Inside titanic battle for control of influential business lobby

KNCCI president Richard Ngatia meets delegates from the Coast region in Malindi earlier this month as he seeks re-election. [Nehemiah Okwembah, Standard]

Businesses are usually wary of elections. Right from national to the ward level, elections have a way of, at the very least, disrupting businesses.

But this time round, many businesses are all ears and eyes. This is as members of the Kenya National Chamber of Commerce and Industry (KNCCI) go to the polls to choose new county and national leaders.

One June 8, they will elect the President of the Chamber, a contest that has turned two allies into rivals.

Richard Ngatia, the current president, is out to defend the seat, while his Vice President Dr Eric Rutto is seeking to unseat him.

The two men say they are keen to ensure that the Chamber reclaims lost glory. The Chamber, set up in 1965, was a formidable name in local and international business circles.

But perhaps because of its success and greed among a section of its leaders, it would degenerate into a fighting arena as different factions sought to control operations.

For years, KNCCI was known for infighting, which created a void that gave rise to other business lobbies.

The fights were especially fierce in the decade to 2013 as different factions lay claim to the Chamber’s leadership.

So nasty were the wrangles that Ufanisi House, KNCCI’s headquarters, used to be manned by armed police to keep peace among the different sets of officials who claimed to be the legitimate office holders.

Fights would erupt without notice. The government cut the Chamber’s revenue streams, including withdrawal of the lucrative mandate to issue Certificates of Origin to exporters.

The mandate was transferred to the Kenya Bureau of Standards but KNCCI leaders continued to issue the certificates, which were at the time of no use to exporters.

It was not until 2014 that the Chamber relaunched and a caretaker board was put in place through government intervention. The board was led by businessman Kiprono Kittony.

Mr Kittony at the time noted that during its glory days, KNCCI was among the most influential entities in the countries to the extent that people would hang the Chamber’s certificate in their business premises alongside that of the president.

Over two three-year terms, Mr Kittony steadied the ship, raising hope of a return to the glory days.

Messrs Ngatia and Rutto are running largely on promises to lift SMEs.

The micro, small and medium enterprises form about 70 per cent of KNCC’s membership, more or less a reflection of the economy, with the sector being the largest employment creator.

Mr Ngatia is seeking to continue with what he says has been a successful run by KNCCI over the last four years.

He says he has overseen a smooth term devoid of the legendary wrangles while also managing to successfully devolve the operations of the Chamber to all the counties.

Mr Ngatia says during his tenure, he has steered the signing of numerous Memorandum of Understanding with other chambers, a move aimed at expanding trade between Kenya and other countries.

His deputy, Dr Rutto, also shares in these achievements being the second in command. Insiders say the two leaders had hitherto enjoyed cordial relations until Dr Rutto recently launched the bid to unseat his boss.

He says that the Chamber could have done a lot better and has a set of ideas that he says he would implement if elected the President.

Top among them is an enhanced role for women in business at KNCCI while asserting the independence of the Chamber from the county and national governments so as to effectively lobby for the interests of the business community.

Goods importers

He is also enticing the counties, saying he plans to increase their share of the fees that the Chamber earns from Certificate of Origin issued to importers of goods to Kenya if elected.

Dr Rutto also says he will lobby for small businesses to have a much more improved doing business environment, including lower tax regimes as well as prompt payments by state agencies.

On the latter, he says he will lobby for the review of procurement laws to criminallise non-payment of money due to contractors.

The two men have been traversing the country as they woo delegates, convincing them that they have the best interests of businesses at heart.

They are especially focused on the micro and small enterprises across the country, which make 70 per cent of the Chamber’s membership.

Mr Ngatia is riding on the reforms that he has instituted over the last four years, and says he will continue delivering on his agenda with a special focus on improving the business environment for SMEs.

“My commitment to the growth of SMEs is unwavering. We will strengthen facilities and business infrastructure through partnerships with county governments to establish Special Economic Zones in each of our 47 Counties,” he said.

Mr Ngatia said the first term was marked by major milestones despite shocks that businesses had to endure such as the Covid-19 and the prolonged drought that significantly reduced agricultural activity.

“We have led the Chamber during the most difficult time of Covid-19 pandemic, and we were able to mobilise financial partners to offer loans to our members making sure business had cash flow,” he said.

“Businesses got soft loans and many were able to stay afloat. This benefited a lot of MSMEs that are members of the Chamber and enabled them to stay afloat. I can assure you that better days are ahead of us as we lobby for a better business environment.”

During his tenure, Mr Ngatia noted, Kenya inked major MOUs with chambers from other countries. He added that as President of the Greats Lakes Region Chambers of Commerce, he secured opportunities for the Kenyan investors in the region.

Mr Ngatia’s former ally now turned competitor, Dr Rutto, noted that while it has posted “fair” performance in recent years, KNCCI did not go full steam in fulfilling its mandate. This has seen businesses lose faith in the Chamber and even quitting membership.

“As a result, businesses have sometimes felt neglected with some abandoning the business lobby altogether. At times, the chamber has found itself too close to national and county governments, making it hard for it to champion for the rights of the business community,” said Dr Rutto, a medical doctor and businessman.

He also noted that the collaboration between the Chamber and the government at both county and national levels could have been better.

This is among his areas of focus, where he plans to further empower the County Chambers.

He has promised to increase the share of proceeds from revenues collected from the certificates of origin to 40 per cent from the current 20 per cent.

This, Dr Rutto noted, has in the past been agreed on but never implemented and continued denying county offices an opportunity to become sustainable.

He also said he would reinstate the women in the business office.

“We will also include it in the chamber constitution to allow our women members participate better in the Chamber’s affairs,” he said.

On the thorny issue of pending bills to suppliers, Dr Rutto has vowed to push for a review of the Public Procurement and Disposal Act.

He wants the law to have clauses that require government agencies to make prompt payments on delivery of goods and services.

The challenge of state agencies delaying payments due to businesses has been the growth of pending bills.

The different national government state agencies together with county governments owe contractors a combined Sh600 billion.

“This will ensure there are no pending bills going forward while the existing bills will start to earn interest,” he said, adding that he would also push for the review of taxes charged across counties and national government to encourage and improve trade while ensuring businesses remain competitive. 

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