NAIROBI, Kenya, Sept 16 – Nairobi City County has not processed any construction permit for the last two months due to downtime issue on the electronic permitting systems, adversely affecting projects in the building and construction sector.
According to the Architectural Association of Kenya (AAK) and the Kenya Private Developers Association (KPDA), this has affected the practice of professionals in the built environment as they cannot proceed with their projects in construction.
The delays are also hurting the Kenyan economy.
Nairobi county leads in the contribution of Kenya’s GDP by contributing 21.7 percent of the national GDP according to KNBS’ Gross County Product report 2019 with the Development approvals, being the second highest collector of revenue for the County.
In the KPDA/NCCG report on building approvals for June 2019, revenue collection was noted for development approvals of Sh53,857,328.00.
The technical issues started in May 2019, after systems in the county started experiencing hitches and eventually collapsed.
This is after the contract between the Nairobi City County and the service provider – Jambo-Pay ended.
The construction e-permitting system was a solution developed jointly between the county government, the International Finance Corporation and the Architectural Association of Kenya, with the objective of enhancing efficiency and accountability in the processing of construction permits in the city.
This system is a key factor considered by the World Bank Group in ranking economies on the Ease of Doing Business report.
In determining the efficiency of a construction permitting system, World Bank evaluates the number of procedures required to obtain a construction permit, the amount of time it takes to obtain a construction permit, the cost of the construction permits as well as the quality control measures that include project inspections.
Since 2011, four counties have been able to automate the construction permitting procedures – Nairobi, Mombasa, Kisumu and Kiambu.
“The Associations are aware that that the electronic construction permit system in other counties have not been functioning efficiently. Therefore, delays in issuance of building permits and development approvals,” KPDA Director Gikonyo Gitonga said.
The Associations also reveal that most applicants usually must wait for between 3 months to 2 years. In some counties, the issuance of an invoice after submission of application takes up to 45days.
This comes against a finding by Knight Frank Kenya Market Update report for the first half of 2019 indicating that the value of building plans approved in Nairobi County decreased to Sh48.54 billion in the first quarter of 2019, a 19.2 percent drop from Sh60.11 billion in a comparable period in 2018.
“The collective financial impact this has in the public and private sector, cannot be overemphasized. Normalizing of operations of the system, is to the joint advantage of the Building Industry and the County Government. It is worth noting that the county has experienced a decrease in revenue collection in the first half of the year, as compared to 2018 and it is imperative that the system is regularized to avoid further decline,” Mugure Njendu, President, The Architectural Association of Kenya.