Counties have come under heavy criticism from the Industry and Trade ministry after officials accused the devolved units of frustrating investors looking to put up warehouses for their enterprises.
Cabinet Secretary Peter Munya said the counties had become “a weak link in bettering the country’s investment climate” through lengthy delays in approving building plans, which have locked up “billions of shillings” in fresh capital.
“The national government can only do much to bring investors in but firms get stuck because they have done their building plans, which lie in those county offices. They are not being approved,” he said without immediately providing the numbers.
“We have statistics to back this position. We have also to tell counties to be proactive in terms of supporting investments in the country.”
Kenya’s automated construction permit management system has been down since July, further battering the building and construction sectors already reeling from reduced flow of credit.
Architectural Association of Kenya and the Kenya Property Developers Association said in September the e-construction permit system hitches had hit Nairobi, Nakuru and Mombasa hardest.
Kenya ranked position 105 out of 190 countries in the World Bank’s Doing Business 2020 index, which is based data up to May 2019, an improvement from number 128 a year earlier.
The report, released in October, said it takes 159 days for a developer to get a permit through 16 procedures, costing one 2.8 percent of the value of the property.
“For God’s sake do something with the money you have by supporting investments to take off because that’s how revenue will come to generate more money. I am told here in this city and the neighbouring counties, there’s a backlog of building plans that are not being approved and people are waiting and suffering,” Mr Munya said.
“Some of them have borrowed money to put up these investments.”
Latest data from the Central Bank of Kenya shows credit to the building and construction sector for the period through July plummeted by Sh6.3 billion, or 5.37 percent, to Sh111.1 billion, while that to real estate rose a measly 0.45 percent, to Sh378.6 billion.
Nairobi had approved plans valued at Sh48.54 billion in the first three months, Sh11.57 billion, or 19.24 percent, less than Sh60.57 billion in the same period of 2018, Kenya National Bureau of Statistics data shows.
“We are not giving them (counties) directives, but we are saying they have to be proactive,” said Mr Munya.
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