BizCLIR

For more than a year following its troubled 2007 presidential election and its February 2008 formation of a coalition government, political stresses in Kenya have persisted, placing its economy in unenviable circumstances. The country is constrained by outdated laws and chaotic, dysfunctional courts, hampered by deficient infrastructure and bureaucratic systems that undermine small business and the agriculture sector disproportionately, and beholden to virtually unchecked corruption. Kenya’s endowment of geography, beauty, bounty, and a capable populace has been neglected by those who, in relatively short order, could transform it into abundant opportunities for all Kenyans, including the 21 million who live on less than $2 per day.[1] In the immediate future, the strongest hope for meaningful reform lies with Kenya’s private and nongovernmental actors. Without the continued persistence of individual businesses and business associations, NGOs, lawyers, academics, the media, and others, the way forward will continue to be obstructed by politics.

 

As of spring 2009, the private sector faces a unique opportunity to lead, one that builds on its post-election role in driving the country away from the precipice of civil war. At least in part, the private sector has the capacity to help fill gaps left by lawmakers in a variety of ways. The private sector could help new businesses navigate tangled regulatory conditions, access finance, and get training in much-needed skills. It could insist on continued law and court reform. And it could mount a collective, committed resistance to corruption. For those courageous politicians and government officials who are willing to step away from the country’s festering system of spoils, there are also manifold opportunities to lead. As the table on this page illustrates, East African countries need not be victims of the global recession if, like Tanzania, they persist in their pro-growth economic reform efforts and attacks on official corruption.[2] Even where, as in Kenya, government “corruption and mismanagement is rife,”[3] enormous opportunities await those who responsibly and creatively grasp for them.

 

Fortunately, Kenya has not fallen entirely behind in its goal to become a middle-income country over the next generation, a target set forth in its 2007 blueprint for development, entitled Vision 2030. In recent years, some reforms that support future economic development have taken place. These include a strengthened system of tax collection, a number of administrative fixes in international trade, considerably improved access to finance, and some streamlining of business licensing and regulation. It is also widely agreed that the city of Nairobi is a cleaner, safer, and more attractive destination – both for tourists and investors – than it was just a few years ago. Moreover, a public-private initiative to bring an undersea system of fiber-optic cables to East Africa promises to enable the creation of many technology-oriented jobs and businesses, if not in 2009, then likely next year.[4]

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