OBG talks to Vimal Shah, Chairman, Kenya Private Sector Alliance (KEPSA)

Interview: Vimal Shah

How do you rate the level of dialogue between the government and the private sector?

VIMAL SHAH: It used to be that every association would go directly to the government and officials would get different views from all of them. The government realised this and requested they speak with a united voice. This is KEPSA’s role today, engaging at the top levels, whether it be with the president, judiciary, parliament, senators or governors. However, associations still do the groundwork at the local level.

The government is very receptive and our interactions are solid. They want ideas and this is exactly what the private sector does well. Following the 2013 elections, the beauty now is that technocrats are in government and not politicians. They have provided clear key performance indicators from the presidency. We are being listened to, but we have to be sure we are articulating the issues well and making ourselves understood through evidence. We have the hard facts that speak to the realities on the ground.

The weak point that we do have is entirely to do with implementation. The procurement process in government is far too bureaucratic and not transparent. There is a lot of room to remove duplication and wasteful processes that do not add value.

To what extent can the private sector play a role in terms of poverty eradication?

SHAH: Addressing poverty through economic means is essential. When we look at poverty eradication, it is done through job creation, and the basis of this is human capital. Today we have 66 universities in Kenya, and this has been a big economic driver.

When we create globally competitive human capital in Kenya, we have a resource that can be used for our own development, but is also exported across the globe. We have a diaspora of around 3m worldwide and they send back around $1m in remittances annually. We have opened up the free movement of goods within the East African Community. Though this freedom is not yet afforded to people, it will happen very soon and has been already implemented with Rwanda. Given how fast our service industries are growing, we will also become a servicing zone for all neighbouring landlocked countries.

There is a lot of informal business, and small and medium-sized enterprises have huge potential to become bigger. This is where a lot of incubation and venture capital is required, and it is just starting to happen. Universities have begun a process of mentoring and nurturing entrepreneurs, allowing them to come up with bankable business plans. Risk capital then comes in and creates partnerships. There are 45-50 private equity funds looking to invest across all sectors. The tried and tested investments may not be forthcoming, so they find alternative channels.

How can Kenya improve upon its role as a regional centre for East Africa?

SHAH: You have to look at where Kenya sits in the context of Africa. It is a logistical, financial and IT centre for the entire region. A number of major multinationals have headquarters here. It has a reliable economy, with good monetary policies and stable inflation. When you look at it from the perspective of it being a regional centre, it becomes a place to operate and use as a platform to go anywhere else.

Still, we have not represented our country as well as we need to. The government is a poor communicator of what it does, even though the integrity and the intent is there. In the past we have set up organisations such as KenInvest, the Brand Kenya Board and the Ministry of Tourism, all with a mandate to market the country, but without the firepower to actually do so. We have been wasting money on too many bodies without creating a unified image. Some people believe you have to improve the product and then market it. However, you have to market as you go, or else sit and wait for perfection, which of course does not exist. This sort of marketing is now required.