Remove trade blocks for business growth
Kenya’s otherwise impressive standing in World Bank’s Ease of Doing Business Index should not be taken as a turning point in the country’s economic fortunes. Stepping up five points from position 61 must not blind Kenyans to the fact that things on the ground are absolutely rosy.
It can only be taken as a boost to the government’s ambitious target of breaking into top 50 nations on the ease of doing business ranking but it lacks the trickle down effect with parameters including acquiring construction and property permits featuring. Despite capping of interest rates hampering credit access, the country apparently edged up even in this standing, making Kenya seem to be a magnet for Foreign Direct Investment (FDI). This ranking can only help to paint a general picture compared to other jurisdictions and the fact that other countries could be going through worse times cannot help Kenya’s case.
More must be done for the ease of doing business improvement to have trickle down effect, however, but it must never be used as a measure of prosperity. To get the pulse of the country’s economic fortune, one only needs to look at the productive sectors and the labour markets. The small and micro-enterprises, particularly the jua kali sector, which is among the major drivers in labour absorption has not been expanding as fast to meet the demand, at a time the traditional sectors such as the agriculture and manufacturing are suffering.
The horticulture sector has been laying off employees citing difficult business environment with companies such as Finlay Kenya laying off 1,000 this month with several companies saying they are planning to relocate. On their part, most manufacturers have indicated in a survey among themselves that most will be laying off staff in the next six months with several companies having already fired hundreds of staff.Could government’s Big Four agenda, which is banking on Build Kenya Buy Kenya to spur growth among local manufacturers and create jobs boomerang on policy direction? Most firms such as Unilever which were the toast of Kenya’s manufacturing prowess have since relocated and the vacuum left has not been filled. Evident in retail shops and supermarket shelves are expensive and unaffordable imported brands taking up bulk of position where previously only a few multinational brands sat. Something must give for the economy to prosper.