Kenya has once again recorded some achievement in improving the business environment.
The latest international ranking of the investment climate published by the World Bank puts the country at position 56 out of 190 countries surveyed, up from 61 last year. This is encouraging and the tempo has to be maintained and enhanced.
Essentially, the “Doing Business” report investigates the types of regulations in every country that relate to investment, determining whether they are restrictive or facilitative.
Often, business environments are soiled by restrictive regulations and policies that make it difficult for investors to put their money in an economy. Thus, the ease of doing business is a vital incentive for economic growth.
Kenya’s improved business climate is attributed to reforms adopted in the past decade, which include changing laws and policies and expanding infrastructure to facilitate the movement of people and goods.
In the past five years, for example, several new laws have been enacted to regulate business registration, which cumulatively have cleared obstacles that formerly undermined investment.
Concurrent to this is the push towards automation and e-government, which expedite business approvals.
But the challenge with such reports is that they are based on what appears on paper. The reality is often different.
Several unstated factors come to play to pollute the business environment. Corruption is a major threat in this respect.
Investors always find themselves assailed by situations where they have to pay bribes to get licences or secure contracts.
Lethargy and procrastination obtain at various levels of government. Matters have been made worse by restrictive laws in counties.
Devolved governments have introduced levies that force investors to pay twice for services or approvals, and these add to the cost of doing business.
Arbitration of disputes remains a major setback because of the period it takes to get matters resolved at various tribunals or courts.
Investors require speedy administration of justice so that they can get going with their operations. Add to this high tax regime and the environment becomes rather difficult.
Despite the good showing in the ranking, the government has to deal with the threats that business people face every day: corruption, high taxes, poor roads, irregular power supply and high bills, urban traffic and inadequate water.
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