Personal Finance

Positioning your business for BBI

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President Uhuru Kenyatta and former Prime Minister display a copy of BBI Report during the presentation at Kisii State Lodge. PHOTO | PSCU

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Summary

  • One of the major changes contained in BBI is on economic principles.
  • One of the proposed reforms is on the provision of equitable opportunities for all Kenyans, a provision which could be adopted in human resource.
  • Small and Medium Enterprises (SMEs) are specifically mentioned in BBI.

Kenya is undergoing a constitutional reforms process that if completed successfully will overhaul the legal system. It is important for business to understand that if successful, the Building Bridge Initiatives (BBI) will affect their ventures. Depending on the reforms, some businesses may have to change in strategy to continue as a going concern. For others, BBI may create new opportunities, for example in the legal sector.

Today I will highlight some of the ways BBI may impact businesses. While the highlight is not exhaustive, it provides a guide on how to align to changes BBI might bring.

One of the major changes contained in BBI is on economic principles. One of the proposed reforms is on the provision of equitable opportunities for all Kenyans, a provision which could be adopted in human resource.

Small and Medium Enterprises (SMEs) are specifically mentioned in BBI. The State undertakes to promote an economic system that supports SME’s. It could mean legislative reforms, institutional reforms or incentives like tax. If BBI is passed, SME focused reforms may follow. Businesses that are SME’s or provide services to SME’s will be positively impacted.

BBI will change the entire structure of Parliament and the government. The Judiciary will be completely overhauled if BBI is passed. The impact on business may be indirect. Some argue that the proposed structure is more expensive for the citizenry and is one of the reasons they are opposed to it. These changes will overhaul the political framework in Kenya and as you may be aware, changes in political environment have a counter effect on businesses. It’s important to acquaint to the proposed structure now and align your business as needed.

Youth owned businesses have a reason to smile because of BBI. A youth commission has been proposed to advice the government on matters specifit to young people.

According to the proposed BBI implementation schedules, a number of laws ought to be passed following successful enactment. These include an Act on economy and shared prosperity. Some laws may be amended. I expect a change in SME legal structure.

There are a lot of other details contained in BBI and it is worthwhile for your business to critically assess any impactful changes. Regulatory changes affect businesses positively or negatively. An impact assessment of the regulatory changes is an important part of strategy formulation.

How your business responds to BBI might be critical to your growth when responding to a regulatory change. The first thing is to understand the proposed change by reading the bill. Identify all issues that are relevant to your business and jot them down. Classify these issues as the positive or negative in terms of impact assessment.

A provision that creates an opportunity is a positive impact while one that diminishes opportunities is a negative impact. In BBI some of the positive impacts include proposed SME reforms, youth legislative reforms and reforms on economic prosperity. Negative impacts include the proposed government structure. It may be too expensive and complicated for citizenry to comprehend and spearhead the changes. Key resources include persons, finances, structures among others. An organisational change management process must be done for the business to reap maximum benefit from the process.