The business of Kenya is...what?

Why do we not venerate corporate titans in Kenya? We respect many of the corporate honchos that invest and thrive in Kenya. The likes of Manu Chandaria have been lionised by even the State, but on the whole, we reserve our adulation for less worthy personages. William Ruto, Uhuru Kenyatta, Raila Odinga, Kalonzo Musyoka and Musalia Mudavadi hog the limelight without actually doing much to advance anything other than the poisonous political air of the country.

Much as we try to emulate a consumerist society as the United States, we do not seem to have business superstars in the mould of Bill Gates, Steve Jobs or the robber-barons that built the US like JP Morgan or Howard Hughes. The United States' business is business and it is time that we realised that the principle role of the State, especially its institutions of governance, is to make it easier for citizen to trade with citizen and the rest of the world. Instead, we elect leaders and enact legislation for the sole purpose of perpetuating political gamesmanship to the almost total exclusion of all else.

When we examine the business climate in Kenya, some corporations demonstrate that it is possible to thrive even in the skewed environment that we have. Safaricom enjoys near monopolistic power in the corporate jungle. Devki Steel Mills, Bamburi Cement, BIDCO and Nakumatt have flourished despite the incessant problems they face when operating in Kenya. If it is not the yo-yoing price of energy, it is the sometimes shabby application of the tax code or the political interference in their operations. CMC Motors has demonstrated that if the laws are applied improperly, even a favoured cow may decline in entrepreneurship and profitability.

The business environment benefits from a stable political playing field; but it benefits more if the institutions tasked with regulating it are well-structured, well-managed and operate under clear laws and regulations. It is not enough to claim that we have a reformist Judiciary; if it sees its roles as simply ensuring that the political gains made over the past ten years are safeguarded and it takes its eye off the corporate disputes that require resolution, we may be in for greater instability in business investment or job creation. The business environment requires that all the partners play within the rules; it also requires that the rules be clear and the enforcers and Judiciary to apply them fairly. It is not the business of the state to pick favourites; that will surely distort the marketplace and lead to lower investment and lower economic growth.

For decades, the business environment was characterised by those that were close to the political power centers and those that were not. CMC Motors, again, comes to mind; it was close to the government for so long it imagined that it could continue to survive for eternity because of that relationship. This prevented it from expanding its market-share to regions outside Kenya. Its stock is trading at an all-time low. It remains unclear how it will fare once the government changes in March 2013. Mixed judgments from the Judiciary are exacerbating the uncertainty. On one hand the courts issue injunctions in favour of one faction or the other. On the other the courts still remain unclear of how to untangle the boardroom mess in CMC Motors. If teh courts do not act swiftly, CMC Motors may end up a basket-case that may never be revived.

The next president must keep his government secure and stable, not for the sae of perpetuating his regime but to ensure that the business environment is as free of friction as possible. Investors should not be compelled to run from pillar to post in search of one permit or another; instead, they should be facilitated to get their projects off the ground in the shortest period possible. Indeed, if Kenya can rise up the rankings on ease-of-doing-business surveys, it may go a long way on persuading investors that it is not only politically stable, but that it welcomes all forms of investment. If it continues to languish in the bottom half of those surveys, Kenya will not attain middle-income status, not in 2030 or ever.