The current state of the economy has been described as a cause for concern especially given the increasing job losses and closure of businesses.
Giving a keynote address during a roundtable meeting between the Senate and the Kenya Private Sector Alliance (Kepsa) at a Naivasha hotel yesterday, Speaker Kenneth Lusaka cited the recent job losses at the troubled Mumias Sugar Company and several other firms.
He admitted that the country was facing economic challenges, citing austerity measures by the government aimed at cutting costs.
“The country is staring at a major crisis going into the future and the current situation is a recipe for chaos. Unfortunately, the sad reality is those who are out of employment will looks for ways of survival,” warned Mr Lusaka.
He termed the situation as a time bomb, asking stakeholders to come up with practical solutions on how to address the current state of the economy.
The Senate Speaker spoke strongly against what he termed as “red tapes,” alluding to a case of some international investors who spent three days in Kenya waiting to meet a Minister only to go to Rwanda, meet the President and eventually decide to set up their business there.
He raised the need to reduce government bureaucracy and increase competitiveness to attract investors into the country.
The Speaker said with more Kenyans moving to urban centres, according to the latest census, county governments need to come up with plans that attract investors to set up industries outside Nairobi.
Top officials from the private sector asked the Senate to come up with mechanisms that will enable business to thrive despite the unintended effects of the devolution of certain functions.
“Although we have a rosy global ranking on ease of doing business, we need to have a conversation on the cost of doing business across the country. People see the global rise in numbers but there is more,” said (Kepsa) chairman, Nick Nesbitt at the Speaker’s Roundtable with the Senate.
He cited the suffering of businesses because of unpaid pending bills by county governments, lack of harmony in policies and the multiplicity of taxes as among the issues facing the private sector in the counties.
Mr Nesbitt said Small and Medium Enterprises have been hardest hit by the effect of having too many regulators to deal with.
“So many people, for some reason, have the authority to stop a business from running,” said Mr Nesbitt.
Kepsa Chief Executive Officer Carole Kariuki said the net effect of the many rules in the country is the lack of competitiveness that results in international investors choosing to set up businesses in other countries.
Ms Kariuki said the private sector has also borne the brunt of the budget cuts in some counties that have come long after procurement has been done, resulting in pending bills.
“We need the Senate to create a framework that enables predictability in terms of payments,” said Ms Kariuki.