Written by Geoffrey Irungu, Business Daily, March 25, 2009
Kenya will in the next five years invest Sh360 billion in economic and constitutional reforms to ease the cost of doing business.
President Kibaki told an economic forum —Euromoney conference — in Nairobi that the government was keen on attracting local and foreign investors, noting that Kenya had recently been ranked as among the Top-10 reformers in doing business in the world.
Euromoney, which publishes a monthly magazine by the same name, regularly organises talks for cross-border investment and financial market players to exchange ideas.
Kenya has started working on numerous changes, including elimination of certain tariffs in partnership with other countries in the eastern African region, said President Kibaki.
The country had also launched a private sector competitiveness strategy.
On the regional front, he said, an economic partnership agreement was expected to be concluded by July this year, which would allow duty-free access to European markets, except for rice and sugar that would be liberalised gradually.
Prime Minister Raila Odinga said Kenya faced challenges of coping with the impact of the global financial crisis because of drought and famine, reducing remittances, and was not a beneficiary of the Highly Indebted Poor Countries (HIPC) facility that allowed debt write-off.
Mr Odinga pointed out that even oil-producing Nigeria had benefited under HIPC yet it was richer than Kenya.
While emphasising that protectionism would not help economies recover, he said an open trade policy should not be used as an excuse to dump cheap goods such as textiles, toys, and batteries.
Local manufacturers have, for long, complained that imported but cheap, sometimes low-quality, goods have found their way into Kenya driving out local business, thus aggravating levels of poverty and increasing unemployment.
This is more so in situations where the relevant customs duty is not paid. An anti-counterfeit law has been put in place but no one has so far been charged.
On corruption, the PM said that 12 State corporations have been investigated by the Efficiency Monitoring Unit and the Inspectorate of State Corporations in recent years, leading to removal of six heads of the parastatals from office.
“The President and the prime minister are not involved in graft at all,” said Mr Odinga.
He said there was progress towards reviewing the inflation figures as they exaggerated the food category, which was a major contributor to compilation of inflation figures.
The inflation target is single-digit from the current double digit figures, nearing 30 per cent. Progress towards the introduction of smart cards for the poor was also being made as a way to enable them access subsidised food.
Earlier there was a light moment when the editor of Euromoney, Christopher Garnett, took over the role of master of ceremonies from Mr Wycliffe Oparanya, the minister for Planning and Vision 2030.
Mr Garnett invited President Kibaki to address the audience at the Laico Regency against what was provided for in the official programme, which specified that he was to be invited to speak by the prime minister.
Mr Oparanya was scheduled to first to invite Mr Odinga who would in turn invite the president to speak.
“Ladies and gentlemen, I am wondering what mischief is happening around here,” said President Kibaki amidst the confusion and some murmurs that followed.