Doing business in Kenya gets tougher — WB report

Kenya’s ranking in terms of ease of doing business worsened last year.

The country slid to position 109 from 106 in the previous year, according to the World Bank’s Doing Business Report 2012.

Prime Minister Raila Odinga singled out the culture of resistance to change by Kenyans as the biggest contributor to the country’s increased cost of doing business.

He pointed out that many Kenyans are unwilling to embrace crucial reforms designed to improve business environment and position the country as a favourite regional investment destination.

He said graft, lack of access to finance and Government bureaucracy has made Kenya an unfavourable destination for doing business.

“We must change,” said Raila.

Medium enterprises

He spoke during the launch of ‘Doing Business in Kenya report (2012) in Nairobi on Tuesday.

According to the report, it is easiest to start a business in Thika; to deal with construction permits in Malaba; to register a property in Mombasa; and to enforce a contract in Garissa.

It is, however, most difficult to start a business in Kisumu, to deal with construction permits in Nakuru, to register property in Isiolo and to enforce a contract in Nairobi.

The report, the second in a series that analyses business regulations from the perspective of small and medium enterprises in 13 Kenyan cities, documents business reforms in all four areas measured. These are starting a business, dealing with construction permits, registering property and enforcing contracts.

According to the report Malaba town ranked top on the ease of doing business. It was followed by Narok, Thika, Garissa and Eldoret. Nairobi was the worst city in terms of the ease of doing business, followed by Nakuru, Kakamega, Nyeri and Kilifi.

Raila noted that it was not due to lack of strategic mineral resources that Kenya is facing problems but because of generation and generations of bureaucracies, which need to be overhauled.

He pointed out that the talk by Kenyans of setting up a ‘one- stop-shop’ where investors can obtain business permits is merely a theory because relevant public institutions have refused to cede power to a central place. “We all speak the same language everywhere we go about one-stop-shop. It is just an issue on paper because all these institutions have refused to cede authority to the centre,” said Raila.

The concept of one-stop shop is meant to issue business permits to local and foreign investors from a central place in order to avoid the hassles of running up and down in different Government ministries and departments.