Remove all obstacles to business growth

A story is told of the dog that lies in the cows’ feeding trough, neither eating the fodder nor allowing the cows to eat to their fill. It’s just there, being a nuisance at the expense of the hard-working bovines.

I use this analogy because some of our government agencies, instead of helping business to thrive, their work is to place traps and obstacles all over.

They wait furtively in the shadows and shout gleefully ‘gotcha!’ whenever one of their prey falls into their bureaucratic trap.

Kenya is regarded as a developing country (as opposed to our poor neighbours classified as least developed countries ha ha!).

We should be doing better in putting in place policies that will push the development agenda a notch higher. Let the cows eat their fodder in peace.

We should not only be encouraging local investments but more so, foreign direct investments that come with a bouquet of advantages. FDI brings job creation, technology transfer, new strategic thinking and of course foreign exchange. Let’s take the recent buy-out of EABL by Japanese firm Asahi. This is a big player globally in the brewing industry, with a revenue of 19 billion dollars. The firm is buying out EABL operations in Kenya, Uganda and Tanzania.

This is the kind of company you want in your corner. They have what it takes to push EABL onto a different plane of operations. But their entry into the regional has been beset by numerous obstacles, some to do with court injunctions which I am not at liberty to dwell on. In the two neighbouring countries however, they have acquired all necessary approvals from their respective regulators.

Not so in Kenya. Apart from the litigation, they have been facing a hurdle with one of the key regulators.

There is a regulatory body known as the Competition Authority of Kenya. It is supposed to ensure companies operating in whatever sector have a level operating field and that competition among them remains fair. They are also supposed to ensure firms do not engage in any price fixing so that prices remain market driven. In other words, CAK is supposed to be a friend to business.

In our case, it does appear, based on past performance, that this regulator thrives in making life as difficult as possible for businesses to operate.

In the Asahi case, the government stands to pocket over Shs40 billion in capital gains tax. That’s a lot of money by any standards. For a government that has gone into high gear in securing funds to bridge the budget deficit, this windfall would plug quite a few holes. But for some reason, CAK seems to think totally differently. I know they must keep themselves busy but they should do so within reason.

This is where the powers that be should come in and use executive fiat to demand that the hurdles be removed. I am using the Asahi case as the most recent example but there are numerous cases where government agencies have been a hurdle.

My thinking is: the EABL business is simply changing hands. They are not buying out rivals or making it more difficult for those already in the market to operate. The status quo remains; all that’s changing is the ownership structure. There is no reason whatsoever for the CAK to throw all manner of spanners in the works, muddy the waters so to speak for no good reason.

We must infuse a culture of being business friendly to our regulators. They should not view everything from a rent-seeking perspective but rather from the lens of business growth.

And we have many good lessons. There was a time when registering a business in Kenya for instance was tantamount to an obstacle course. It could even take a year and numerous bribes to get a certificate.

Today, we are used as a case study on the ease of business registration. Now, we should clean up other obstacles to doing business. Only then can we expect to move up the ladder to Singapore heaven, one step at a time.

-The writer is a communications consultant