KARIUKI: Consistency and reliability crucial to business growth - Daily Nation

Consistency and reliability crucial to business growth

Thursday November 8 2018

Vehicles

Kenya Vehicle Manufacturing in Thika, Kiambu County. The private sector will be central in the attainment of the plan to increase the contribution of the manufacturing sector to the gross domestic product, establish universal health care, ensure food security and provide more housing. PHOTO | FILE | NATION MEDIA GROUP 

By CAROLE KARIUKI
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During the past one year, it has become clear that the private sector will be central in the attainment of the plan to increase the contribution of the manufacturing sector to the gross domestic product, establish universal health care, ensure food security and provide more housing.

During the Speaker’s Roundtable held in early October in Kwale, we got an opportunity to engage in useful conversations with some of the men and women who make laws and approve regulations and policies for Kenya — the National Assembly.

LEGAL FRAMEWORKS

We at the Kenya Private Sector Alliance were pleased with the opportunity to point out some of the hurdles to the participation of private businesses in the activities that can make the achievement of the Big Four Agenda problematic.

The problems include the unpredictable and unstable policies and legal frameworks that make it difficult for businesses to plan ahead, and the high cost of production. Others are the effect of illicit trade on genuine business, the high taxes on a small tax base, and the short-term development plans at both the county and national levels that are often thrown out when there is a change in administration, as well as corruption.

FISCAL REGIME

Last year was a case study on the effect of political instability on the economy, while the lack of a stable tax and fiscal regime often means that businesses often find themselves slapped with taxes and levies they were not prepared for.

Over the past year, we have also observed that the Big Four Agenda has no point of convergence, partly because the bulk of the housing, agriculture and healthcare functions are under county governments.

LEGITIMATE BUSINESS

We have also seen some commendable progress towards keeping legitimate businesses in the market, with the war on counterfeits and contraband, a welcome action that acts as punishment and deterrent.

We were happy to secure a commitment from the National Assembly to speed up the enactment of the Statute Law (Miscellaneous Amendments) Bill, 2018, which provides stiffer penalties for counterfeit and illicit trade. More still needs to be done, though. Suppliers to county and national governments continue to face hurdles as their payments are withheld. Although we agreed that a new law may be necessary, this problem can be solved by strict adherence to contracts and the procurement law.

FIGHTING CORRUPTION

There is work being done, starting with the increase of their budgets, to enable the Directorate of Criminal Investigations, the Office of the Director of Public Prosecutions and the Judiciary to effectively play their part in fighting corruption.

In the short term, the National Assembly can help eliminate the taxes on agrochemicals and farm inputs, approve the policies that will help support local manufacturing and cottage industries, while making it expensive to import products that are being made locally.

NATURAL RESOURCES

The laws and policies needed to further improve the ease of doing business and making the economy competitive to investors can also be identified and rectified in a short span of time.

Some of the areas we agreed on are more long-term. Expanding the tax base, for example, will need well-thought-out policies, more work by the Kenya Revenue Authority and regular and structured engagements with all stakeholders. Streamlining the enablers of the Big Four Agenda will involve work on the Information, Communication and Technology, the Education sector (and the change of the system is a step in the right direction), land laws, energy and mining, and the environment and natural resources sectors.

BIG CONFERENCES

President Kenyatta’s frank admission, and his refusal to read prepared remarks, at the SME conference at Strathmore University in Nairobi on October 16, should serve as a wake-up call to all three arms of government.

This was an apt reminder that we cannot achieve much if it is business as usual even as we hold big meetings and conferences. With his directives to the ministries and agencies involved in creating the right environment for Small and Medium Enterprises, without any doubt, we hope to see some action within the government.

What the private sector hopes for is consistency by the government. Consistency and reliability will create the environment necessary for business to thrive and for the next four years, to help achieve the Big Four Agenda.

Ms Kariuki is the CEO of the Kenya Private Sector Alliance

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