Gov't pledges reforms to boost business climate in Kenya

The government has committed to implementing key recommendations by the private sector to improve the business environment in the country.

Speaking during a workshop on legislative reforms, the Cabinet Secretary in the Ministry of Investment, Trade and Industry, Salim Mvurya, acknowledged the need for business reforms to enhance the country’s economic performance.

The workshop, attended by business leaders from the private sector, government, and international partners, addressed several critical issues hindering growth.

Private sector players want the government to streamline the taxation policy for a predictable environment. They also called for the streamlining of business levies to reduce duplication.

"Some of the investors that we speak to talk about unpredictability when it comes to taxation. What we’re looking at is a long-term national tax policy that will give investors a plan. If they come into the country, they need to know what to expect over three, five, or even ten years," said Farida Abbas, CEO, British Chamber of Commerce in Kenya.

"The other issue is about levies and charges. The counties are also imposing many levies, and ministries and departments within other ministries are also imposing levies. This is causing a lot of unpredictability," Kenya Association of Manufacturers CEO Tobias Alando added.

The private sector also raised concerns over pending bills, particularly those owed to manufacturers.

According to Alando, the goal to increase manufacturing output from the current 7% to at least 20% of GDP and create over 1 million jobs, generating at least 1 trillion in revenue, is dependent on the sector’s ability to access capital, much of which is tied up in VAT refunds and pending bills.

"We have a lot of pending delays in VAT refunds, and the high cost of energy needs to be addressed for industrialization efforts to succeed],"he said.

The government however reassured participants of its commitment to creating a more business-friendly environment.

CS Mvurya highlighted that the government is focused on achieving Vision 2030's goal of transforming Kenya into a middle-income economy, with increased foreign direct investment and domestic direct investment.

He acknowledged existing barriers, such as high energy costs and complex tax structures, and pledged that the government would take concrete steps to address these issues while calling for collaborations to enhance Kenya's competitiveness.

"We will work on consolidating all the input and prepare a business reforms action plan report with clear agreed issues and an implementation matrix to resolve them, validated by you before being presented to Cabinet and Parliament," said Mvurya.

"The way we become globally competitive is not just about mega industries doing everything from procurement to selling the final product. The challenge we have with our industry is that we have mega factories without adequate support beneath the," Industry PS Juma Mukhwana added.