Counties must focus on attracting investments

By Sachen Gudka

The idea behind the decentralization of Government into devolved units was a noble one. Its main intent was to ensure that each and every Kenyan citizen can have an equal chance at living a productive quality life. The devolved function of Government was envisioned to enhance equitable distribution of wealth and increase access to social amenities, which are central to our collective goal of poverty reduction.

The Big Four Agenda was mooted as a roadmap to achieve these things much sooner and in a more sustainable and impactful way. However, there seems to be a disconnect between the national vision, and the counties’ operational framework that could potentially compromise the realization of the set economic goals. It is possible that this tension arises out of the County’s need to raise its own revenue to supplement the National Government, and the everyday reality of county’s’ own economic and social gaps.

So we find ourselves in the current situation, where very few counties can be said to have figured out how to turn their natural resources into sustainable revenue generation sources. Additionally, out of 47 counties, less than 5 have come up tailor-made economic solutions that supplement social welfare needs of their citizens. The question then becomes, how can we move from having Makueni County as the sole outstanding example on home-made economic solutions, to making it a norm across the country? Of paramount importance is the need to attract long-term, sustainable investments into counties.

Infrastructure

One way to do this is through infrastructure development. Counties need to send a strong message to investors that business can be conducted seamlessly and effectively within their borders especially in industrial towns. When investors perceive an environment to be hurdle-free, it is easy for them to plan long-term investments, becoming development partners who supplement the county government’s efforts. To make matters worse, many counties are resorting to charging exorbitant land rates in regions where infrastructural investments are yet to be made, and this becomes a huge deterrent to current and potential investors.

Single Business Permit

Secondly, the issue of the implementation of the Single Business Permit has remained a persistent barrier to growth of businesses in counties. The original intent for this permit was to streamline the county government’s revenue collection channels and make it less burdening to businesses. However, the current scenario is that businesses continue to incur costs in multiple permits and licenses over and above the single business permit. Meanwhile the cost of obtaining each permit is high and many of the firms, especially SMEs, shy from expanding their business plans.

The multiple levies and fees challenge links back to the revenue sharing formula which encourages counties to optimize revenue-raising avenues. On this end, manufacturers and other businesses have made proposals on how to remedy this situation and these have been included in the County Revenue Raising Regulation Process Bill. It is imperative that this bill, currently awaiting gazettement be fast-tracked.

Partnerships

In April, Manufacturers will be exhibiting their products and capacity at the Changamka Kenya Festival organized by Kenya Association of Manufacturers. It is imperative that Counties actively take part in this initiative to find potential development partners in industry that can uplift their populations and also to incentivize them to invest in their counties. Investors, both local and regional, will be looking for potential places to grow and expand their businesses and to discuss long-term Private-Public Partnerships.

Attracting and retaining investments in the county means that these businesses partner with county governments to enhance development through building infrastructure, restoration of natural resources, refining the education curriculum and offering productive jobs, in order to raise the living standards for every Kenyan throughout the country.

The Writer is the Chairman at Kenya Association of Manufacturers and the Vice Chair of COMESA Business Council. He can be reached on info@kam.co.ke.