Friday, Dec 15, 2017
Industry & Trade | Africa | Kenya

Promoting and protecting business in Kenya


3 years ago

KNCCI
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Mr. Kiprono Kittony

Chairman of the KNCCI

With a vision to promote, protect and develop commercial, industrial and investment interests of the Kenyan business community, the Kenya National Chamber of Commerce and Industry effectively plays a central and catalytic role in facilitating the growth of the Kenyan economy. Chairman of the KNCCI, Mr. Kiprono Kittony, talks to United World.

Kenya is going through an exciting time at the moment. In a period of global economic recession Kenya is one of the fastest growing economies in Africa and is expected to have a GDP growth of over 6 % in 2014. What role do associations such as yours have in this impressive economic growth?

Let me contextualize the fact that chambers have been in existence since 1599. The first chamber globally was founded in Marseille in France. The role of chambers is to promote trade and investment as well as deepen protect and preserve the interests of the private sector. It is an exciting time for us in Kenya because the government of President Kenyatta through Executive order number 2 moved the function of International trade to the Ministry of Foreign Affairs thereby mainstreaming the agenda and ensuring that the country does more trade and is involved in a lot more commercial interaction with the rest of the world.

What are some of Kenya’s competitive advantages in the region, what differentiates your country from its neighbors’ and the rest of the African continent?

One of our biggest competitive advantages is the fact that we are on the shoreline of the Indian Ocean. We are sitting right in the middle of the equator which gives us perfect climatic conditions. We have some of the most skilled human resources in this region; If you compare Kenya with more developed countries on the African continent such as South Africa you will realize we have a richer source of human capital in Kenya. Forex repatriation is the second largest income earner for the government. The other competitive advantage is the fact that we have good infrastructure at the moment which makes the movement of goods and services in the country easy. We have had a fairly liberal economic and diplomatic policy since independence as such Kenya has been able to foster good relations with most countries. This is the reason why the current Chairman of the African Union is our president his Excellency Uhuru Kenyatta. Another big competitive advantage that has lately come to fore is the fact that this country is at the gateway of the East African Community. We enjoy a big coastline, we have deep water ports in Mombasa and a new port is being built in Lamu. The other competitive advantage is the integration of the countries development plan into a single integrated plan known us vision 2030 that clearly outlines where we would like to take the country in the coming years. Having determined where we want to go the challenge is how to get there. The latest competitive advantage is the fact that we discovered fossil fuels, we will wait and see whether it is a curse or boon based on what we have seen in other emerging economies, however I am sure we will be up to task to take this country to the next level.

Transparency and reduction of poverty through economic growth are the top priorities of President Kenyatta’s government, how would you grade the government’s performance so far in this regard?

The fight against corruption is a very complex topic to discuss especially in the developing world. The government has definitely energized the fight against corruption but to say that they have scored well will be to pre-empt the results of what they have done with regard to corruption. One thing that I don’t doubt is the government’s commitment to fight corruption.

The mandate of the Kenya National Chamber of Commerce and Industry is to promote, protect and develop both the industry and the private sector as well the commercial and manufacturing sectors, how do you achieve that on a day to day basis?

The chamber basically does four things. We organize trade fairs and exhibitions, we organize also trade missions. Last year we had several high profile trade missions together with the government, we have been party to state visits to China and other countries in the world. We also plan to visit the United States of America in August this year. We promote international trade through linking business people by using the Chamber as a platform. The chamber exists in 177 countries in five continents globally. I belong to the World Chambers Federation global council and we are out to promote the linkage of countries and the breaking of trade barriers that make it difficult for nations to do business together. In Kenya we have taken the stance seriously and we are looking into Intra African trade. Most influential people have travelled to Europe but have done little travel in the African continent; this gives us the drive to enhance intra African trade.

Your chamber also works with the government to ensure that public policy reflects business friendly procedure and regulation. How is your relationship with the government?

The chamber’s unique position arises from the fact that there is no other business association with International linkages and the fact that the chamber is fully devolved. Kenya is now devolved into 47 counties and the chamber exists in 42 of the 47 countries, we become the natural partner for the government in establishing the sentiments of the private sector and that informs the policy position of the government. The chamber has organized governor’s roundtables in several counties and we continue to engage actively with the county governments at the devolved level. We are the natural partner for the government in International trade.

In a recent interview you noted that Kenya not always had a good reputation for ease of doing business. We know that this is one of your priority areas as Chairman of the Chamber of Commerce and Industry, can you tell us your plans in so far as this area is concerned?

We haven’t done well in so far as ease of doing business is concerned and that is an area we are focusing on. Coincidentally today I attended the rapid response initiative in Nairobi. Last week our president launched the rapid response initiative. A lot has been done and I am confident that all factors remaining constant the next ease of doing business index will reflect an improvement on Kenya’s status.

With regard to the Chamber, who are your largest members, how do you interact with them?

At the moment we have 12,000 members both corporate and individual members. Recently we introduced a patron membership class made up of Kenya’s top businesses. It’s quite unique that the chamber has membership from the highest to the lowest. We also have stall owners as members of the Chamber paying an annual membership fee of 500 shillings. We cover a broad spectrum of the private sector.

How do you interact with other associations in Kenya such as KEPSA?

I am a board member of KEPSA and it is positioning itself as an umbrella body of other business membership organizations. KEPSA is not devolved; its membership is derived from other associations. They have been very articulate in issues of policy and that is an area that will work well because they have developed unique expertise in guiding government on private sector policy. We also have the Kenya Association of Manufacturers, the Federation of Kenya Employers that is playing a very useful role. Our position as Chamber is to co-exist harmoniously with these bodies and we are all working towards common objectives of our private sector and improving our country.

We have also talked about how America has shifted its economic policy towards Africa with programs such as AGOA, Trade Africa and power Africa have you seen any tangible results of this program, how would you grade these programs efficiencies so far?

I would say that the Africa trade and opportunity Act (AGOA) created many employment opportunities. It granted us access to the American market. There are many ongoing initiatives to expand access into the American market even though we still face immense challenges; my take is that America needs to look at emerging markets such as Kenya as sources for value addition in order to access the large markets in the United States of America. We have done a lot even though there is still plenty to be done. In August 2014 we will have extensive meetings in the United States to address the issue of market access. We have seen a lot of funding and support for capacity building coming from organizations such as CIPE (Centre for International Private Enterprise). We look at the United States as one of the key development partners of this country.

There are thousands of potential investors who could be interested in the Kenyan economy; can you highlight a couple of sectors or areas that they should look at in the Kenyan Economy?

One big opportunity lies in the emerging oil and gas industry. There are also huge opportunities in energy, Kenya produces just under 1700 megawatts of power and as per our vision 2030 aspirations we need to enhance it upwards to 15, 000 megawatts. I am sure you will be speaking to authorities in the energy sector. However there are big opportunities in the sector in the area of renewable energy resources and I think North America has developed expertise in this area. We have seen General Electric come in and partner with local companies and they are now pursuing opportunities in Wind energy and Geo thermal energy as well. There is a lot of opportunity in agriculture, in value addition and in enhancing productivity. We see opportunities in manufacturing; Kenya is at the gateway of the East African market.

The East African market has a total population of more than 140 million people. That is big market to be tapped and there is a big opportunity for companies in America to come in and take advantage of existing opportunities. We at the Chamber will offer a platform and open doors for them working with organizations such as the Kenya Investment Authority to make sure that they are received well and that they do their business well. One of the key roles of the chamber is arbitration. Dispute resolution is an aspect of importance to foreign investors. Kenya is positioning itself as the arbitration centre for Eastern Africa. The dispute resolution mechanism greatly enhances the environment for businesses.

It is interesting you mentioned General Electric, one of the reasons we selected Kenya was because it is the preferential gateway for Africa with multinationals such as Google, IBM setting up their Regional Operations here. Why do you think Nairobi is an attractive destination as opposed to Johannesburg?

Geographically we are 8 hours away from London, five hours away from Lagos, three hours away from Dubai which makes us well positioned. Secondly Nairobi is very cosmopolitan; we have good social infrastructure, good climate and available manpower. We have had a challenge in so far as security is concerned but we are addressing that. For most expatriates Nairobi is one place that is easy to come to and very difficult to leave.

Given your years and experience in the Kenyan economy what challenges do you see ahead and where do you see the country in ten years?

One of the challenges we face is security, our borders continue to remain porous. The fact that we have neighbors with unstable governments continues to present security challenges to us. The American government has been supporting Kenya by supplementing its security efforts. I see a challenge in realizing opportunities in the emerging Oil and gas Industry. The history of oil and gas in emerging markets has been fraught with bad experiences and I hope that as a country we will embrace global practices and utilize that resource to better the people of this country. A huge challenge going forward is unemployment. We in the private sector as well as the government have a big challenge in reducing unemployment levels; our country produces thousands of graduates every year. In ten years I see this country well on its way of achieving its vision 2030 aspirations of being a middle income economy whose citizens can afford good quality life. I see immense growth taking place in industries and in manufacturing in targeting other African markets. We have all that it takes to have a strong manufacturing base. This country has been a strong producer of manufacturing products and I see this country being at the fore front of commercial activity. Kenya embraced the spirit of free enterprise since it attained independence, which in itself has given us a competitive edge over our neighbors’ since Kenyans are business minded and commercially oriented.

What would be your final message to our readers?

Kenya is a fantastic place. We must acknowledge that there has been a huge information asymmetry between Kenya and the United States. Many people in the United States have insufficient information about Kenya and many people in Kenya have insufficient information about the United States. Through platforms such as yours we can bridge that information gap, we need people to come and experience Kenya as tourists or business men. I would also like to extend a challenge to the American private sector to look at Kenya as a frontier market that will give big rewards into the future.

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