On 19^th March 2023, KEPSA met with the International Finance Corporation (IFC) delegation led by Ms. Amena Arif, Country Manager for the Kenya Cluster, accompanied by Mr. Dan Kasirye and Ms. Sarah Ochieng. The KEPSA team was led by the CEO Ms Carole Kariuki, and the Vice-Chair Ms Brenda Mbathi. The primary focus was to deliberate on the diminishing competitiveness within Kenya and to address the resultant challenges and opportunities for the private sector. The meeting was attended by Mr. Ken Luusa - KEPSA Director, Lands & Infrastructure, Mr. Agayo Ogambi – Ag. CEO, Shippers Council of Eastern Africa, Ms. Rose Mwaura – KEPSA Public Finance Sector Board Chair, and Ms. Susan Maingi – KEPSA Trade, Investments and Industry Sector Board Chair.

The KEPSA CEO expressed enthusiasm about collaborating with IFC and extended an invitation to participate in the ongoing discourse concerning competitive issues faced by businesses. She emphasised KEPSA’s commitment to enhancing competitiveness through five key drivers: cost of raw materials, utilities, labour productivity, logistics, and finance.

The meeting acknowledged that increased taxation and a lack of comprehensive understanding of the economic development agenda, particularly during political transitions, posed significant obstacles for businesses.

Ms. Arif underscored the potential benefits of Public-Private Partnerships (PPPs) and outlined the challenges encountered by development partners in engaging with PPP projects. She advocated for the PPP model as a strategic approach for the government to achieve fiscal prudence, suggesting that it could be prioritized for financing development projects, thereby reserving limited resources for the provision of social goods.

The meeting identified several specific issues that constitute red tape for businesses:

• Policy inconsistency and a deficit in monitoring and evaluation.
• Escalated transportation costs due to Non-Tariff Barriers and inefficiencies along the Northern Corridor.
• Ambiguity surrounding revenue collection measures by county governments.
• The high cost of employment coupled with low labour productivity.

In conclusion, KEPSA and the IFC agreed to collaborate on the following initiatives:

• Revamping the Public-Private Dialogue framework to incorporate accountability and responsibility, thereby facilitating the removal of business red tape.

• Engage the policymakers to ensure we move away from the effects of the diminishing returns of the increased tax and work towards the proposals of implementing tax changes of the Finance Act in January of the year that follows to offer predictability in the business environment.
• Implementation of the parastatal reforms report towards privatization of state corporations.
• Continuous exchange of information towards private sector growth and economic development.