A recent World Bank report has indicated that doing business in Kenya is becoming unattractive.
The World Bank report, ‘Doing Business in Kenya 2012 Report’, benchmarks Kenya against 183 economies around the world. It indicated that the country’s performance in ‘Doing Business’ had declined among the 183 examined. Kenya ranked number 109 this year, down from 72 in 2008. It also ranked the country at number 166 in paying taxes, 141 in trading across borders, 133 in registering property and 132 in starting business.
The report is a cause for worry. This is because the rankings have a direct impact on how Kenya is perceived as an investment destination. As Prime Minister Raila Odinga said last week, the situation must be addressed to ensure the country remains on a sound economic path and make it an attractive destination.
To begin with, he said, there must be reduction in risks of doing business in Kenya for the country compete effectively in the global market.
The PM observed that corruption, lack of access to finance,and inefficient Government bureaucracy are the three most problematic factors.
There have been complaints on high licensing costs. Business regulation has been used as a source of revenue, which has in turn discouraged potential investors.
As the country continues to boast of political reforms and regional integration that give hopes of change, this alone is not enough incentive.
A low-cost business environment is a must, and this should go hand in hand with good infrastructure and, of course, a corruption-free field. Government bureaucracy must also be relaxed to ensure investors have minimum or no hassles at all when deciding to locate to Kenya.
A one-stop in licensing businesses would be the sure way to go.
