Saturday, September 21, 2013

Business at the grassroots is the key.

Taking a hard look at the Fourth Schedule of the Constitution, after a hiatus of three years, is an eye-opener. If the intention of the Committee of Experts was to convert devolution into glorified local government, they succeeded beyond their wildest dreams. It is why when one hears of the Big Plans Kenya's forty-seven governors have made one is struck with their chutzpah, their moxie, their balls. The governors' interpretation of the Constitution that they are akin to the president, but at "grassroots" level should be dispelled with quickly, before they do irreparable harm to devolution.

One of the principle reasons why devolution s popular with Kenyans was the inequity in the distribution of national resources. For example, official neglect of the North Eastern Province, parts of the Coast Province and the northern reaches of Eastern Province were demonstrated by the low allocation of development funds by the erstwhile central government. The only relationship that seemed to matter to Nairobi seemed to be the one that treated the residents of these regions as security threats to be manged. This was acutely experienced by these people whenever they applied for national documents of identity, such as the national identity cards every adult is required to carry. Before they were issued with one, a district security committee had to confirm that they were Kenyans, even after they submitted copies of their parents' IDs and birth certificates. This system still prevails today in the shadow of the devolved government and by all means seems to be a permanent situation.

The dream of devolved government survived the attentions of the Tenth Parliament, but only in a bastardised form. While many governors think that what they have is a federated style of government, the truth of the matter is that what they head are little more than glorified local authorities. If they were to take this in good stride, they could go far ion affecting the course of government, even in Nairobi. If they, and their senators in Nairobi, insist in pushing the national government, especially the National Assembly, to grant them more powers and more responsibilities, they may miss the opportunities to positively affect the lives of Kenyans at the grassroots and this is an opportunity they may never get again.

In Nairobi and Mombasa, for example, the biggest challenges revolve around income-generating activities, especially petty vending and small-scale retailing. The majority of residents in the Capital and in Kenya's gateway make their living from either the "informal sector" or peddling wares door-to-door, in markets or as "hawkers" in the central business districts. What they require are systems that guarantee that they are able to earn a decent living, earn a decent profit, and suffer few regulatory penalties. The situation that prevails today makes all small-scale vendors and hawkers petty offenders attracting the attention of over-zealous municipal inspectorates, such as the City Council askaris, and their batons.

While many governors have led their counties in drafting legislation that would expand investment and investment opportunities for "major" investors, they have ignored the small and medium enterprises sector that accounts for a large part of the employment and economic opportunities in their counties. It is time they swiftly turned their attention to this vital sector. They must begin by reviewing the extant by laws; these have been the bane of the SME sector for decades. The aim should be to simplify the process of applying for and obtaining permits. The Single Business Permit regime must be reformed to account for the increased numbers of vendors, and the decreased slots in authorised markets and shopping centres.

Secondly, county governments must invest more in expanding legitimate locations for the carrying out of legitimate business activities. Markets and shopping centres must be modernised and expanded in size to attract more vendors and sellers. If the costs of operations for SMEs can be kept low, and the incentives for investing in the SME secotr made more attractive, one of the pernicious problems of the SME sector (unlicensed hawking) may be eliminated. It will take a concerted and sustained effort by county executives. But given their nascent proclivity towards white-elephant investment, it might be a while before governors see the light in the small sector than in the big ticket investments of foreigners and established conglomerates.


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