The revelation by the Financial Standard yesterday that most of the publicly listed companies have lost about a third of their profits since 2013 should get the Government worried.
Given the chest-thumping the Government has displayed any time World Bank’s (WB) ’Ease of Doing Report’ shows that Kenya’s business environment has improved, policy makers should address the mismatch.
The report shows improving ease of doing business in a country where profits are falling, companies are downsizing and new jobs are increasingly becoming hard to come by.
Most of the profits are concentrated in a few companies. That Safaricom and 11 listed banks command 86 per cent of all the combined profits of 56 companies point to skewed growth.
The analysis comes soon after another report showed the number of new foreign companies registered in the country has declined sharply since 2013, signalling a tough business environment.
Data from the Kenya National Bureau of Statistics (KNBS) showed 125 companies were registered in 2016, a decline of 68 per cent compared to 2013 when 400 foreign companies were registered. This casts doubt on the Government’s efforts to attract foreign direct investments (FDI), including policies aimed at improving the business environment. Government should seek for improved policies that can help to spread growth across the sectors. Business-friendly policies should go beyond the charade of improving the country’s ranking in the Ease of Doing Business Report.
This may be the only way President Uhuru Kenyatta’s ‘Big four plan,’ which includes food security, universal healthcare, job creation and low-cost housing could be actualised.
The current environment where the private sector is starved of credit, corruption is endemic, and there is a lack of political goodwill will not do much to help achieve these noble goals.
With the informal sector in the region standing at 70 per cent, one of the highest on the continent, improving polices for only a third of the population cannot do justice for millions of Kenyans whose dreams are being derailed by abandoned infrastructure and unofficial costs such as corruption.