Politics to hold Kenya at ransom, says new report

Kenya National Bureau of Statistics (KNBS) chairman Terry Ryan speaks during the release of the 2015 Economic Survey Report at KICC in Nairobi on April 29, 2015. A report from KNBS titled Foreign Investment Survey 2015, says that corruption and access to land are also pertinent issues that need to be urgently addressed to attract more investments from multinationals seeking to set shop in Kenya. PHOTO | SALATON NJAU |  NATION MEDIA GROUP

In Summary

• A report from the Kenya National Bureau of Statistics (KNBS) titled Foreign Investment Survey 2015, says that corruption and access to land are also pertinent issues that need to be urgently addressed to attract more investments from multinationals seeking to set shop in Kenya.
• The survey notes that laying of the fibre optic cable and provision of mobile telephony, improved transport infrastructure and a streamlined tax regime have helped ease the cost of doing business in Kenya in the past two years prompting many companies to expand their facilities to enhance production.
• The KNBS report points out that the business environment could further improve if VAT refunds delays are addressed and all government services digitised.
• The survey, which targeted 736 enterprises noted that the past two years had significant Foreign Direct Investments from manufacturing, wholesale and retail trade.

By JAMES KARIUKI
More by this Author

The political environment in 2016 is expected to heighten security concerns for investors who have also called for stringent measures to be put in place to deter dumping of goods in Kenya.

A report from the Kenya National Bureau of Statistics (KNBS) titled Foreign Investment Survey 2015, says that corruption and access to land are also pertinent issues that need to be urgently addressed to attract more investments from multinationals seeking to set shop in Kenya.

While Kenya remains a favourite location for anyone seeking to tap into the East African market of nearly 180 million people, politics related to the general elections continue to worry investors.

(READ: Next year to be tougher as Kenya economic prospects dwindle)

The survey notes that laying of the fibre optic cable and provision of mobile telephony, improved transport infrastructure and a streamlined tax regime have helped ease the cost of doing business in Kenya in the past two years prompting many companies to expand their facilities to enhance production.

The KNBS report points out that the business environment could further improve if VAT refunds delays are addressed and all government services digitised.

While saying most regions are not easily accessible by road, incessant traffic jams need to be unclogged to reduce the amount of time taken transporting raw materials from the source to the factory and finished products to the market.

LEVIES

An emerging issue hindering business are the multiple levies introduced by county governments that are in conflict with national government trade licences.

In future, said the study, private sector players ought to be involved in formulation of policies that seek to regulate their operations within respective devolved units.

The survey, which targeted 736 enterprises noted that the past two years had significant Foreign Direct Investments from manufacturing, wholesale and retail trade.

Electricity, gas, steam and air conditioning supply sectors also boosted international trade in goods and services creating a wide range of employment opportunities for Kenyans.

The study called on the government to intensify diplomatic engagements with its neighbours to further improve the trading environment for goods and services.

This, it said, can also help Kenya to invest in other countries while expanding local facilities to take advantage of the expanded market.

The study projects that more companies will expand their Kenyan units as well as employ more locals in a bid to meet the expected rise in demand in the East African Free Trade area.

More women will be employed as companies seek to regularise their status in line with the Kenyan Constitution as well as diversify their range of products.