Kenya refines laws to reduce to just 24 hours starting businesses


The duration taken by companies to register businesses in Kenya is set to reduce to just 24 hours beginning July this year. The new Companies Act is projected to lessen procedures and days spent when registering business in the country. Previously it took three working days to reserve a company name and thereafter 10 different processes that took another 32 days. If fully implemented, keen investors with ambitions to set up a business will be guided by a new legislative framework and court system currently in final stages of developments.

Speaking during an annual investor’s summit hosted by Kenya Association of Manufacturers (KAM), Industrialisation Cabinet secretary Adan Mohamed said that the anticipated Companies Act will ease means of doing business and protect consumers in a bid to attract foreign investments and external financiers. “We want to encourage the business community, with the help of KAM, to focus on opportunities with appetite,” said Mohamed, adding that through his industrialisation docket, he will work towards propelling the small and medium enterprises into fully operational manufacturing outfits.

Kenya has for long been flaunted as the economic hub and a favourable market place in the region, but statistics coming out tend to differ with this assumption. Mohamed said lack of transparency, openness in most regulatory offices, as well as information sharing, continue to derail the growth of Kenya’s economy. “There is need to conclude trade agreements and expand external markets by concluding regional, bilateral and other agreements and special arrangements that will deliver expansion of such markets,” said KAM chief executive Betty Maina.

“We hold the view that in the vision to industrialize Kenya, we need to put in place the right strategy and policies with the appropriate elements to encourage growth,” said Maina. The latest report ranks Kenya number 134 out of 185 in the ease of starting a business, which is a decline from number 128 last year. Kenya was also ranked number 163 out of 185 in property registration, worse indicators compared to Rwanda, where it takes a maximum of 24 hours to register a business. This also informs why the cost of production has remained relatively high in Kenya.

Betty said the manufacturing priority agenda (MPA) laid out by the association is going to have a great impact on the economy and manufacturing in particular. “Careful and consistent pursuit of the MPA and development of strategies that deliver on this agenda will allow Kenya to build a robust base for expansion of manufacturing nationally and and boost sustainable job creation,” she said.

Dr Lyal White, director, Centre for Dynamic Markets at the Gordon Institute of Science, however, believes that Africa will in the coming few years start realising its true economic potential based on the institutional evolution and progressive structural changes recorded across the continent over the period 2006 to 2012, which is also documented in the GIBS dynamic market index 2014. “African countries need to be more open and connected with each other and the world. Economic and social integration will be a key driver for economic growth and development; this will help create essential economies of scale and access to new markets,” said Dr. White.

The findings by GIBS grouped countries into categories based on extent they had improved or regressed according to the institutional measures used. Out of the 33 African countries measured by the Study, 23 of them representing 70 per cent were categorized as either ‘dynamic’ or ‘catching up’ displaying healthy levels of dynamism. Only 10 African countries are ranked in the top 100 on the Ease of Doing Business Index.

These countries include Botswana, Ghana, Mauritius, Tunisia, Morocco, Rwanda, Seychelles, South Africa, Namibia and Zambia with Kenya and other ‘un-ranked’ nations, categorized as African Countries, that still have a long way to go in ensuring their business ensuring their business environment is conducive to setting up and doing business. According to the World Bank’s ease of doing business report, economies are ranked on their ease of doing business with the list extending to 189 countries. This index averages the country’s percentile rankings in 10 areas made up of a variety of indicators relevant to the business environment.



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