Counties are in a unique position to boost the industrialisation of our country if they leverage their diversity in natural resources and skills and if they use the novelty of devolution to set the pace for healthy competitive practices to attract investment.
The original excitement in devolution has now given way to anxiety about the sustainability of county governments.
Many of them are questioning their ability to stand on their own and establishing themselves as economic power houses.
How innovatively can they raise revenue to complement the Commission on Revenue Allocation’s contribution?
One of the main visions of devolution was to ensure that all regions benefit equally from improved economic conditions.
The structures to achieve this were to be mapped upon the unique features of each county.
This means that county governments can be the architects of demand and supply for their regions to be competitive based on their strong attributes and resources.
Meru County has set the pace with the establishment of a cancer centre, while Machakos is dedicated to renovating public amenities and investing it youth programmes to attract investors.
Constitutionally, the national government is required to provide not less than 15 per cent of the last audited and approved national accounts.
Therefore, counties have to find sustainable ways to engage the national government and industry to realise their potential.
One of the ways to increase revenue is to roll out public-private partnerships.
County consultative forums should involve industry in their decision-making.
While creating an enabling business environment, it will be important to include regulatory impact assessments into their legislative process to ensure regulatory rigour and consistency across the national and county governments, as well as policy-making based on assessment of costs and benefits.
They will take into account the fact that some measures, although superficially beneficial to their communities, will end up driving up the cost of doing business, thereby making their counties uncompetitive.
Frequently changing regulatory framework may foster investment uncertainty, complicating the conducting of business across counties.
The result could be the “balkanisation” of the regulation of business across the 47 counties.
It will also lower foreign direct investment and encourage the manipulation of the market by those with better knowledge of local processes/structures, thus opening the way to unfair competition.
Counties are also favourably positioned to lead the Buy Kenya, Build Kenya initiative to amplify the skills and resources within their boundaries.
Instilling a sense of national pride in the quality of our local production and capacity to meet the demands of our population will encourage the growth of industry.
KENYA'S BUSINESS ENVIRONMENT
From a national perspective, great strides have been made in the effort to make Kenya’s business environment more competitive.
These include the launch of the Kenya Industrial Transformation Programme, the Special Economic Zones Act 2015, the enactment of the Companies Act 2015, the Insolvency Act 2015, and the Business Registration Act 2015.
Clearly, there is political will to establish Kenya as a stable and investor-worthy business environment.
There is a need for strong structures at the county level to replicate these efforts to open up regions to business with the aim of uplifting the overall living standards of Kenyans in all the regions.
Increase in trade and investment provides access to markets across the country and eventually the East African Community region.
If counties establish fair rules of trading with one another, strong value chains will be created, benefiting all, from producers to end-users. Also, the upsurge in investment would mean improved quality of goods.
The future of our country’s economic stability lies in the diversity of the 47 counties. That is if we put in the time and effort to harness it.
The writer is the vice-chairperson of the Kenya Association of Manufacturers. [email protected]