Private sector urged to get involved in making of laws

The private sector has been challenged to actively get involved in the formulation of business related regulations to harness investments and promote the ease of doing business.

United Nations Conference on Trade and Development (UNCTAD) secretary-general Mukhisa Kituyi on Wednesday told a high-level chief executive officers’ match-making breakfast meeting that the private investor was expected to be a key player in driving the focus on optimising regulatory frameworks to bridge the multi-trillion shilling investment gap.

Dr Kituyi also urged governments to ensure the drive to attract investors does not neglect local entrepreneurs and force them to adopt crafty methods to stay in business.

“When you have an old stock of agreements where you offer a foreign investor better conditions than the locals then you risk domestic  round tripping where if the Kenyan government  is offering  better conditions for foreigners then you register a company in Mauritius and then invest in Kenya as a foreigner. 

“We need to balance attractiveness to the foreign investor by first satisfying the local investor and turning them to the best marketer for foreign investment but many at times we have looked too much on the foreigner,” he told the chief executives on the sidelines of the ongoing UNCTAD 14 in Nairobi.

Most African governments have been blamed for creating skewed business environments favourable to foreigners as they seek to attract Foreign Direct Investments.

The private sector was tasked with being keen on legislation instead of letting governments create regulations with grey zones that complicate the ease of doing business. 

Businesses were asked to engage in dialogues that come up with rules  amongst themselves so that the governments only join in their legislation process to draft laws that do not turn out to be  “bureaucratic night mares to enterprises”.

Such rules would involve creation of benchmarks for self-regulations by committing to some acceptable conducts which act as soft laws to guide their business operations hence guiding government legislations.

The World Investment Report 2015 released at the UNCTAD 14 showed multinationals circumvent barriers with the top 500 firms holding at least three passports that allow them to overcome national identities and priorities for setting up business ventures.

The scenario according to Dr Kituyi underlines the need for better conditions for local investors. “If you improve the investment conditions for the local companies against the foreign companies, it will be very easy because the foreign companies will buy the Kenyan companies then that becomes the Kenyan company through which it will get the privileges are.  Just don’t make it hard for compliance when there is partnership,” Dr Kituyi said.

The global investment report also pointed out that one of the challenges with the regulations regimes in the developing world’s that government write rules whose compliance is very  expensive and  consuming forcing firms to seek alternative channels, usually informal.

The Kenya Private sector Alliance which was a key organiser for the meeting welcomed the proposal saying it will be the easiest option to ensure rules favour businesses.

Kepsa  chief executive Carole Kariuki said the private sector umbrella body has been involved in various business legislations and will be keen on the rule government create to see that they contribute to the ease of doing business .

“Next week we will be having our annual round table with both houses of parliament and where we suggest new laws and changes in the existing laws to promote ease of doing business. We do engage in matters including the dialogue on political stability because all these affect our businesses. Right now we are looking at the Finance Bill, the Public Private Partnership (PPP) Bill and the Anti-Bribery bill which came from the private sector so that business can participate in the wars against graft,” Ms Kariuki said.

The KEPSA CEO urged local businesses to take advantage of the ongoing UNCTAD and meet the potential investors as well as grab business opportunities.

More than 11,000 international and local delegates are participating in the meeting at the Kenyatta International Convention Center until Friday when the meeting is expected to come into a close.