County bosses meet private sector stakeholders

Investors want county governments to revise their taxes in order to make the devolved units more attractive for business.

Speaking at the ongoing Governors Summit in Naivasha yesterday, Kenya Association of Manufacturers chairman Pradeep Paunrama said there were countless business opportunities in the counties but most investors were repulsed by unnecessary taxes imposed by county governments.

Hard-pressed by a huge wage bill and demand for services, some county governments have resorted to imposing levies even on basic services as they scavenge for more revenue.

“As manufacturers, we have met with the governors and discussed the opportunities we see in their regions. However, in most cases, the county governments have imposed too many unnecessary taxes that end up discouraging investors.

This is a major issue that they need to think through so that they don’t end up locking out investment,” Mr Paunrama said.

NEW OPPORTUNITIES

He said that devolution had opened up more investment opportunities of benefit to investors and residents of far-flung areas that were previously considered too remote for business.

“The promise of devolution was a promise of new opportunities to the private sector. As manufacturers, these opportunities have come in a large way but we still feel that more can be done,” the chairman said.

Nation Media Group chief executive Linus Gitahi said devolution was a positive development that has unlocked numerous opportunities for investors as well as improved the lives of many Kenyans.

“We can actually create opportunities that can change the lives of Kenyans. We are partners in the journey of transforming this country,”
The government, whether at the national or county level, needs to work together with the private sector to deliver on the promise of development,” Mr Gitahi said.

The summit, now in its second edition, is convened by the Nation Media Group as a forum where governors can meet with the private sector to chart the country’s development path.

The Nation group chief executive said that most Kenyans now have access to basic services that were previously out of reach, thanks to devolution. Bomet Governor, who is also the chairman of the Governors Council, Mr Isaac Ruto, said the county bosses were committed to continually dialogue with the private sector to see how better the two sides can work together to fast-track development.

WORLD BANK REPORT

He dismissed a report by the World Bank that criticized county governments for giving priority to salaries in their spending at the expense of development.

“It was a total misrepresentation. All the counties met the 30 per cent threshold required by law. What happened is that development projects budgeted for in that period had not taken shape by the time the report was compiled due to bureaucracy in public procurement,” Mr Ruto said.

Another major hindrance to the establishment of industries in the counties, according the manufacturers lobby, is the high cost of land.
Mr Paunrama said that land is overvalued in most places in the country, to a level that sometimes “doesn’t make economic sense”.

“To this end, we have urged all the counties to set up at least one industrial park in their borders. This would make it very easy for an investor to come in and set up shop,” he said.

Kenya Power chief executive Ben Chumo said plans were underway to significantly increase connectivity beyond the current 37 per cent countrywide.

He said the firm was investing Sh10.45 billion in the construction of 36 sub-stations to reinforce the country’s electricity network.
Half of this money would be paid to local contractors to improve power distribution and focus on poor counties.