Overreaching regulations impeding SME growth

Manufacturing Small and Medium Enterprises (SMEs) have urged government to harmonize laws, policies, regulations and standards governing their operations, at the national and county levels.

They were speaking during the SMEs Regulatory Bootcamp, organized by Kenya Association of Manufacturers (KAM), to unpack the environment in which SMEs operate in. 

The Principal Secretary, State Department for East African Community (EAC), at the Ministry of EAC and Regional Development, Dr Kevit Desai, noted the importance of synergy between government and the business community. 

“Our thoughts, as government and the business community, need to collectively address challenges in policies, legislation, regulations, standards, and facilitative actions such as infrastructure. By involving the private sector, we shall give them an opportunity to play a more active role in creating an effective ecosystem, as well as an enabling and predictable regulatory business environment,” explained Dr Desai. 

Ministry of Industrialization, Trade and Enterprise Development Director for Enterprise Development, Ms Nancy Muia, highlighted Government’s continued commitment, to drive SME growth, saying, “As government, we continue to promote value addition, develop and implement policies to aid in SME development such as the Local Content Policy, promote foreign direct investment in industry as well as establishing special economic zones and industrial parks. Additionally, we have also established various funds, to support SMEs. We have SME Support centres across the country, to enhance their access to information, and enable them to understand Government initiatives.” 

KAM Manufacturing SME Hub Chair, Ms Ciiru Waweru, explained that numerous regulations and an arduous regulatory regimes make it difficult to invest in Kenya. 

“When effectively implemented, regulations create an enabling environment for competitiveness by enforcing fair business practices, driving equal opportunity and inclusive participation of all in the economy. However, when overdone, the end goal is a zero-sum game. It stifles Manufacturing SMEs’ growth, and reduces their competitiveness and productivity at the local, regional and international markets,” said Ms Waithaka. 

Ms Waithaka called on government to harmonize the various regulations, adding that, “For any investor, policy and regulatory predictability and stability are paramount. Predictability and stability lead to investor trust, which is essential for making sound decisions on scaling up their businesses and in investing in new markets. National and county governments should prioritize the involvement of manufacturers whilst formulating laws, regulations and policies. By doing so, the laws, regulations and policies will be industry-centred, in turn, support competitive industrial development.” 

The boot camp was attended by representatives from Kenya Revenue Authority (KRA), Kenya Bureau of Standards (KEBS), National Environment Management Authority (NEMA), Kenya Industrial Property Institute (KIPI) and Competition Authority of Kenya (CAK).