IAfrica News Kenya Focus 

April 19 - 25, 2013


 Coastweek   Kenya

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Regional private sector urged
to prioritize business agenda

the Port of Mombasa does not meet international
standards and requires urgent attention


NAIROBI (Xinhua) -- Kenya’s private sector on Thursday called on the government to stay on a path of growth, solidify its position as regional economic hub and enhance its competitiveness regionally and globally.

The Kenya Private Sector Alliance (KEPSA) vice chairman in charge of transport Edwins Mukabanah said Kenya is not reaping the fruits of its strategic location in East Africa owing to the overwhelming excessive demand pressures that increased integration in the regional and global economy has brought about.

“As one of the fastest growing regions globally, East Africa needs a well-functioning transport infrastructure that integrates different modes of transport that balance each other in terms of traffic flow,” Mukabanah told private sectors members during their annual meeting in Nairobi.

“Unfortunately, the Northern Corridor suffers from major infrastructure bottlenecks and a lack of integrated transport networks that if not well addressed will see Kenyan goods becoming highly uncompetitive,” Mukabanah said.

He said the Port of Mombasa does not meet international standards and requires urgent attention, adding that addressing the challenges is a pre-condition for growth in trade and investments which can be achieved by investing in new infrastructure increasing efficiency of transport and tackling Non- Tariff Barriers.

Mukabanah said by regulating the industry through the implementation of necessary transport reforms that will remove inefficiencies, foster a competitive market and build the foundation for a modern public road transport system, Kenya will drastically improve the business environment through reduced transport costs and increased investments, in addition to creating jobs.

The Northern Corridor is the busiest corridor in East and Central Africa, as over 200 million people depend on economic activities along the Corridor, with traffic exceeding 2 million tonnes annually, with a yearly growth rate of 20 percent.

However, freight traffic does not move freely as transport costs account for a high 30 percent of the value of goods within the Corridor.

Poor infrastructure and Non-Tariff Barriers in the form of cumbersome customs procedures, long waiting times (at 7 weighbridges and 24 police roadblocks) that entice bribery are the main causes of transport costs.

The vice-chairman of energy sector Julius Riungu warned that if the sector does not adequately scale up and diversify into new sources of energy, future energy needs of an increasing number of households and a growing private sector will not be satisfied.

“Also, these needs may compete with each other and in the process putting more upward pressure on energy prices and not guaranteeing the provision of least cost power. This will have detrimental effects on the competitiveness of Kenyan businesses.”

Riungu said in order to reduce energy costs to below one U.S. pence per kilowatt hour and thus make the country remain competitive, it would require reducing the dependency on thermal and emergency power, investing in petroleum production capacity and supply infrastructure, and increasing the utilization of renewable energy.

The main sources of electricity in Kenya are hydro, thermal and geothermal power.   

After major droughts, hydro increased in importance in the last year, now accounting for more than half of power generation. However, hydropower is a vulnerable power source as droughts are expected to occur more frequently.  

KEPSA observed that a safe and secure environment in Kenya will reduce the financial impact of crime for businesses, improve the investment climate and open opportunities for increased economic activity in a 24-hour economy.

“Regulation of the private security industry is highly important to improve service delivery in line with agreed standards and promote security for an improved business climate,” said Sam Matano, vice-chairman of Security sector.

“The private industry wants to assist in ensuring the perception of the public sector and private sector’s safety and security organizations acting as one agency when addressing Kenya’s safety, security and crisis management concerns.”

This perception, he said, should be one of proactive, well trained and well prepared groups to handle any crisis.

“A safe and secure environment fosters good governance, social welfare and economic development, but requires peace and elimination of conflict,” he said.


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