•Counties and national government have also been challenged to improve infrastructure, including electricity, water, roads and waste management.
•The overall business climate and cost of operation are inhibiting firms’ and industries’ productivity and potential for creating jobs and investments, KEPSA has noted.
The private sector wants improved governance and a reduction in the costs of doing business at county level to support their growth.
Led by the Kenya Private Sector Alliance (KEPSA), the business community wants legislation such as the County Government Revenue Raising Process Bill and the Investment Promotion Facilitation Bill 2024, to create a better business environment.
Major challenges affecting businesses include licensing, corruption, self-regulation and public security.
A recent study by the Kenya Institute for Public Policy Research and Analysis (KIPPRA) shows self-regulation (38%) and licensing (31%), were the biggest challenges for businesses in 42 counties, followed by public security (22%) and corruption (9%).
There have also been concerns over double taxation, with both the national and county governments targeting revenue from the same businesses.
Movement between counties also attracts cess and other levies including advertising, with counties urged to harmonise levies to avoid overcharging traders when transporting goods from one county to another.
The overall business climate and cost of operation are inhibiting firms’ and industries’ productivity and potential for creating jobs and investments, KEPSA has noted.
Further, enterprise support and finance gaps remain despite efforts to foster county-level economic growth.
“Inadequate local business support services, access to capital, export assistance, investment promotion, incentives, and business development services hinder business growth and sustainability,” KEPSA chief executive, Carole Kariuki, said in a statement yesterday.
This follows a roundtable meeting between KEPSA and the Senate in Mombasa this week, which set the legislative interventions agenda for Financial Year 2024-25, to boost county economic competitiveness and drive Kenya's business growth in a changing geopolitical landscape.
It focused on integrating counties and facilitating smooth business operations to create wealth, jobs, and inclusive prosperity in Kenya.
Senate Speaker Amason Kingi said: “The Senate fully shares the view that a vibrant and flourishing private sector is essential for wealth and employment creation and sustainable development in our country.
There has been an aggressive move by both the national government and counties to increase revenue collection, with businesses being among the main targets amid struggles to remain afloat.
A 2024 survey by GeoPoll conducted in Ethiopia, Kenya, Nigeria and South Africa, shows Kenya’s MSMEs had the highest number of lay-offs, temporarily halting of work and salary reductions for employees in the last two years among key economies in Sub-Sahara Africa.
The “Africa MSME Pulse Survey- 2024 indicates “a troubling trend” of workforce reductions, with 40 per cent of respondents indicating they had to lay off staff in the past two years as a way of staying afloat in a tough operating environment.
Counties and national government have also been challenged to improve infrastructure, including electricity, water, roads and waste management, and improve efficiency at the Mombasa Port, all geared towards improving business growth opportunities.