Kenya up efforts to better business environment

By Douglas Namale:

Treasury CS Henry Rotich, outside parliament buildings
Treasury CS Henry Rotich, outside parliament buildings

The Companies Act 2015 has transformed the business environment in Kenya. The act has reduced time required for payments of stamp duty, all documents required are digitized, and one does not need an attorney to register a business if the company’s minimal share capital is below Ksh.5 million. The act allows an individual to register a private company while public companies can be registered with a minimum of two directors.

The application and reservation of a business name can be done online using eCitizen platform or mobile phone by dialing *271# on a Safaricom line. Those challenged with technology, can apply through Huduma Centres countrywide.  All documents required are found at eCitizen platform, attorney generals website and Kenya law reports portal.

The company application form also has other relevant documents needed for a company operation. While applying for the company registration, the form includes Kenya Revenue Author Personal Identification Number (PIN), National Health Insurance Fund (NHIF) and National Social Security Fund (NSSF) registration too. Other documents you download and fill are statement of nominal share capital, notification of directors’ residential address, articles of association, and model memorandum of various company types.

Business registration devolved

Late last year the government established the Business Registration Service Board to assume the services previously done by registrar of companies, under the state law office. The Service is offering services such as incorporation of companies, registration of business names and partnerships among others. For the first time, these services will be devolved, drastically cutting the costs of registration and operations which were a preserve of Nairobi. This is a revolution aimed at increasing efficiency in the sector, which has previously been blamed for scuttling investment.

Formation of this Service is the first step in implementing the Business Registration Service Act 2015, and six other statutes all aimed at making Kenya an investment hub in Africa.  The Service is headed by the registrar-general, responsible for the overall operations of the Service and its staff.  Its headquarters is in Nairobi, but it’s in the process of establishing offices across all counties. Currently, they have desks in all Huduma Centres countrywide.   For foreigners who want to register businesses locally, Brand Kenya portal offers a one stop shop for all the information you need.

County governments are equally embracing technology to improve business environment.  Nairobi and Kiambu county governments have equally made it easy for those seeking various licenses to operate. The single business permit which took more than a month to get, now takes less than five minutes. All you need is an account in their jambopay portal, and the rest is as easy as you can imagine. You fill in your details, pay via a mobile wallet, and print your license hustle free. Other counties are equally starting to embrace technology to improve their competitiveness.

Transfer of assets and access to credit

Kenya has past Stamp Duty Act 2012, which has reduced the time to access and pay stamp duty to maximum 30 days. Records at Ministry of lands digitized, making it easier and faster to register or transfer property. Access to credit has equally improved by streamlining access to information by passing legislation that allows sharing of positive information and expanding borrower coverage.

Economic prospects

Last year, the World Bank released a report painting a juicier image for the country. The report dubbed   Anchoring High Growth: Can Manufacturing Contribute More?  Indicated Kenya had a sound fiscal and monetary policy, supporting her investment in infrastructure projects without putting excessive pressure on domestic financial markets while at the same time, keeping public debt within the 50% threshold. World Bank Group country director Kenya, Diarietou Gaye says “Kenya is emerging as one of Africa’s key growth centers with sound economic policies in place for future improvement”.

Her sentiments are echoed by Maria Paulina Mogollon, World Bank Group private sector development specialist who co-authored the report.  Mogollon said “Kenya needs to increase the competitiveness of manufacturing sector so that it can grow export and create much needed jobs”. The report shows Kenya has strength in infrastructure, agriculture, and banking. Other potential areas are financial industries, and manufacturing, placing Kenya as one of the fastest growing economies in East Africa.

Reacting to Mogollon’s sentiments to improve her manufacturing competitiveness, Kenya has reduced the cost of connecting to electricity by 50%, increased her investment in electricity generation, and she is currently building a parallel grid system to deal with power outages. The country has also seen access to electricity grid grow from 25% in 2010 to 47% in 2015.  This unprecedented growth has seen 1.4m people connected to electricity in 2010, increase to 4.3m people in 2015. Electricity connection has improved with introduction of service delivery timelines which are strictly enforced.

Conference Tourism

Recently, Kenya has emerged as a key conference tourism destination in Africa. For the last three years, the country has hosted key global events and attracted key personalities to Nairobi.  Among key events Kenya has hosted include Global Entrepreneurship Summit, 2015, World Trade Organizations Ministerial Conference 2015, among others. The country has equally hosted regional and continental conferences, making Nairobi a key conference tourism destination on the continent. This has seen the city attract key hospitality industry players like hotel Radisson Blue and Villa Rosa Kempinski which hosted US president Barak Obama last year.


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