By XN Iraki
Kenya’s “ ease of doing business” is now ranked 109th out of 183 countries. That was a slip from 106 in 2011. Meanwhile, Rwanda improved from number 50 to 45 for the same time period.
The World Bank’s report ranks countries on how easy it is to open a business and run it, from registering to filing taxes and getting credit. The measures are time taken and the cost.
It takes about 33 days to start a business in Kenya and three days in Rwanda. In Kenya, there are 11 procedures that involve shuffling from one ministry to the other. But in Rwanda, there are only three.
More detailed analysis of the report shows interesting patterns. The cost of starting a business in Kenya is 37.8 per cent of per capital income or about Sh25,000. In Rwanda, the cost is Sh2200.
Our ranking is worse for starting a business, paying taxes, getting electricity, registering property, trading across borders and enforcing contracts. But we are ranked among top 10 in the world in getting credit — an interesting paradox; you get money but find it hard to invest it.
For Rwanda, the worst ranking is in getting construction permits, trading across borders and resolving insolvency. We are at par in getting credit.
All this fog of data tells a simple story of how bureaucracy has held a country‘s economy hostage. It is not that Kenyans cannot invest and develop the country, but the environment is not conducive.
To any ordinary Kenyan, the data is surprising and a paradox; why should it be getting harder to do business with Mpesa, Internet, mobile phones and more graduates than any other time in history? Should life not be getting “easier”?
Anyone who has started a business knows the evils of bureaucracy. The procedures in starting a business involve either the local government or central government; the ranking says nothing about the entrepreneur or the businessperson.
How can starting businesses be so hard in a country whose number one problem is unemployment? What can we do about it? It is possible that our attitude towards businesspeople, better called entrepreneurs is negative. We therefore put roadblocks for them. Any time there are chaos, entrepreneurs bear the brunt.
May be we do not see the connection between setting up a new business, job creation and economic growth. No wonder most people seek employment from established businesses, preferably big corporations. “Someone else” creates the job, not us.
Interestingly, Business Administration is one the most popular courses in our universities. Whose businesses are the graduates supposed to administer?
Needless to say, most jobs in any economy are created by the private sector. Kenya has about 600,000 civil servants including teachers. If everyone in civil service is sacked, only 600,000 jobs would be created, a drop in the Ocean.