PROJECTION

Kenya's ease of doing business to drop to 58–Trading Economics

Ranking improved to 56 from 61 in the last edition

In Summary

•World Bank to release annual data in a week's time.

•The drop is pegged on a number of factors including shrinking manufacturing index, high-cost electricity, high corruption and high tax regime.

Deputy President William Ruto receives the 2020 Ease of Doing Business report from the World Bank.
Deputy President William Ruto receives the 2020 Ease of Doing Business report from the World Bank.
Image: DPPS

Kenya’s ease of doing business is likely to drop two steps to 58 in the World Bank data to be issued next week, Trading Economics has said.

The drop is pegged on a number of factors including shrinking manufacturing index, high-cost electricity, high corruption and high tax regime.

According to the firm’s econometric models, in the long- term, the Ease of Doing Business in Kenya is projected to trend around 60 in 2021 and 80 in 2022.

Kenya recorded an improved doing business index in 2020, ranking position 56 compared to 61 the previous year.

This was attributed to the automation of systems that made starting a business in Kenya easy.

The ease of doing business looks at among others; starting a business in a country, registering property, dealing with construction permits, getting electricity, getting credit, paying taxes and protecting minority investors.

Others are trading across borders, resolving insolvency and the level of enforcing contracts.

In the upcoming edition, World Bank is considering a government contracting  indicator set in the calculation of the ease of doing business ranking.

This will measure the procedures and time to win a public procurement contract.

As part of a five-year cycle established in Doing Business 2015, the 2021 edition will update the metrics of the best and worst regulatory performance used in the calculation of the scores for the various Doing Business indicator sets as well as the data on gross national income per capita.

Others are the export and import products used as a reference for each economy in the trading across borders indicator set.

''This update will allow the Doing Business data to more accurately reflect the best regulatory practices achieved by top-performing economies in the last five years—these practices will set the new standard for other economies to pursue,’’ World Bank said.

Doing Business is also considering expanding the coverage of the study to include the second-largest business city for economies with a population of more than 100 million (as of 2019), and the third- and fourth-largest business cities for economies with a population of more than 300 million.