04/16/2013

News / New Kenyan president promises to streamline business licensing process

Businesses will have an easier time obtaining a business license in Kenya, the country’s new president Uhuru Kenyatta said during his inaugural address. Simplifying the business registration process is just one aspect of Kenyatta’s bold plan to streamline Kenya’s notoriously complicated bureaucracy

Businesses will now be able to apply for and obtain a license at the same location. This one-stop business license solution should reduce the time needed to get a license, and should encourage all enterprises, particularly smaller ones, to get registered.

Discouraged by long waits and complicated application procedures, many small and middle-sized businesses have long shunned licensure, preferring instead to bribe police officers, and operate covertly and unofficially. This not only put both businesses and clients at risk of malpractice, but also deprived the government of much-needed tax revenues.

Kenyatta’s plans also involve overhauling the procurement process, which is currently rife with corruption. His other plans are outlined in the election manifesto of the Jubilee Coalition and include the creation of an office for the representative of the business community in the Office of the President. The representative is to serve as a liaison between President Kenyatta and the business community.

The president’s moves have largely been praised by the business community.

“His remarks and early signs indicate that he is ready to closely engage the private sector,” Patrick Obath, the chairperson of Kenya Private Sector Alliance (KEPSA), was quoted by East Africa Business Week as saying. “This is a very positive gesture for the good of the Kenyan economy. We have in the past lost huge investment opportunities due to lack of goodwill from state players. This is a major step forward for the country.”

The government’s commitment to improving the business environment will pay off by stimulating investment and reducing the cost of doing business, thus boosting economic growth, Obath noted.

Kenya’s bureaucracy has long been accused of inefficiency and corruption, and has been seen as the main culprit behind the country’s slow economic growth and inability to attract foreign investments. Kenya ranks 126th out of 185 economies in terms of ease of doing business.

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