Lesser issues overshadowed GES 2015

The Global Entrepreneurship Summit (GES) 2015 that was held in Nairobi last week, and which brought the most powerful man in the world to Kenya, is no doubt a milestone.

The visit by President Barack Obama was however overshadowed by issues that are less important to Kenya. Not least is the news report from Cable News Network (CNN) that depicted Kenya as a hotbed of terror.

This news item was painful because the coming of President Obama should have signalled to investors that Kenya has a safe and secure environment for investment. However, the resilience of the Kenyan people will no doubt overcome such negative sentiments.

Mr Obama's ancestral linkage, inasmuch as it is something to be proud of, should not have been the highlight of the visit. The spirit and purpose of the GES was to promote entrepreneurship, particularly for the youth and women. I believe that is where the emphasis should have been.

In the pre-summit conference at Kenyatta International Conference Centre (KICC), the innovative flair among young Kenyan men and women manifested itself. One thing is clear, the rise in the middle class in Kenya is unstoppable and the credit goes mainly to the degree of innovativeness and resilience of the youth.

The ideas presented at KICC included one by a women group from Isiolo that intends to add value to camel meat and milk products. A largely untapped market indicates the future of the group is bright and shall in the long run contribute to Kenya's food basket.

If jobs have to be created, it should not be through a variation of Kazi Kwa Vijana initiative or subsidised labour, but through government. Jobs are easily created through innovative and sustainable entrepreneurship. Most of the enterprising youth and women in Kenya face challenges that prohibit them from starting businesses.

That is why I agree with Deputy President William Ruto's argument that demands by banks for collateral such as land title deeds and proof of ownership of fixed assets inhibits entrepreneurship.

For the youth and women to be empowered, a process of inclusion in the banking system must be developed. A good example of inclusion is making it possible for pastoralist communities in Northern Kenya to access funding for their businesses. The only assets in their possessions are perishable and banks dread the idea of lending money to such businesses because they are considered risky.

Yet this kind of business, if well planned, has the potential of increasing the volume of trade in Kenya and substantially contributing to our Gross Domestic Product (GDP).

Under the leadership of President Uhuru Kenyatta, the Government has proactively instituted the legal framework for the youth and women to access government tenders through the 30 per cent gender rule in procurement.

Nevertheless, most of the intended beneficiaries hardly benefit since access to capital is a hindrance. Kitties such as the Youth Fund, Uwezo and Women funds have little capacity to absorb the demands of youth and women for sufficient support to start sustainable businesses.

The 30 per cent gender rule cannot succeed if incentives to start a business are lacking. Most youth and women register companies that are avenues for other existing companies outside the target group to use to get additional contracts, thus reducing the intended target group to mere brokers in the whole process.

The government also needs to create a favourable regulatory environment to promote businesses.

The law as it is now burdens starters beyond their capacity. The process of registering a business takes much longer than necessary. For starters, the cost of registration alone is a put-off.

To register a company and plan properly, requires hundreds of thousands of shillings that women and youth aspiring to start businesses don't have, not forgetting the bureaucracy involved.

A concept similar to Huduma Centre is required for registration, renewal of licences and payment of taxes. Oh yes, the tax regime is also very punitive. Double and sometimes triple taxation erodes the gains small businesses make.

The example of the women group from Isiolo that has added value to the production of camel milk and meat products also has the potential to generate more than Sh3 billion every year, given the right environment to do their business.

Mr Guleid is the Deputy Governor, Isiolo County