Kenya hits at World Bank over country’s low ranking

Industrialisation Cabinet Secretary Adan Mohamed

NAIROBI: Kenya has scoffed at a new World Bank survey indicating the country has only ‘marginally’ improved business regulatory environment.

Industrialisation and Enterprise Development Cabinet Secretary Adan Mohamed said the World Bank Group report dubbed, ‘Doing Business 2015: Going Beyond Efficiency’ released yesterday ignored recent State-driven interventions that have significantly improved Kenya’s business climate.

“These latest results do not capture the reforms undertaken by the Government in the last 12 months,” he said, noting that registering a company in Kenya ‘now takes one day up from 32 days a year ago’.

In his disapproval immediately after the findings of the survey were released, Mohamed said various Government agencies had undertaken different reforms that should have seen Kenya’s business environment rank much higher.

World Bank reported a slight improvement in the ease of doing business in Kenya, announcing that the country has jumped one place higher to position 136 this year, over 2013 out of 189 countries from around the World surveyed. The survey reviews business information like taxes and regulatory requirements.

The ‘Ease of Doing Business’ index compiled by the World Bank Group is a critical tool used by international investors in choosing where to put their money. In support of his objection, Mohamed pointed that Kenya had jumped 16 positions higher in another survey. “A ranking on the Global Competitiveness Index by the World Economic Forum improved Kenya’s standing by 16 positions to 90 this year up from 106, two years ago,” according to a statement from the Industrialisation ministry.

PERMIT REGIME

World Bank on its part found that doing business in Kenya has been complicated by the revised rate on retirement savings and more stringent construction permit regime.

The two regulations, the Bretton Woods institution said, only helped to increase the overall applicable tax rates. “... it made dealing with construction permits more costly by increasing the building permit fees, and it made paying taxes more costly for companies by increasing employers’ social security contribution rate.”

Kenya, however, improved its credit information system by passing legislation that allows the sharing of both positive and negative credit information and establishes guidelines for the treatment of historical data, World Bank reported.