President-elect Uhuru faces a crowded agenda

Jua Kali artisans at work: Jubilee Coalition manifesto pledged to establish enterprise zones in all 47 counties. Photo/File 

By ALLAN ODHIAMBO

In Summary

• Business leaders said they required urgent review of costly inputs such as energy, labour and transport that make it hard for Kenyan goods to compete in key markets.
• The new government is also expected to improve infrastructure and technology to ease the flow of goods from the port of Mombasa to the hinterland.
• Mr Kenyatta further faces calls for a harmonised tax system to lower the administration burden that weighs on investors.

President-elect Uhuru Kenyatta faces a raft of demands from investors hard-hit by the escalating cost of doing business and bureaucratic regulations that impede their competitiveness in local and foreign markets.

Business leaders said they required urgent review of costly inputs such as energy, labour and transport that make it hard for Kenyan goods to compete in key markets, slowing down exports growth.

“The net impact of these costs is reduced sales or high total production costs that make goods and services produced in Kenya uncompetitive. The cost of doing business in Kenya has continued to rise over the last few years, making it difficult for businesses to thrive,” the Kenya Association of Manufacturers (KAM) said in a petition to the new government.

Kenya’s performance in the World Bank driven Doing Business index has declined in recent years partly due to high costs and strenuous business regulations

The World Bank’s Doing Business 2013 report indicates that Kenya dropped to position 121 of the 185 economies surveyed from 109 the previous year.

The survey focuses on regulations applying to small and medium-sized domestic companies in 11 areas of their operations, including starting a business, dealing with construction permits, getting electricity and registering property.

It also assesses access to credit, protection of investors, payment of taxes, trading across borders, enforcing contracts, resolving insolvency, and employing workers.

“We need the new government to prioritise the provision of affordable, sufficient, reliable and clean energy to power industry even as it keeps an eye on quality and affordability,” said Betty Maina, the chief executive of KAM.

The business environment is a key determinant of the volume and quality of investment in an economy, employment, creation of jobs, revenue collection and the general well-being of society.

(Read: Stop corruption, business leaders tell next president)

KAM said the new government would also have to improve infrastructure and technology to ease the flow of goods from the port of Mombasa to the hinterland.

“The new government should prioritise fixing the port of Mombasa to unblock the logistics corridor and increase efficiency and productivity,” KAM said.

“Inefficiency at the port of Mombasa is the single largest contributor to the high cost of doing business on the Kenyan logistics chain.”

Ms Maina described the port as choking with recurrent cases of congestion that are largely caused by system failures and low labour productivity. Mr Kenyatta further faces calls for a harmonised tax system to lower the administration burden that weighs on investors.

“You need to make it less taxing to pay taxes. We need modern, competitive business taxes with reduced complexion and administrative burden,” KAM said.