Kibaki promises more reforms to speed up business

The government on Tuesday promised more reforms in the facilitation of business activities as it rallied for support of the private sector in economic development.

“Government departments must expedite all applications and submissions presented to them by stakeholders on improving the environment of doing business in the country. This is the attitude government departments must adopt,” President Kibaki directed when he met officials from the Kenya Private Sector Alliance in his Nairobi office.

He said the emphasis would be accorded to operations of small and medium enterprises (SMEs) owing to their potential in spurring growth with close to 10 million livelihoods directly dependent on them.

In a petition to the Head of State, players in the private sector proposed the creation of a one-stop agency to handle operations of SMEs so as to boost their role in economic development.

The lobby, through its chairman Patrick Obath, further urged the government to prioritise procurement of locally manufactured goods as provided for in the public procurement law in order to protect local jobs.

SMEs in Kenya have been dogged by woes over business licences leading to run-ins with local authorities over business permits, amid claims of bureaucracy on the part of government officials.

The red tape has also been blamed for fanning graft in the licensing process, with some officers taking advantage of desperate entrepreneurs to enrich themselves. Last week Local Government minister Musalia Mudavadi said the government would soon address such concerns through enhanced partnerships with SMEs.

“We are going to work more closely to see how the role of small businesses could be enhanced in growing the economy,” he said.

Concern over licences has dragged on for a while now with several government departments, including Treasury, seeking ways of addressing the issue.

In his budget speech last month, Finance minister Uhuru Kenyatta proposed to speed up licensing reforms in addition to setting up an electronic registry for business licences.

These measures are aimed at cutting the red tape associated with setting up a business in Kenya, with a view to making it a more competitive business destination.

The proposal to set up the e-registry is, however, not new. The Ministry of Finance has established an e-registry to improve transparency in the license process and established a task force to fast-track the implementation of regulatory reforms.

In 2007, the government eliminated 315 licences and simplified another 379 of the 1,325 that had been identified as hindering growth of small businesses.

In July 2008, the government reduced the number of licences required to set up a business from 300 to 16. President Kibaki on Tuesday urged the private sector to continue engaging the government and providing proposals of expanding SMEs.