Kenya moves up a notch in ease of doing business ranking - CNBC Africa

Kenya moves up a notch in ease of doing business ranking

East Africa

by Elayne Wangalwa 0

Kenya has risen marginally in the 2015 World Bank’s Ease of Doing Business Index. PHOTO: Getty Images

East Africa’s largest economy moved up one position to 136 under a revised ranking methodology.

According to the bank’s report, Kenya’s costly dealing with construction permits and high permit fees, exorbitant taxes and other downsides did not allow the country to move up positions drastically.

The ranking gauges guidelines touching on domestic firms in 189 markets. The bank ranks the economies in 11 areas of business regulations from starting a business, resolving bankruptcy, enforcing contracts, getting electricity, registering property and trading across borders.

According to Carole Kariuki, CEO of the Kenya Private Sector Alliance (KEPSA) the data of the bank’s survey is inconclusive since a lot of reforms have happened in the East African country.

“These latest results do not capture the reforms undertaken by the government in the last 12 months…We see an improving business climate as a result of the reforms that various government agencies have undertaken over the last 12 months but more need to be done and more continues to be done,” Kariuki said.

The report stipulates that it takes 32 days for a business to be registered in the country yet the process now takes just 24 hours. The report also indicates that its takes 158 days for a business premises to be connected to electricity but according to Kariuki it only takes 30 days.

Kenya’s Cabinet Secretary for Industrialisation and Enterprise Development, Adan Mohammed believes the statistics are ‘skewed’ since they are only using 10 indicators to measure the ease of doing business in Kenya and very few respondents.

“The Kenyan government will start a 40 member panel to look through the report and also come up with another report that highlights ease of doing business in the country,” Mohammed said.

Earlier this month, the Kenyan government established a Business Environment Delivery Unit in order to address challenges facing investors in the country.

The country is targeting to be in the top 20 position in the ease of doing business annual ranking by the year 2020.

Meanwhile, Rwanda has dropped from position 32 to 46. This was not due to negative change on the ground with respect of doing business in the East African country but a change in what numbers were collected and how the numbers were put together in the ranking.

Since its inception 10 years ago, the Doing Business report by the World Bank has captured more than 2,400 regulatory reforms making it easier to do business.

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