasing their holding of bonds, gold and cash, a new report by Knight...

Ask Kirubi

NAIROBI, Kenya, Mar 9 – Businessman and industrialist Dr. Chris Kirubi has urged members of the public to exercise extreme caution when making any...

Ask Kirubi

NAIROBI, Kenya, Mar 24 – Businessman and industrialist Dr. Chris Kirubi is set to own half of Centum Investment Company PLC, following a go-ahead...

Ask Kirubi

It is without a doubt that the COVID-19 pandemic has caught the whole world by surprise. Although its full impact is yet to be...


NAIROBI, Kenya, Jun17 – Kenya’s tea leaves manufacturer Kericho Gold, has been awarded the Superbrands Seal by Superbrands East Africa for their quality variety...


NAIROBI, Kenya, Mar 18 – Commercial Banks have been ordered to provide relief to borrowers on their personal loans, with loans eligible from March...


NAIROBI, Kenya, Apr 13 – As the local telecommunications industry gears up to roll out 5G networks in the country, the Communications Authority of...


NAIROBI, Kenya, Mar 22 – Airtel Kenya is offering free internet access for students in order to enable continued learning at home in the...