Kituyi urges Kenya to harmonise regulations on foreign investment

Deputy President William Ruto admires an architectural house model on display during Kenya Diaspora Easter Investment Conference at Windsor Golf Hotel, in Nairobi, on March 2, 2015. PHOTO | PSCU 

In Summary

• “There is no way an investor in agreement with the national government can then be thrown to the vagaries of county governments with a different set of demands,” Dr Kituyi said.
• Dr Kituyi said the county governments were introducing new demands when firms go to set up enterprises after signing agreements with the national government.
• International organisations funding many projects in agriculture, health and water are reported to be facing frustrations after some of the officials they have trained over the years are removed forcing them to retrain others.

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Streamline the regulatory regime on foreign direct investment to ease the setting up of enterprises in the country, Kenya has been urged.

The measure would go a long way in eliminating the differences between the national and county governments.

United Nations Conference on Trade and Development secretary-general, Dr Mukhisa Kituyi, said that some investors were frustrated when they signing agreements with the national government only to be referred to the county government at the implementation stage forcing them through other procedures and demands of the devolved units.

“There is no way an investor in agreement with the national government can then be thrown to the vagaries of county governments with a different set of demands,” Dr Kituyi said.

DEMAND PROFITS

He noted that some counties were demanding the sharing of profits among other demands that are likely to discourage investors.

Speaking during the Kenya Diaspora Easter Investment Conference, Dr Kituyi said the investors expected stable and predictable regulatory and administrative regimes when setting up businesses.

Some of the investors, who have faced multiple demands from various interested parties are those in mining, oil and gas sectors.

The latest controversy is on leasing of medical equipment by the national government from international companies, which some counties are resisting while making new demands on their operation.

Dr Kituyi said the county governments were introducing new demands when firms go to set up enterprises after signing agreements with the national government.

This, he said, could expose the country to hefty fines if matters are taken to the international commercial courts.

International organisations funding many projects in agriculture, health and water are reported to be facing frustrations after some of the officials they have trained over the years are removed forcing them to retrain others.

“We handle matters of unfair investment agreements and I can tell you that 98 per cent of the cases are won by the investors. There is need to rein-in ministers that disregard and cancel bankable investment agreements exposing the government to payment of huge fines. Some might say its not their care because its the public that pays but why waste public funds.”

UNPREDICTABLE

County governments have also been fighting off accusations of raising taxes and introducing new ones on businesses, which investors say is creating an unpredictable business environment.

The 47 counties have been lobbying to have more revenue-raising powers, leading to sharp reactions from the private sector.
Counties are responsible for basic health services, agriculture, local roads, water and waste management.