Trade and Industry secretary Adan Mohamed: We are very excited and will
continue improving with full involvement of private sector. file photo |
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Kenya’s attractiveness to investors improved 12 places, the
World Bank said in its latest ranking, ...
which also shows that slow registration of property and issuance of construction permits remain the biggest drags on the economy.
which also shows that slow registration of property and issuance of construction permits remain the biggest drags on the economy.
East Africa’s largest
economy finished 80th in the 2017 ease of doing business index that
surveyed 190 economies compared to last year’s position 92.
The
new ranking, the highest since 2008 when the country finished in 84th
position, means Kenya is the third most competitive economy in Africa
after Mauritius (25th) and Rwanda (41st).
“This is the
country’s best performance in 15 years and reflects a continuous
improvement process that is a good indicator for international
investors,” Trade and Industry secretary Adan Mohamed said in Nairobi.
“We are very excited and will continue improving with full involvement
of private sector.”
Kenya is, however, ranked worse
than the average score in seven out of 10 parameters assessed by the
World Bank, meaning the country faces a steep climb to achieve the
targeted 50th position in two years.
The worst
performance areas include registration of property where Kenya finished
in 125th position, dealing in construction permits (124), starting a
business (117) and trading across the borders (106).
The
report, which is based on data collected in the year ended June 1,
shows that investors take 61 days to register property in Kenya (going
through nine procedures) compared to sub-Saharan average of 59 days in
6.2 procedures.
Getting approval for construction
permits takes 159 days in 16 procedures compared to sub-Sahara’s average
of 147.5 days in 14.8 procedures. Kenya is, however, five per cent
cheaper in warehouse value compared to Africa’s average of 9.9 per cent.
Despite
the new Companies Act becoming law, it takes an average of 25 days to
start a business in Kenya compared to Africa’s average of 24 days.
Procedures for starting are nonetheless lower at six against 7.6 average for Africa.
On
getting clearance across the national borders, Kenya ranks low globally
despite taking an average of 21 hours compared to 100.1 hours in
Africa. This is largely because it takes an average of 12.7 hours to
finish a similar process in advanced economies.
Resolving
insolvency (95), paying taxes (92), and enforcing contracts (90) are
other areas where Kenya is performing poorly. Kenya is ranked best in
accessing credit at position 29, followed by protecting the rights of
minority investors (62) and getting electricity connection (71).
“You
may not see the impact right away, but some may start coming as
competition increases. Our work is to make sure there is that
continuation and improvement so that we have more and more businesses
setting up,” CEO of Kenya Private Sector Alliance Carole Kariuki said.
The
report cites six key reforms needed in starting a business, accessing
electricity, dealing with construction permits, paying taxes, accessing
credit and trading across the border for the country to improve its
standing on the list.
“Kenya made starting a business
easier by merging procedures required to start-up and formally operate a
business,” the group said in the report.
Removal of
0.1 per cent of environmental audit and 0.5 per cent building levy by
the National Environmental Management and National Construction
Authority, respectively, made it less expensive for investors, the
report says.
Access to credit information and paying
and filing of corporate income tax on iTax also improved in the year
period ended June 2017, the survey which focused on Nairobi says.
There
was also reduction in time for import documentation because of single
window system which allows for electronic submission of customs entries,
while reliability of electricity also improved on upgrade of
distribution lines and transformers as well as setting up a specialized
team to restore power when outages occur.
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