Small Enterprise

Kenya makes gains and losses on ease of doing business

A view of the Kenyan capital Nairobi. FILE PHOTO | NMG
A view of the Kenyan capital Nairobi. FILE PHOTO | NMG 

It now takes entrepreneurs 25 days to set up a business in Nairobi, three days more from the 22 required last year, the latest World Bank’s Doing Business Index 2018 shows.

The annual report ranked Kenya behind Rwanda (four days), Mauritius (five), Ghana (14), Nigeria (18) and Uganda (24).

However, the index also showed that prospective businesspeople have to go through at least six procedures to get set up, a slight improvement from the seven steps required last year.

The average period in sub-Saharan Africa is 7.6 procedures.

Overall, Kenya was ranked position 117 globally in making the environment easier for entrepreneurs to set up business, representing a marginal drop from last year’s 116.

“Kenya made starting a business easier by merging procedures required to start-up and formally operate a business,” the World Bank said in the report released last week.

The Nairobi City County consolidated five licences into one permit in the last financial year, easing the pain investors had to go through when they wanted to start an enterprise.

The merged approvals include the single business permit, fire clearance certificate, advertising signage, health certificate and food hygiene. Investors apply for the unified permit online with an option to pay digitally.

It costs an average of Sh19,700 to set up a business in Nairobi, comprising Sh15,000 fee for single business permit, Sh4,500 for fire clearance certificate and Sh200 application fee.

In the overall survey, East Africa’s largest economy finished 80th in the 2017 index, which surveyed 190 economies compared to last year’s position 92.

The new ranking, the highest since 2008 when the country finished in 84th position, means Kenya is the third most competitive economy in Africa after Mauritius (25th) and Rwanda (41st).

The report, which is based on data collected in the year ended June 1, captures approvals such as construction permits, registration of property, ease of border clearance among several other parameters.

“The business community all over the world is looking for very few ingredients and tests on whether to make investment decision in a country or not,” Adan Mohamed, Industry and Trade secretary, said during the launch of the report.