World Bank Doing Business in Kenya 2016 report

Following Kenya’s national commitment to devolving local government, its newly-formed counties are enacting significant reforms to improve the investment climate, in a bid to spur economic growth and reduce poverty, says the World Bank Group’s Doing Business in Kenya 2016 report.

The establishment of one-stop shops for multiple government services- known as Huduma Centers; sreamlined business startup requirements and increased transparency in property registration are among new measures being taken at the national and county level, finds the latest Doing Business in Kenya report, which covers 11 counties.

The report examines business regulations affecting domestic firms across 4 indicators:

• starting a business
• dealing with construction permits
• registering property
• enforcing contracts.

National-level reforms noted in the report, which covers a four year period from 2012-2016, include the 2015 Companies Act. The Act eliminated the requirement to have registration documents notarized before the Commissioner of Oaths, thus reducing the procedural complexity and time for starting a business.

READ: STEPS OF REGISTERING A BUSINESS IN KENYA

2016 also saw the abolition of the stamp duty on the memorandum and articles of association and the statement of nominal capital. Meanwhile, the Ministry of Land, Housing and Urban Development made its service charter available online this year; increasing transparency in registering property and giving clients access to critical information about the transactions they undertake at the Lands Offices.

These reforms have been matched at the county level with, for example, the opening of a Lands Office branch in Isiolo to facilitate property registration. There’s also the establishment of an electronic construction permit platform in Kisumu to speed up the process of obtaining a construction permit.

By far, the boldest county-level initiative is the Huduma Kenya Program, which has opened one-stop shops in 10 of the 11 counties measured. Huduma Centers offer a myriad of services, some of which facilitate local company registration and property transfers.

READ: TAX GUIDE FOR ENTREPRENEURS IN KENYA

Kenyan counties present a mixed picture of performance so far for entrepreneurs, who face an array of obstacles depending on where they do business. The report finds that no county does equally well in all four areas. It is easier to start a business in Uasin Gishu, deal with construction permits in Kisumu, register a property in Nairobi and enforce a contract in Busia. With the exception of Narok and Kakamega, all counties rank in the top half and bottom half on at least one indicator. Nonetheless, even in counties with lower rankings, good practices can be found to learn from.

The report finds no clear correlation between size (as measured by population) and the rankings.

However, not all changes have made life easier for entrepreneurs, with seven counties introducing regulations or practices that have increased either the cost, time or complexity to do business.

Busia, Isiolo and Kakamega significantly increased business permit fees for starting a business. Dealing with construction permits became more difficult in Busia, Kiambu, Mombasa, Nairobi and Uasin Gishu. This is despite the establishment of an electronic construction permit platform in Nairobi and Mombasa.

Doing Business in Kenya was carried out by the World Bank Group at the request of the Kenyan government, notably the Ministry of Industry, Trade and Cooperatives and the Kenya Private Sector Alliance.