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Presentation of report findings
Nairobi – June 26, 2012
Mierta Capaul
Program Manager
Global Indicators and Analysis Department
World Bank
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What does Doing Business measure?
Doing Business indicators:

Focus on regulations relevant to the life
cycle of a small to medium-sized domestic
business.


Are built on standardized case scenarios.

Are focused on the formal sector.
Are measured for the most populous city
in each country.
DO NOT measure all aspects of the business environment such as:
macroeconomic stability, corruption, level of labor skills, proximity to
markets, or regulation specific to foreign investment or financial
markets.
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Doing Business indicators – 11 areas of business
regulation (10 included in the ranking)
Start-up
 Starting a
business
Minimum capital
requirement,
procedures, time
and cost
Expansion
Operations
 Registering property
 Dealing with
construction permits
Procedures, time and cost
Procedures, time and
cost
 Getting credit
Credit information
systems
 Paying taxes
Payments, time and Total
Tax Rate
Movable collateral laws
 Protecting investors
Insolvency
 Resolving
insolvency
(formerly
Closing a
business)
Time, cost and
recovery rate
 Trading across
Disclosure and liability in
related party
transactions
borders
Documents, time and
cost
 Enforcing contracts
 Getting electricity
Procedures, time and cost
to resolve a commercial
dispute
Procedures, time and
cost
 Employing workers
(annex)
Entry
4
Property rights
Investor protection
Access to credit
Administrative burden
Flexibility in hiring
4
Recovery rate
Reallocation of
assets
Subnational Doing Business:
How does Kenya benefit from it?
• Goes beyond largest city to create baseline and capture local
difference in regulations
• Gives specific locations an opportunity to tell their story
• Pinpoints bottlenecks and provides good practice examples
1
Diagnostic
Tool
2
Reform
Instrument
3
M&E
Device
• Measures progress over time through
repeated benchmarking
• Creates an incentive to maintain the
reform effort even when governments
change
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• Allows locations to compete locally
and globally
• Promotes peer to peer learning
• Initiates a reform process by
engaging local governments and
reforms stakeholders
Doing Business in Kenya in 2012, second in the
subnational series, benchmarks 13 locations
Doing Business in Kenya 2010
• Created micro-level data for 10 cities in
addition to Nairobi: Eldoret, Garissa, Isiolo,
Kilifi, Kisumu, Malaba, Mombasa, Narok,
Nyeri, and Thika
Doing Business in Kenya 2012
• Adds 2 new cities (Kakamega and Nakuru)
• Updates benchmarks for cities previously
measured
• Tracks business reforms in all cities
• Data is current as of March 2012
Both reports cover 4 indicators
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1.
Starting a business
2.
Dealing with construction permits
3.
Registering property
4.
Enforcing contracts
What are the key findings?
 Overall, it is easier to start a business, deal with
construction permits, register property and enforce a
contract in Malaba, Narok and Thika.
 Business reforms implemented over the past three
years have made it easier for local entrepreneurs to
start and operate a business throughout Kenya.
 Challenges remain – overall starting a business is
burdensome and construction permitting is more
expensive due to costly environmental expert
assessments.
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No single city outperforms
the others in more than one area
Malaba
Narok
Thika
Garissa
Eldoret
Mombasa
Isiolo
Kisumu
Kilifi
Nyeri
1
2
3
4
5
6
7
8
9
10
Ease of
starting a
business
6
8
1
12
10
9
2
13
3
10
Kakamega
Nakuru
Nairobi
11
12
13
6
4
5
City
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Aggregate
rank
Ease of dealing
Ease of
Ease of
with construction registering enforcing
permits
property contracts
1
4
3
5
5
2
3
7
7
3
8
1
2
7
5
7
1
8
4
13
4
10
2
9
11
11
6
10
6
10
9
13
11
9
6
12
12
11
13
It is easier to do business in all
13 cities now than 3 years ago
City
Starting a
business
Business reforms National
Mombasa
Eldoret
Isiolo
Garissa
Kakamega
Kilifi
Malaba
Nakuru
Narok
Thika
Kisumu
Nairobi
Nyeri













Local










Dealing with
construction
permits
National Local
x
x
x
x
x
x
x
x
x
x
x
x
x
Registering
property
National


Doing Business reforms making it easier do to business
Doing Business reforms making it more difficult to do business
9
Local

Enforcing
contracts
National
Local














Business entry reforms resulted in time and cost
savings for local entrepreneurs
81.2
DB Kenya 2010 average
67
48.4
DB Kenya 2012 average
45
Sub-Saharan average 2012
37
43.4
12
10
8
Procedures (number)
10
Time (days)
Cost (% of income per capita)
Time differences to start a business across
locations reveal potential for future improvement
DB Kenya 2012
average (45 days)
11
DB Kenya 2010
average (67 days)
Obtaining building plan approvals is 4 times
faster in Malaba than in Nakuru
Building plans approval
Malaba
14
Garissa
15
Isiolo
15
Narok
33
Eldoret
34
Nyeri
23
Kilifi
24
Mombasa
30
Kisumu
30
Kakamega
During and after construction
Connection to utilities
42
Nairobi
40
Thika
45
Nakuru
55
0
12
Environmental approval
25
50
75
100
125
Time (days)
Mombasa overhauled its construction
permitting process
13
Variations in time to register property point
to opportunities for local improvements
Mombasa
Malaba
32
Eldoret
44
Kisumu
45
Narok
Nyeri
Kenyan average
Thika
53
56
61
63
Nakuru
71
Kakamega
71
Nairobi
Kilifi
Garissa
Isiolo
14
28
73
76
86
93
Isiolo remains the only city charging a local
property transfer tax
Isiolo reduced the cost to
register property
25
24.1 %
• Isiolo cut the local transfer tax by
15 percentage points (from 20% to
5%) reducing overall costs by 62%
20
15
10
5
9.1%
• But Isiolo remains the only city
charging a local property transfer
tax, in addition to the nationally
mandated stamp duty of 4%
0
Cost (% of property value)
15
15
Enforcing a contract in Kenya is easier than
in the average Sub-Saharan Africa city
16
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A city adopting all Kenyan best practices would rank 14
places higher than Kenya’s* current rank in Doing Business
Doing Business indicator
Starting a business
Dealing with
construction permits
Registering property
Enforcing contracts
Best practices within Kenya
10 procedures
All cities
32 days
Nairobi
39.3% of income per capita
Narok
9 procedures
Kisumu, Malaba,
Mombasa, Nairobi, Thika
64 days
Garissa, Malaba
133.7% of income per capita
Malaba
9 procedures
All cities
28 days
Mombasa
4.1% of property value
Thika
40 procedures
Mombasa, Nairobi
351 days
Garissa, Narok
38.4% of claim value
Isiolo
Ease of doing business
* Represented by Nairobi.
Source: Doing Business database
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“Kenyana”
(global rank)
Kenya in Doing
Business 2012*
(global rank)
123
132
23
37
103
133
92
127
95
109
Good business regulations and governance
In countries where business regulation is efficient and information on
documentation requirements and fee schedules is easily accessible, the
perception of corruption is lower
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Kenya Investment Climate Program (KICP):
2008-2012
 Active since 2007:
•
In 2007 the WBG Investment Climate Advisory Services responded to a
GoK request to support reform of the country’s investment climate
 Components of KICP:
• Regulatory reform: Licensing Reform, Regulatory Reform Strategy, Eregistry and automation, Inspection and Enforcement Reform, Regulatory
Impact Analysis, Doing Business, Subnational Doing Business and
PPD
• Investment generation
• Trade logistics
 Achievements of KICP:
• Kenya named a top reformer in Doing Business 2008
• Business licensing reforms with 60% licenses either abolished or
streamlined leading to private sector cost savings
• e-Registry
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THANK YOU
www.doingbusiness.org/Kenya