This is how we are failing investors

The Central Bank of Kenya, Capital Markets Authority, Nairobi Stock Exchange and other governance, regulatory and oversight institutions in Kenya’s financial sector have been served with a wake-up call.

The Transparency International Global Corruption report released on Wednesday blames the corporate governance crisis for financial losses running into billions of shillings.

Weak governance structures, coupled with an inadequate legal regime and a high level of official corruption, the report finds, places money put in by depositors and investors at great risk, which, perhaps, explains why Kenya is not attracting as much foreign investment as it should.

At a time when the country is trumpeting Vision 2030 as a route towards transforming Kenya into a modern economy, we have been to slow to implement the radical overhaul required in the legal and regulatory regime to eliminate the barriers that hold us back.

Corruption, rent-seeking, outmoded laws, a multiplicity of licences, and an over-bearing but grossly inefficient bureaucracy, all conspire to add to the cost of doing business.

We continue to tip-toe with the reform package designed to catapult Kenya into the ranks of modern democracies, and ensure we never again descend into the barbarism witnessed after the 2007 elections.

A new constitution and political and social reforms by themselves will not, however, be enough. What is popularly referred to as Agenda 4 must be expanded to include transformation across the entire political, social and economic environment.

Our economy will not grow and rescue the masses from poverty unless we make Kenya an attractive place for doing business.

That in turn will not happen unless we iron out all the kinks in the governance and regulatory mechanisms. Investors and depositors need to be assured that their money is safe; and that any problems will be resolved speedily and fairly.