The Star (Kenya)

Even when you have the nec­es­sary per­mits, they will find some­thing they can use to ex­tract money. It’s very frus­trat­ing

- PETER MWAIRONGO Business

A visit by a group of well-dressed per­sons claim­ing to be from the Kenya Rev­enue Author­ity is enough to send any­body into a state of panic. The in­di­vid­u­als in­evitably re­sort to de­mand­ing money af­ter threat­en­ing their vic­tims with ar­rest. State agen­cies now have SMS short­codes through which the pub­lic can ver­ify the iden­tity of en­force­ment of­fi­cers, but the vice con­tin­ues.

Speak­ing of bribes, cor­rup­tion in the pub­lic trans­port busi­ness is the best ex­am­ple of the con­se­quences of grant­ing en­force­ment au­thor­i­ties dis­cre­tionary pow­ers of ar­rest. The wide-rang­ing pow­ers gov­ern­ment agen­cies have over busi­ness leave no room for ap­peal. Pub­lic trans­port op­er­a­tors know from ex­pe­ri­ence that go­ing to court would be a waste of time, hence the ten­dency to ne­go­ti­ate on the road­sides. An­other dis­ad­van­tage of dis­cre­tionary pow­ers is it cre­ates an un­even play­ing field be­cause busi­ness own­ers who bribe gain favours while those that can­not bribe get vic­timised.

Apart from the day-to-day in­ter­ac­tion with of­fi­cial­dom, busi­ness has to con­tend with abrupt changes in na­tional pol­icy that ad­versely af­fect op­er­a­tions. Re­cent changes in pol­icy that put busi­ness in trou­ble in­clude the 2018 crack­down on im­ported goods, the 2017 ban on plas­tic bags, the shift in trans­port of im­ported cargo from road to rail­way, the 2019 crack­down on sports bet­ting, and the re­cent ban on im­ported used clothes as part of Covid-19 con­trol mea­sures. Those changes cre­ated up­heaval in busi­nesses, re­sult­ing in huge losses, clo­sures and an in­crease in un­em­ploy­ment.

In its ‘Ease of Do­ing Busi­ness Re­port’, the World Bank says in­ef­fi­cient reg­u­la­tions can ham­per the growth of busi­ness.

“Economies that score well on the Do­ing Busi­ness in­di­ca­tors ben­e­fit from a higher level of en­trepreneur­ial ac­tiv­ity. This in turn gen­er­ates bet­ter em­ploy­ment, greater gov­ern­ment rev­enue and higher in­comes,” notes the World Bank.

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