Home / Economics / Kenya Economics / Kenya Ranked 3rd best improved in ease of doing business in world – as shown by the World Bank

Kenya Ranked 3rd best improved in ease of doing business in world – as shown by the World Bank

Doing business has also been the interest of most global conglomerates, regional companies, and even local startups and SMEs. However, while other regions in the world have a progressive and conducive environment for business, the Sub-Saharan region has largely lagged behind. On the other hand, as the bug of globalization escalates, improvements in technology as well as the expansion for communication and transport has led to the advancement of the Sub-Saharan region as a prime hub for business ventures. Moreover, global competition, viable treaties and agreements, growing demand for goods and services within the region, liberalization and the relative political and economic situations has turned the Sub-Saharan region into a desirable market and focal point for international companies. Last year’s report by the World Bank showcases Kenya as the third most improved country in the world as regards the ease of doing business. Alongside other Sub-Saharan Africa countries such as Rwanda, Uganda, Mauritania, Senegal, and Benin, Kenya accounted for one of the top five positions globally as regards the overall improvement in the business environment. However, the dark spot on the World Bank report was that other Sub-Saharan Africa countries, for instance Eritrea, Central African Republic and Southern Sudan ranked among the lowest in the globe. The political instabilities, lack of infrastructural developments, lack of progressive reforms and legislations and the frequent occurrences of civil turmoil played a huge part in stifling the potentiality of conducting business in these countries. The improved business climate as per the report was attributable to a range of friendly policies by these governments; availability and improvement of the energy sector, enhanced trade across the borders, as well as the augmented rates of paying taxes.

The rankings by the World Bank reflected the underlying need to continue implementing reforms that enhance the ease of business, thereby increasing the participatory role played by the domestic entrepreneurs as well as the active aspect of international corporations. To signify the need for business reforms, almost thirty percent of the total business reforms recorded worldwide was from countries within the Sub-Saharan region. Essentially, the situation crafted improved economic systems with adequate and effective mechanisms. At a glance, it would be worthwhile to point out that the Kenyan government initiative of Huduma centers has increased the attractive nature of doing business in Kenya. How? Previously, registering a business company in Kenya took almost three months, and the process was laden with various hurdles not to mention corruption that heavily crippled the venture. Nowadays, the services offered by Huduma centers are devolved to regional units, thereby making it easier for anyone to register a business company in less than a month. The Kenyan timeframe for approving business companies is far less that the regional average and with few instances of bureaucratic hiccups. To an extent, the policy advocated by the initiation of Huduma centers is slowly but surely reaping fruits as regards the ease of doing business in Kenya. Other determinants that brought about the positive outcomes include the improved and effective channels of acquiring credit as well as the progresses made in the registration of property. It is even instructive to note that Kenya thrashed the likes of Nigeria in the World Bank rankings as regards enviable business environment, despite the latter having a huge workforce owing to its large populace, as well as having oil deposits that would naturally attract foreign investors. Progressively, the positive transformation in Kenya’s business context to a great extent lays its basis on several acts signed by the Presidency; the Companies Act, the Business Registration Service, the Insolvency Act and the Special Economic Zones Act, the Finance Act amendments 2015, and the Companies and Insolvency Legislation (Consequential Amendments) Act 2015.

So as to anchor growth, Kenya should not only make laws, but also make sure that these reforms and legislations are strictly implemented. In essence, such a situation would bring about an idyllic environment that subscribes to the fiscal and monetary policies, thereby buttressing the investment processes locally. Besides, such a plan would offer less pressure to the local financial markets and limit the levels of the public debt while increasing the viability and capacity of the domestic market and overall business environment. Additionally, the venture would escalate the infrastructural growth through projects meant to supports the investment schemes. To further enhance the sound policies that have been crafted, Kenya should also make sure that the manufacturing sector experiences growth and internal competition so as to craft a foundation for future improvement that includes more exports and the creation of more jobs for the locals. Furthermore, more dispute resolution mechanisms that relate to the commercial aspect of a business should be adopted so as to increase the region’s viability for potential investment ventures. Ideally, the procedure should also include the enforcement of contracts, ease of property transfer, and ease of acquiring business loans with an aim to scale up the rankings on the Getting Credit indicator and on the Transparency Index. Of great interest, these are two areas where Kenya lost out to Rwanda and Mauritius in the global rankings as per last year’s report by the World Bank. Overall, there is still room for improvement as regards Kenya’s enhancement in the business climate.

By Martin Wakaba – an entrepreneur who has several startup projects

About Mt Kenya Times

Check Also

The need for competent security strategies

Cases that arise from criminal justice can be forestalled if proper channels and strategies are …

Please Login to Comment.

Powered by themekiller.com