Government Economic Policy Must be Clearly Articulated for it to be Effective

By Phyllis Wakiaga

The competitiveness and profitability of any business is hugely impacted by changes in market regulations and government policies. It is for this reason that consistency in regulations and predictability of these policies is fundamental to the stability of local businesses, as changing them would require a major shift in long-term business plans and daily operations. Most often than not, if changes in policy are abrupt, then businesses tend to incur major costs in order to make the necessary adjustments and in some cases have to shut down entirely, laying off workers and bearing huge losses. But above all, any such changes made by government requiring businesses to comply within a certain period, need to be clearly articulated. That is, new policies need to be concise about the manner in which they will be executed and which authorities are charged with this execution. This is to avoid any vagueness or uncertainty which may then lead to a lot of businesses not being able to plan for the changes adequately.

A good case in point is the gazettement of the plastic ban. The gazette notice which was, in the first place, issued without stakeholder consultation has been vague in its articulation of how the ban will be effected. The Ban, as currently gazetted, is a total ban on all plastic bags including industrial plastic packaging​ since it affects plastic carrier bags and flat bags.

Firstly, it is important to point out that this clarity is needed for all manufacturers in order to subsequently make adjustments towards compliance by reorganizing their plans and internal operations. Businesses need to know how to proceed and which of these adjustments will be long-term or short-term and the eventual trajectory of their core businesses. Without this clarification, and barely 3 weeks to the implementation date, many businesses are in limbo, they are uncertain as to how to proceed towards complying with this new policy. In actual sense, flat bags are used in packaging of many raw materials including chemical powders, detergents, seedlings, bales of tissue paper, pharmaceutical products, processed foods and fruits, tea, confectionary, flowers and many more diverse products. A change in this packaging material has to have an impact on the overall cost of production and eventually on the price of the final product.

Secondly, as much as the Ministry of Environmental and Natural Resources and NEMA have made public statements to clarify the above, including posting FAQs on the NEMA website to provide answers, these will not serve as a legal document once the ban is effected. A legal document or regazettement of the specific items targeted in the ban will eventually work towards a successful implementation of the policy. At the port or any point of entry into Kenya, the authorities in charge make reference to an existing gazette notice to grant or deny entry of material and products. Businesses cannot refer the authorities on the ground to the NEMA website or a television interview. A legal document will not only ensure that the policy or regulation is carried out in a just and effective manner but it will also protect legitimate local businesses from unfair treatment and additional taxes. In petitioning the President therefore, manufacturers are hoping to get clarity on the way forward regarding the clarification of the execution of the ban.

Thirdly, the business community has shown willingness to comply and work together with the government to institute policies that guarantee a better future for all Kenyan citizens in many occasions and this is no exception. The achievement of a clean environment and sanitation for all, must be anchored on policies that are sustainable and all-encompassing. Such policies must be anchored on, and strengthened by adherence to due process. Moreover, for any policies to be effective in achieving the end goal, they must be supplemented through stakeholder consultation.

Lastly, stability of local businesses cannot be guaranteed with an unpredictable policy and regulatory environment, and this poses a threat to the overall economic stability of the country. The core sectors of this country’s economy stand to be affected by the ambiguity of this ban, these are floriculture, horticultural sector, Fish Processing, Cereal growers, pharmaceuticals, Agribusiness, tea industry exports and others.

The formulation of policies and subsequent execution, must indeed look at achieving economic progress for the country, but even more importantly, they must guarantee the well-being of citizens through provision of solutions that guarantee economic sustainability and inclusivity – a holistic waste management solution would achieve this entirely. It is therefore critical that policies developed are effected with a view that in 20 or 30 years, their goal has not only worked in the short term, but built a foundation for even more progressive policies to be actualized.

The writer is the CEO of Kenya Association of Manufacturers and the UN Global Compact Network Representative for Kenya. She can be reached at ceo@kam.co.ke.