Industrialists seek review of levies, licences

Cabinet Secretary, Ministry of Industrialization, Trade and Enterprise Development Betty Maina listens to Eng. Naresh Mehta of Prisma Technics during Prisma IPM local manufacture Launch. [Wilberforce Okwiri, Standard]

Manufacturers want the government to scrap dozens of duplicate licences and levies at the national and county levels to enable the sector to attract more investments and recover from the effects of Covid-19.

This is according to a manifesto by the Kenya Association of Manufacturers (KAM) that highlights the heavy regulatory burden experienced by business owners, with at least 235 licences required for compliance across key sub-sectors.

Operators in chemical manufacturing face the largest burden, where 33 licences are required before opening a shop. Those dealing in metal and paper production need to pay for 22 and 27 permits before they can conduct business.

“Manual renewal of licences is inefficient, increases the cost of doing business and creates loopholes for corruption and fraud,” says KAM in the Manufacturing Manifesto. “Approval processes for construction are bureaucratic, leading to the stalling of projects and there are no fixed timelines for each of the approval stages.”

Operators in the food and beverage industry are required to comply and pay for up to 41 permits, while those in the pharmaceutical and automotive sectors need up to 15 permits each. 

According to KAM, firms experience cumbersome and expensive processes during the registration of their business and complying with taxation, with a high degree of fragmentation of licences required across the various counties.

“The next administration needs to reduce the number of regulations, bring down the cost and time spent on compliance and consolidate regulators,” it says in the document that seeks to push politicians seeking elective seats to put more focus on policies to grow the economy.

Data from the UN Industrial Development Organisation indicates that Kenya lags behind peers in the level of competitiveness and value of exports due to high operational costs that undermine its pricing in global markets.

Between 2015 and 2020, Kenya saw manufacturing exports as a share of all merchandise exports average 30 per cent in the period under review before dropping to 28 per cent as at 2020.

KAM now wants the incoming government to ensure the regulatory environment is more predictable.