Business Daily (Nairobi)

Kenya: Business Leaders Seek MPs' Help in Pushing Reforms

Wary of the slow pace of reforms aimed at improving the investment environment, business executives have set their sights on Parliament as a crucial lobbying arena.

Led by the American Chamber of Commerce of Kenya (ACCK), which brings together representatives of US firms with operations in Kenya, the local business community has resolved to court MPs and Parliamentary Committees to push through crucial reforms.

This represents a significant change of tack.

Previously, the business community has sought to influence business reform primarily through quarterly Prime Minister roundtable meetings (PMRT) held between industrialists and the executive arm of government.

The roundtable meetings have been criticised by some businesspeople as talk shops that result in little reform.

Business executives reckon failure to tame corruption, slow pace of licensing reforms and general disregard of enacted laws by some players have continued to taint the business environment and have called for fresh impetus to reverse the trend.

According to Nelson Githinji, the ACCK president, slow pace of reform is emerging as the principle cause of the high cost of doing business that renders Kenyan goods uncompetitive in both the regional and international markets.

"This initiative aims at a swift enactment of legislation to stimulate economic activity and spur growth, " said Dr Githinji.

The initiative kicked off on Tuesday with a meeting between officials of the ACCK and over 30 MPs under the auspices of the Parliamentary Reforms Caucus.

Apart from tax reforms, the PMRT has been pursuing other sectors for reform, including licensing, intellectual property rights, infrastructure, crime and the SME sector.

It has also sought to influence labour law reforms, robust ICT growth and transformation of agriculture to cope with modern production and marketing challenges.

The recently released World Bank Doing Business 2010 Report ranked Kenya at position 95, down 21 places from last year's position 74.

This suggests that the government is losing its grip on the reform agenda and in particular, of its bid to improve the business environment a process which it began four years ago.

The World Economic Forum also gives Kenya a low rank in its latest Global Enabling Trade Report because the country has not dismantled barriers to trade such as weak customs and border administration.

"We have been frustrated in the past but this must come to an end, " said Bill Lay, the managing director of General Motors East Africa.

"There has been inconsistent and selective enforcement of laws which must be urgently fixed by tightening various legislation."

The group has identified the enactment of the Proceeds of Crime and Anti Money Laundering Bill and business licensing reforms as the first agenda under the new initiative.

According to Dr Githinji, the group hopes to deal directly with specific Parliamentary Committees to push through a slate of legislation to improve business in Kenya, adding that the strategy is being adopted by other business lobby groups such as the Kenya Association of Manufacturers (Kam) and the Kenya Private Sector Alliance (Kepsa).

Mr Lay said by courting the MPs the group hopes to help get quicker solutions to problems such as the soaring crime rate, imminent power rationing and proliferation of counterfeit products which were worsening investment climate.

The initiative comes at a time when companies worldwide are increasingly turning to efficient means of production and other cost cutting measures to remain afloat as economic recession in key western markets and its contagion spread to regional markets weakening purchasing power.

"Political and economic reforms are key to positioning Kenya as an investment hub, " said Mr Danson Mungatana who is heading the reform caucus.

"We must push through land and constitutional reforms as well as a framework for ensuring equitable distribution of resources, " said Mr Mungatana.

An ideal investment climate can stimulate rapid capital inflows to help grow the economy.


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