Legal, regulatory reforms have eased things for SMEs

Kevit Desai. [David Njaaga, Standard]

The ease of doing business reforms in Kenya have had the most profound impact on the growth and transformation of small businesses for the last six years.

In the past, government policies have placed a disproportionate burden on small firms and entrepreneurs, for example, due to the significant fixed costs and processes that can be associated with compliance.

Partly due to such concerns, the growth of small businesses in the country has been impaired, even though the informal sector accounts for a good share of Gross Domestic Product growth.

Last year, the country had an overall small business count of 12 million. Over 200 businesses were being registered daily compared to 30 businesses six years ago.  Over 600,000 new businesses and hundreds of multinationals have been registered since 2014.

These are tangible results of the country’s strategic thrust to reform the legal and regulatory environment for small entrepreneurs. Over these years, reforms have been made in 10 reform indicators, including starting a business; dealing with construction permits; getting electricity; registering electricity; getting credit; protecting investors; paying taxes; trading across borders; enforcing contracts and resolving insolvency.

In general, the reforms and transformation efforts have involved a whole-of-government commitment and approach in close collaboration with the private sector.

This work is reflected in 1,256 engagement sessions with the private sector, 1,179 delivery sessions on the reform agenda, 216 Cabinet-level engagements and many reform delivery sessions.

Out of this, there have been 200 government processes that have been re-engineered.