The 2018 World Bank report on the ease of doing business in Kenya based on the parameter of acquisition of building permits and development approvals ranked the country at position 124, below Rwanda (112), Botswana (59) and Namibia (107).
The poor ranking was attributed to the long processes and lengthy periods needed to acquire a development permit with some applications taking up to 156 days.
A recent survey conducted by the Architectural Association of Kenya (AAK) indicates that while Nairobi, Mombasa and Kisumu counties had e-construction permit systems, users still face a myriad of challenges including frequent downtimes and delays in processing of applications.
The average time taken to acquire a building permit in Nairobi ranges from between three months to two years. The delays a largely due to the human interaction with the portal. These delays not only impact negatively on investor confidence and ease of doing business in Nairobi, but also serve as a precursor to the construction of unauthorised structures and urban sprawl.
The Central Bank 2018 fourth quarter report revealed that real estate developers were the biggest loan defaulters at Sh44.4 billion, a 15.8 percent rise outpacing non-performing loans by manufacturers (11.7 percent) and traders (7.3 percent).
The construction industry last year received Sh113.7 billion in loans from commercial banks but 2019 appears to be hurting private sector players as sales have dipped by up to 3.1 percent forcing financiers to auction projects for non-servicing of loans.
Two recent reports highlight the need for a lasting solution.
First, the Knight Frank Kenya Market Update report for the 1st half of 2019 indicates that the value of building plans approved in Nairobi fell to Sh48.54 billion in the first quarter of 2019, a 19.2 percent drop from Sh60.11 billion in a comparable period in 2018. Given the sensitive nature of construction, the impact in relation to public safety has largely been negative with substandard buildings and unregulated development being the norm in various parts of the city.
Secondly, the Status of the Built Environment (SBE) Report for the first- half of 2019 by AAK, the average days taken to obtain a building approval in Nairobi was 41.5 days, significantly higher than the 2-3hours in Los Angeles and 10 days in Australia. Ideally the approval process in Nairobi should take 20 to 30 days.
The challenges of the e-construction permit in Nairobi have further been compounded by lack of a Physical Planning Liaison Committee after the initial team was suspended by the County Governor.
Given the growing list of disappointed investors, built environment professionals and developers, isn’t is time Kenya started conversations around creating a one-stop shop centre that harmonises the procedures and standards for development control while incorporating all agencies involved in issuance of building permits and planning approvals.
Furthermore, all e-permitting systems should be free of political influence and run efficiently and in an uninterrupted manager.
The writer is a research and advocacy officer, AAK.
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