Kenya’s remarkable rise in the latest edition of the World Bank’s ease of doing business report is a testament to the power of practical reforms in transforming the business environment. At position 108 globally in the survey covering the year ended June, Kenya has moved up 28 places from 136 the year before and is the most improved economy in Africa.
The opening of Huduma centres, which avail several government services in one place, is part of the boosters that has seen the country rise in the global league table. Compared to previous years, Kenya was found to have made relatively more progress on issues like how easy it is to start a business, deal with construction permits, get electricity, register property, get credit, and pay taxes.
While the reforms are commendable, the recent deterioration in the macroeconomic environment is a major damper. For reforms not anchored in sound economic fundamentals does not really help investors or indeed the man on the street.
Kenya’s ballooning trade deficit, revenue shortfalls and runaway public spending have coalesced into the latest episode of a weak shilling and interest rates approaching 30 per cent. It is tough to maintain high economic growth rates in such an environment, with the key catalysts in the form of spending and investing hamstrung by the high cost of credit and imported inflation.
It is therefore imperative that the government addresses the structural weaknesses in the economy.
Fixing these will provide a strong base on which the business reforms can really work their magic of reinvigorating local entrepreneurship and attracting foreign investments. While at it, the government will also do well to maintain consistency in how it receives and acts on the World Bank reports.
Just last year, Industrialisation secretary Adan Mohamed dismissed the survey as inaccurate. It was clear that the government was not happy with position 136, with Mr Mohamed saying ongoing reforms had been ignored. Fast forward to this week and the government could not wait to shout about Kenya’s improvement in the latest edition of ease of doing business.
Deputy President William Ruto and Mr Mohamed were on hand to take credit and no reservations about the findings were expressed. It would serve us well if we use the reports consistently and honestly, constantly seeking to make improvements regardless of our ranking. After all, we are in a race against the best.
The government can also help shed light in the debate by availing detailed statistics on the number of business registrations –for example— whenever it seeks to dispute the researcher’s findings.
Source: Business Daily

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