The World Bank has praised Kenya’s private sector saying it is the most vibrant and dynamic in the East African Community (EAC).
World Bank Kenya Lead Private Sector Development Specialist Ganesh Rasagam said as a result, Kenyan’s firms were able to export manufactured goods to the rest of the region.
“The EAC could therefore draw lessons from Kenya’s innovative private sector. Kenya can comfortably produce the same goods that are currently imported and transform itself into the region’s manufacturing hub,” Rasagam said.
This, he said, is despite Kenya being ranked 121 out of 183 countries by the World Bank’s Doing Business Report of 2012, down from 78 in 2008. In 2012, Rwanda and Uganda were ranked 52 and 120 respectively.
Kenya has a developed textile and apparel industry that exports to the US market under a preferential trade agreement. “The expertise acquired can be expanded to the food processing, chemical and furniture industries,” he said.
Rasagam called on Kenya’s neighbours to leverage on the financial sector in order to improve the competitiveness of all other sectors of the economy.
“The use of mobile money transfer platform is an additional method for increasing financial inclusion,” the private sector specialist said, adding that Kenya could also leverage on a large pool of human capital.
“This has provided a base for the development of entrepreneurs who can compete regionally,” he said in Nairobi.
Kenya has made the greatest strides in allowing free movement of labour across the region, according to new findings by the East African Business Council (EABC).
The country is also waiving work permit fees for nationals of the five partner states of the East African Community, thus giving it easier access to human capital. Kenya issued 2,755 job permits to workers from other EAC partner states from 2011 up to May 2012.
In addition, 75 and 23 dependants were employed in 2011 and 2012 respectively. The survey, however, shows over 70 per cent of applications from EAC citizens have not been approved.
The movement of goods and services in East Africa is expected to improve from next month as Kenya and Uganda roll out online cargo clearance systems.
Rasagam called on Kenya to accelerate efforts to address the bottlenecks that are holding back its industrial sector in order to be comparable to emerging nations such as Vietnam and Sri Lanka.
The World Bank official said a competitive private sector plays a big role in attracting foreign investments and asked Kenya to improve the business.
Poor transport, high electricity costs and heavy bureaucracy are some of the bottlenecks that he said were preventing Kenya from achieving its full potential. He called for more investments in public institutions that deliver services to the private sector.
The new World Bank country director for Kenya, Rwanda and Eritrea, Diarietou Gaye, said the bank was working on a new country partnership strategy that will determine the allocation of funds to Kenya for the next three years.
“Given the new system of governance, devolution will be a core focus of the next strategy,” she said, adding that assistance to the 47 counties would help them handle their constitutional responsibilities.