Poor policies threaten services sector in Kenya, says report

NAIROBI: Lack of inadequate and appropriate regulation, transparency and technical support has been identified as a major factor limiting Kenya's progress from a regional to a global ICT-enabled services and financial hub.

A sectoral report by the Vision 2030 Delivery Secretariat and the Overseas Development Institute (ODI), a UK-based development think-tank, has identified policy changes in the two services as drivers of local and export services.

The two Vision 2030 key sectors have lagged behind in labour productivity as compared to other sectors despite the dynamic contribution of Kenya's export of services.

Growth engine

Participants at a forum in Nairobi yesterday heard that the services sector is a growth engine that plays a critical role in economic transformation. The services sector forum sought to maximise the contribution of Kenya's IT-enabled services and financial services towards economic transformation and job creation.

Treasury Economic Secretary Geoffrey Mwau said providing efficient services is a key driver for the economy. "We still need to do more to position Kenya as a services hub - especially a financial hub - by undertaking more reforms and strengthening the regulatory capacity," he added.

Dr Mwau noted that improving the business environment, supporting devolution, enhancing transport and logistics, reducing dependence on rain-fed agriculture as well as investing in social services will lead to a transformative economy.

Vision 2030 Director-General Gituro Wainaina said the objective is to examine the cost and benefits of a services-led economy and what needs to be done to become a global services hub. Prof Gituro said Kenya needs to leverage on its geographical position and IT capacity to strengthen links with other sectors.