Carole Kariuki, CEO, Kenya Private Sector Alliance (KEPSA): Interview

Interview: Carole Kariuki

What would you identify as the main obstacles to doing business in Kenya?

CAROLE KARIUKI: While significant progress has been made in terms of improving the business environment, there is still much work to be done, and making it easier to do business has been adopted as a central focus by both the government and the private sector. Some of the most pressing issues are the number of procedures, transaction costs and delays related to acquiring construction permits. Lengthy down time on the e-citizen government portal where land and company name searches can also take place means that there is an opportunity for government to improve on its ICT infrastructure. There is also the lengthy time it takes to resolve commercial disputes and a chance to fast track the National Single Electronic Window System all remain issues of interest to the private sector. All these issues together with strengthening areas where we have registered reforms are where we are focusing our efforts at the moment.

We expect to see significant progress in the coming months in this regard. We are also working together with the government in its anti-corruption efforts, as we know that the perception of corruption, as well as corruption itself, is a significant obstacle in Kenya. One solution is the automation of procedures and the gradual movement towards e-government services. The government has made great strides in this regard, as well as in implementing a one-stop-shop for investors. The one-stop-shop especially should improve the business climate in the country by ensuring that procedures will be simple and efficient. Where compliance is simple, straightforward and inexpensive, everyone is better off.

To what extent will a declining shilling and rising interest rates affect the business environment?

KARIUKI: The drop in the shilling does of course have an effect on the overall health of the economy, and the government is currently working to address the situation. A declining shilling can exert significant upward pressure on the import bill. Yet despite recent movements in the shilling and interest rates, the macroeconomic environment in Kenya remains stable.

Where do you see potential for improvement in the dialogue between business and government?

KARIUKI: The dialogue has improved significantly – in fact, we have never seen it as healthy as it is now. It is very encouraging to see the national government’s co-operation in terms of improving the business environment in Kenya. We have seen an increase in the level of transparency and the speed with which state agencies communicate changes to regulations that impact the private sector.

How do you rate the EAC efforts to remove non-tariff barriers (NTBs) and better facilitate regional expansion?

KARIUKI: There are many steps that have been taken at a regional level, especially regarding NTBs. The issue right now lies with implementing the laws; while there are many regulations and agreements that are in place, this does not mean we have full compliance.

We can see significant improvement in co-operation and collaboration among the countries of East Africa. For example, the various transport projects, such as LAPSSET and the Northern Corridor, are very exciting. They open up opportunities for the private sector to invest and participate in large-scale government projects across national borders, which has created a great platform to improve dialogue between the private sector and the entire EAC region.

This developing dialogue allows an investor to look beyond just one country and to consider the entire region as a whole. The regional market has very attractive investment opportunities, for both multinationals and local companies, large and small.