Impasse on key Bills likely to slow down economic growth

The impasse surrounding enactment of various Bills touching on economy is creating uncertainty that is negatively impacting on growth, a minister has said.

The Finance Bill 2011, devolution laws, special economic zones laws and public private partnership legislations should be enacted quickly to boost economic growth.

“Parliament needs to create enabling legislation to improve the business climate so as to boost the economy and improve foreign exchange earnings,” minister for Public Works Chris Obure said.

Mr Obure was presiding over the 28th National Economic and Social Council (NESC) full meeting in Nairobi over the weekend, which discussed social and economic issues pertinent to the economy.

The minister called on the government to realise that this is an election year that required prioritisation and urgency in passing Bills to help sustain growth.

The council voiced its opposition to Parliament’s drive to cap interest lending rates, saying this will affect the informal sector and small-and-medium businesses through reduced lending from commercial banks and higher transaction costs.

Gem MP Jakoyo Midiwo had moved a proposal in the Finance Bill 2011 to have banks lending rates set at four per cent above the central bank lending rate.

In its report, the council also noted that the natural products sub sector is underdeveloped in Kenya, yet the global value of natural products business has been estimated to contribute Sh42 trillion to the world economy.

It called for establishment of a task team that will tinker the Micro and Small Enterprises Bill, to reflect the aspirations of the natural products industry, especially the creation of venture capital to help support.