Nairobi: Plans to set up a one-stop shop for business permits have stalled after differences over implementation. Head of public service Francis Muthaura had written to agencies involved in business registration such as the Kenya Revenue Authority to second their staff to the Kenya Investment Authority’s (KenInvest) offices where they would serve investors in one go from October 1. The initiative has, however, stalled following the emergence of another proposal to create an online system where investors can electronically seek and acquire certificates clearing them to invest in the country.
“There is a new proposal to have an online one-stop shop and presentations have been made to the various agencies involved in business registration,” a source familiar with the matter told the Business Daily.
The KenInvest’s acting managing director, Julius Korir, declined to comment on the shift to an online platform, saying the implementation of the one-stop shop lies with Finance PS Joseph Kinyua.
The initiative aim to boost Kenya’s position as a favourite regional investment destination to enable it compete effectively with rivals such as Rwanda whose stature has been rising according to World Bank “doing business” rankings.
Data from the KenInvest shows that the country’s foreign direct investment (FDI) stood at Sh145.9 billion in fiscal 2010/11, dropping by Sh100 billion from the Sh145 billion recorded the previous year. This was much lower than the 2008/09 peak of Sh163.4 billion.
An improved regulatory environment could boost more investments in the manufacturing, property, building, and services sectors that are most preferred by local and foreign investors.
Rwanda has a one-stop investor shop that has played a part in boosting its competitiveness. Rwanda has in the past few years consistently emerged tops in the World Bank’s Ease of Doing Business Report, pulling in billions of new investments. It was ranked 58 in the latest report, climbing from 67 the previous year and putting it at the top of Africa’s preferred investment destinations.
Data from the United Nations Conference on Trade and Development shows that FDI inflows into Rwanda jumped to $119 million in 2009, more than eight times the $14 million in 2005.
Kenya dropped three positions in the rankings to stand at 98, weighed down by relatively slow licensing processes, complex taxation procedures and high cost of registering property.
The report shows companies that have invested in Kenya fault a heavy regulatory burden that includes lengthier documentation for exports. It takes an average of 33 days to finalise the eleven procedures for licensing a business in Kenya, and three days in Rwanda.
A one-stop shop saves investors time by cutting excess red tape. The region is attracting billions of shillings from new investors seeking to tap the large consumer market under East African Community.