Thursday, October 1, 2009

Start your business in Narok instead of Nairobi

The Doing Business in Kenya 2010 report was launched yesterday, just on the heels of the annual Doing Business 2010 report. Globally, Kenya ranked 95 out of 183 economies. One of the reasons it takes longer to start a business in Kenyan localities is the many steps required: 3 more than the Sub-Saharan Africa regional average and 3 times as many as in Senegal.

Narok, Malaba and Thika lead the overall ranking on the four indicators measured in the report (starting a business, dealing with construction permits, registering property, and enforcing contracts). Isiolo, Nairobi and Kilifi lag behind other localities (see Table). Nairobi has the fastest time and lowest cost for starting a business, at 34 days and 36.5 percent of income per capita. But it lags behind other localities in the time needed to register property or enforce a contract through the courts.

The process to obtain construction-related permits and clearances is easiest in Narok, Nyeri and Malaba, but more cumbersome in Isiolo, Thika and Mombasa. Obtaining all permits to build a warehouse and hook it up to utilities takes less than 70 days in Narok, making it the 15th fastest location worldwide, the same as Denmark.

Registering property is fastest in Mombasa, where it takes 23 days (figure 1). In Isiolo, a special transfer tax levied by the County Council makes registering property almost as expensive as in the Syrian Arab Republic, the world’s most expensive place to register property.

Resolving a commercial dispute is speedy in Malaba, because the courts in Bungoma, where these are heard, are strict on adjournments. As a result, the 11 months needed to enforce a contract in Malaba are less than the OECD average (15.5 months).

Doing Business in Kenya 2010, the first subnational report on Kenya, suggests Kenya could improve its ranking by 17 positions simply by adopting best practices already in place in the 11 Kenyan localities covered in the report:
"If a hypothetical city, 'Kenyana', were to adopt the best practices already in place in Kenya, its ranking would improve in all four areas of regulation that are the focus of this study, putting 'Kenyana' in 78th place among the 183 economies measured in the global Doing Business report. That is 17 positions better than Kenya’s current global rank (represented by Nairobi)."
Here is the full 77-page report - which includes very valuable lists of all procedures to go through when starting a business in Kenya - plus the press release and a Powerpoint presentation. Just download, you won't regret it, it is good information.

If you would like to thank me for sharing this, please leave a comment.


Anonymous said...

Interesting. Thank you!

Mama Shujaa said...

Cool. Thanks for sharing.