Kenya is a bright spot in East Africa, a shining example of an investment hub for local and foreign investors.
Based on global economic activity and global surveys, the Kenyan government is committed to converting these into gains. An ambition to pursue an inclusive growth model that is expected to provide more than 1.3 million new jobs annually, the Kenyans understand the need to create a conducive environment for the private sector.
Over the past 48 months, the government has been working overtime to make Kenya an easy place to do business.
Taking a page out of competitive global best practice, Kenya checked its regulatory business environment and found the need to get rid of the red-tape that stifles entrepreneurship and creativity among citizens.
World Bank Group’s Doing Business 2018 Report that places Kenya at position 80 out of 190, from 92 last year, is a win in itself. For two consecutive years (2016 & 2017), Kenya emerged as the third most reformed country in the world, and in the 2018 report, as the third best in sub-Saharan Africa. And, out of the 11 indicators of ease of doing business, Kenya made six reforms during the year.
These reforms include merging formal procedures that small businesses need to comply with to register, reducing the cost of construction permits, enhancing electricity reliability. Other areas of focus are improving access to credit information; easier payment of taxes; and reduction in time for import documentation compliance.
Kenya is looking to place itself among the top 50 nations by 2020. The business reforms are aimed at increasing efficiency, local and foreign direct investments (FDI) to boost job creation. FDI levels have risen from $390 million in 2013 to $2 billion last year, making Kenya one of the most preferred investment destinations in Africa. Economists see a correlation, between business regulatory environments and a country’s economic fortune.
The manufacturing sector still lagging behind to reach its potential, while it has been outpaced by the services sector, it remains a key employer and an important investment sector. Complex and unfriendly regulation has been a big culprit but with 200 businesses registered daily, Kenya is certainly on the rise.
The eventual expectation is that reforms will trigger an increase in the registration of start-ups, ensuring their growth and further investments resulting in a direct increase in sales/turnover or net income.
All in all, the results are a true harbinger of change and testimony that the Kenyan government is keen to create a conducive environment for the private sector to prosper.
