Restore investor confidence, Mombasa traders urge Nassir

The Mombasa business community has urged Governor-elect Abdulswamad Nassir to run a transparent government that will restore investor confidence.

The traders, under the membership of the Kenya National Chambers of Commerce and Industry, also want the new administration to ensure land owners in Mombasa are protected.

They also seek to be facilitated to develop their properties in a clean city and the pending bills debacle addressed.

KNCCI Mombasa chairman Mustafa Ramadhan in a four-page document said Mombasa has always had a diverse economy based on trade and commerce, tourism and manufacturing.

However, none of these sectors is as prosperous because they have been affected by regional and intra-national instability and conflict, external shocks and poor management of national resources.

"Mombasa should be a prosperous city, offering plentiful economic opportunities to its population.

"In practice, however, Mombasa has not yet realised its potential; services and infrastructure are increasingly inadequate and about a quarter of its households fall below an absolute poverty line," Ramadhan said.

He said the coastal town of Mombasa used to have a well-established industrial sector, consisting of large and small-scale manufacturing enterprises engaged in agro-processing, oil refining, cement production, textiles and apparel.

The decline in global tourism numbers has also adversely affected the economy of the region.

Ramadhan said despite all these negative economic shocks, there are investors who are still very willing to invest in Mombasa.

However, this has been restricted by severe water shortages, frequent power blackouts, shortage of serviced industrial land, high levels of insecurity and an unpredictable tax regime.

“To attract more investors, the new administration should first position and package Mombasa as a pivotal investment vehicle to spur industrial growth, create more jobs, empower businesses and net investors,” Ramadhan said.

Mombasa is grappling with pending bills in excess of Sh4.29 billion.

Ramadhan said pending bills arise when a government entity fails to settle invoiced amounts for goods and services properly procured, or rendered. 

These bills include payments to contractors, suppliers, statutory deductions and pension arrears.

The chairman said the outstanding bills erode investors’ confidence and delayed payments cause constraints to entities doing business with the government.

Therefore, counties lose reliable suppliers and contractors.

“As you assume office, the business community expects that you audit the payment of the Sh4.29 billion in pending bills owed by the county," Ramadhan said.

He challenged the new administration to run a transparent and reliable revenue collection system that will contribute to the realisation of economic development.  

"Mombasa county faces challenges concerning revenue mobilisation and the link to business activities, among them evasion of payment of taxes, permits, licenses and levies.

"These practices result in the reduction of the resources available for investment in essential social services, foster inequalities, undermine economic and social institutions and even discourage transparency in matters of public finances," Ramadhan said.

Last Friday, KNCCI met with Nassir during dinner at a hotel in Mombasa and shared with him some of the challenges that affect revenue transparency and contribute to noncompliance by most businesses.

They identified corruption in the process of revenue collection and the management of public revenue and lack of disclosure of contracts, particularly those that have significant economic and social consequences.

They also cited lack of transparency in the administration and management of revenues from the collected taxes, levies and licensing activities.

"Our expectation is that the incoming governor will run a transparent government that will restore the confidence of the business community in paying their fair share of taxes and levies,” Ramadhan said.

The KNCCI said the garbage menace in Mombasa has also contributed to the decline in investment in the region.

They said Article 42 of the Constitution of Kenya codifies the right to a clean and healthy environment.

"The Mombasa business community expects a clean county where they can enjoy living and doing business.

"The solid waste management problem that has been dogging the county for years requires a new and holistic approach,” Ramadhan said.

Nassir who was present during the dinner said they have put strategies in place to ensure the garbage problem in Mombasa is resolved within the first 100 days in office.

“We are going to float an international tender on the issue of solid waste management. We are committed to ensuring that the garbage problem is dealt with within the first three months after we assume office,” he said.

Nassir further said he has already started receiving reports on all the pending debts, which will first need to be audited before they are paid.

He also promised to collapse various trade licenses into one.

“I have already asked my county team to go through the fees and come up with a one-stop figure, which means you only pay for one license.

"Instead of one business paying for health, fire and other county charges, these will all be included in one permit,” Nassir said.

The governor-elect said he will also set up a business directorate in the Office of the Governor, whose job will be to ensure ease of doing business.

The directorate, he said, shall be reporting directly to him giving him weekly reports.

“We have begun discussions around having a single permit. This means going forward, you will not necessarily have to pay something different for trade license, health, or for fire safety compliance,” he said.

Nassir also promised to have quarterly engagements with the business community.

(Edited by Bilha Makokha)