Counties should view private sector as strategic partner

County governments are critical players in Kenya’s development agenda. Since the commencement of devolution in 2013, disbursements from the National Government to counties have consistently surpassed the constitutional threshold of 15 percent of revenue raised nationally.

Over the years, this steady direct flow of public funds to rural economies and other urban centers outside the capital city has created business opportunities that the private sector has capitalized on. Tellingly, a larger proportion of businesses in Kenya today have a national reach compared to before devolution when only a handful of large players had national reach. This is an indication of the economic opportunities that have emerged in the counties.

Unfortunately, despite the steady influx of businesses and traders to counties over the past decade, the business environment in counties is still unwelcoming.

The ease of doing business in the counties is not where it should be, with most businesses citing issues such as high entry fees, multiple distribution fees, multiple vehicle branding fees, separate business permits demanded in every county of distribution, and complex approval processes for building plans and export certificates.

The 47 County governments need to work collaboratively—tapping into institutions like the Council of Governors—to harmonize their laws, consolidate their fee structure and streamline the compliance process for businesses.

They also need to work collaboratively with the national government, which recently launched the one-stop-shop for government services for business in recognition of the special need for convenient, efficient and affordable government services.

This one-stop-shop effectively relieves counties of the task of dealing directly with businesses in order to raise revenue.

County governments need to start seeing the private sector and the wider business community, including SMEs and traders, as strategic partners. The focus should not always be on enforcing laws and collecting revenues. They need to start focusing more on proactively creating an enabling environment for business.

This has benefits for them too, given their mandate to drive development and the role that business plays in tis regard. It is important to note that the private sector’s developmental impact extends way beyond the taxes and fees businesses pay national and county governments.

Businesses are the vehicles to channel the transfer of the latest skills, knowledge and technology to local populations, a process that gradually improves the economic prospects of local communities by making them ready for the modern job market.

Businesses therefore have a long-term development impact – a key reason why county governments should view them as strategic partners, improve the business environment and eliminate existing trade barriers.

Counties need to hit the reset button and reconfigure their engagement with businesses.