Charting Kenya’s path to sustainable economic growth

Six decades ago, Kenya emerged as a fledgling nation, having gained independence in 1963. These formative years were marked by grand development plans centring around a primarily agrarian economy and establishing foundational industries. The Kenyan narrative of today, however, paints a drastically different picture.

Over the years the country has evolved to become a major economic force in East and Central Africa, continually redefining its trajectory.

The nation now aspires to a loftier ambition, charting a course towards becoming an economic bastion reminiscent of Singapore's extraordinary rise in Asia.

However, there is room for improvement. Ninety-eight percent of all Kenyan businesses are small and medium enterprises (SMEs).

Given that these firms provide livelihoods for the majority of Kenya's working populace, any policy modification bolstering this sector's growth promises profound economic dividends.

The pursuit of inclusive growth is also central to Kenya's aspiration of becoming an economic fulcrum. While Kenya's Constitution advocates fairness and inclusivity, the spectre of corruption looms large.

Transparency International’s 2022 Corruption Perceptions Index ranks Kenya at 123 out of 180 countries.

This sobering position emphasises the imperative to rein in corruption - an endeavour with potentially vast economic implications, considering that recent estimates put public money lost to corruption at seven percent of Kenya’s GDP in 2020.

Kenya must also scrutinise its constitutional expenses. By identifying and eliminating any inefficiencies, implementation of the Constitution becomes more affordable and sustainable.

This rationalised approach to expenditure would contribute to fiscal prudence and further solidify the country's economic health.

A careful evaluation of Kenya's existing legal framework also shines a spotlight on the need for revising and updating certain laws.

By doing so, inconsistencies that pose potential hurdles to investors can be mitigated. Crucially, this would involve investing in capacity building for legal and regulatory bodies.

Strengthening these institutions is a key step towards ensuring the uniform resolution of complex legal issues and fostering consistency in decision-making.

Although already on the path of digitisation of government services and registries, a sharp focus on completing the digitisation of lands and business-related registries is key to increasing efficiencies.

The role of public-private partnerships (PPPs) in infrastructure development is also pivotal. To reap the full benefits of PPPs, however, Kenya should revisit the current legal framework governing these partnerships.

Simplifying processes, cutting through red tape, and enabling swift project implementation would make PPPs more attractive, fuelling infrastructure growth.

Finally, a significant aspect of Kenya's path forward involves reforming its complex and aggressive tax laws.

An overhauled, clear, and equitable tax structure would expand the tax net, foster a conducive business environment, and amplify Kenya's appeal to local and foreign investors.

The writer is the managing partner at Bowmans Kenya.