What business leaders want from the next president
Bidco Oil group chief executive officer Vimal Shah (left) with Kenya Private Sector Alliance chairman Patrick Obath (right) and CEO Carole Kariuki during a past meeting. Photo/File
What you need to know:
Leaders expect the next president to start the job by strengthening the Judiciary and completing reforms in the law enforcement agencies.
Corruption has frequently been cited as a major blot on Kenya’s economy.
Business leaders are banking on firm political leadership to restore investor confidence in Kenya and put the economy on a strong growth path after Monday’s General Election.
The industry captains said they expect the winner of the presidential election to start the job by strengthening the Judiciary and completing reforms in the law enforcement agencies, including the police, to stem the rising tide of white collar crime.
“Fighting corruption is a top priority because the country can no longer afford it in the new dispensation,” said Safaricom’s CEO Bob Collymore.
A Business Daily survey of top executives found that in addition to national healing, official corruption and open disregard of the law top the list of issues that business leaders want the election winner to address from day one.
Corruption has frequently been cited as a major blot on Kenya’s economy that not only leads to loss of billions of shillings public funds but also pollutes the business environment — making Kenya less competitive as an investment destination.
All the eight presidential candidates have spelt out a number of austerity measures they plan to take in their first 100 days in office.
Transparency International’s latest assessment of the level of corruption indicates that each transport company that hauls goods through Kenya spends Sh570,775 every month to pay bribes to customs officials, the police, and immigration officers to speed up the passage of goods through ports and weighbridges.
“The winner of this election must first fix the police and the Judiciary for real, then take charge of ideology and practice in parliament to instil discipline in our politics,” said Polycarp Igathe, the CEO of Vivo Energy.
President Kibaki is set to relinquish power after the Monday elections or in mid-April in the event of a run-off after finishing his two terms. Prime Minister Raila Odinga and his deputy Uhuru Kenyatta are the front-runners in the race to State House, according to the latest opinion polls.
Mr Kibaki’s successor is expected to get down to fixing the economy and getting Kenya back to business after five years of slow growth under a grand coalition government.
“Kenya is in a horrid vicious cycle of indiscipline, moral decay and criminality that stems from weak enforcement of laws and we expect the next president to bring this to an end,” said Mr Igathe.
Consumer market researcher Ipsos Synovate Thursday released a business leaders’ confidence index showing that local firms generally rank the government low on provision of security, law and order, licensing procedures, tax policies and containing corruption.
But the survey of 107 small, medium and large enterprises in all sectors shows that business leaders are now more optimistic of the period after next week’s election than they were in September 2012.
The leaders’ confidence index currently stands at 59.2 points, up from 53.8 per cent in September 2012 with 71 per cent of those surveyed saying the political landscape is conducive to business. This improvement of confidence was mainly driven by availability of labour (skilled and unskilled) and raw materials, and an efficient Judiciary.
The business leaders also expressed concern over Kenya’s deteriorating fiscal and macro-economic position, saying the winner of next week’s election must reverse the trend.
Kenya’s GDP grew at an average of 3.35 per cent in the first half of the current financial year compared with 4.3 per cent in the same period of the previous year, according to the Kenya National Bureau of Statistics (KNBs).
The data also indicate that while the government managed to bring down inflation to an average of 4.96 per cent in the first six months of the financial year compared to 17.84 per cent in the previous year, the upward trend resumed in the first two months of 2013.
Similarly, the shilling has moved out of last year’s stability zone and is increasingly ceding ground to major world currencies as the gap between imports and exports widens.
Kenya has just missed its half-year revenue collection target of Sh404.3 billion by 10.9 per cent, further diluting the fiscal and macro-economic environment.
The Controller of Budget’s latest report indicates the this dilution of the government’s financial position is straining the implementation of the national budget and has already forced the state to suspend the payment of Sh32 billion in foreign debt obligation.
Official foreign exchange reserves held by Central Bank of Kenya — often a reflection of a country’s trading position — has in recent months dropped below the set statutory limit.
CBK data show that official reserves — which should be equivalent to at least four months of import cover (or $5,250 million) dropped from $4,992 million to $4,974 million in February 14, 2013.
Most of the presidential contenders have released manifestos promising short- and long-term measures aimed at boosting the country’s macro-economic position.
The business community says it wants the winner of the race to deal firmly with symptoms of economic decline by strengthening governance and law enforcement upon taking power.
“We would like to see the winner of next week’s election to take immediate steps to restore economic stability while also making effort to boost relations with the international community,” said Lucy Karume, who chairs the Kenya Tourism Federation.
Inability by law enforcers to contain poaching has recently given Kenya a bad reputation that needs to be addressed immediately, Ms Karume said.
A number of Business Daily readers appeared to echo the calls by business leaders on-line.
Commenting on Thursday’s lead story on the dire state of public finance, one John Seno said: “The first order of business for Kenya’s new CEO is to stop the bleeding of money through corruption, reduce wastage significantly, and reduce recurrent expenditure because lord knows we cannot cut back on development.”
