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September 23, 2018

Taking A Break From Kenya’s Potholes

Maybe I’m just easily impressed these days. As I fell out of the plane in Mauritius dazed and confused and grumpy in an undercaffeinated sort of way, the first thing I noticed were the really nice roads.

Dual carriage way, too, for the main road. Nice, nice. I was a bit dazed and confused because I had several hours of a layover in Dubai and both legs of the journey had included screaming and wailing small humans (When the plane approached Dubai, I also noticed long, straight and, even more exciting, lit roads in what I assume was the desert. A super highway even? I will investigate.)

So Mauritius. Lovely roads, but then again, only 90km top to bottom, so that’s maybe not such an engineering feat. I had been invited to a conference on ICT/BPO outsourcing and Mauritius positioning itself as the ‘gateway’ to Africa.

The island state does have a very attractive tax regime with its 15 per cent corporate tax, so that’s been a draw – and one that the government clearly hopes to exploit for the BPO/outsourcing industry: set up your company there, and then tackle the continent.

There are other attractive features besides the low tax regime: Mauritius is very clear about its priorities in attracting investors and has been ranked 19th in the World Bank’s global Doing Business 213 survey, and the first in sub Saharan Africa.

For all its tininess, swimming somewhere in the middle of the Indian Ocean, the island has been able to transform itself from an economy depending on a single commodity, sugar, to diversify into textile production and then into off-shore financial services, and not necessarily of the shady money-laundering kind.

So lots of interesting achievements, even if you consider that the island state is tiny, and had a lot of support through its Indian connections. And they even have a cyber city: not a field with rocks, Konza style, but an area with actual office towers and outsourcing firms working away.

I’m sure that if I had hung out in Mauritius a bit longer, and outside the (well managed) conference, I’d have found residents who would have told me more about the not-so-functional sides of the island – those exist everywhere.

But talking about the investment environment, I was reminded of just two recent Kenya episodes: My friend Ritesh took a big leap sometime last year, quit corporate employment, and acquired the franchise to set up Naked Pizza in Kenya. Ritesh is a thorough and diligent man and followed all the existing regulations for business and food business in detail.

Which doesn’t seem to have helped at all: In less than five weeks, he had more than seven visits by City Council askaris, once even accompanied by armed police men (pizza business presumably being of the more dangerous sort?), every single time with bogus complaints:

Ritesh has health certificates for all his staff, doesn’t pump waste water on the road, etc. His company is compliant, extra compliant, in every single issue. The only non-compliance was the City Council askaris entering the premises with dirty shoes and clothes.

And my friend Tamara Britten wrote Karibu Kenya, an incredibly detailed accommodation guide for Kenya, with all properties, from tiny guest shacks to five-star facilities, included. For Kenya’s tourism, such a large part of the economy, that can only be a good thing.

But the freshly printed copies of ‘Karibu Kenya’ ended up spending a few months in storage at Mombasa port because Tamara was engaged in a lengthy debate with the Kenya Revenue Authority whether her book was actually, believe it or not, a book – books can be imported duty free, non-books can’t.

By the time she had convinced them that the book-looking thing with pages can, in fact, be classified as a book, she didn’t have to pay import duty, but was still stuck with the bill for storage costs. Way to go.

I’m really pleased that new Nairobi governor Evans Kidero recently made the point that City Council askaris are not, in fact, there to make everyone’s life as miserable as possible, but are there to serve the public (strange notion, I know).

And Ritesh also said that he just had a visit by the City Council’s internal investigations department that is charged with investigating internal corruption, and they were courteous and professional, according to him.

But: being treated professionally shouldn’t depend on whether you have access to Kidero’s office and various other important people. In principle, Kenya has got everything, absolutely everything going for it, but such governance issues will keep tripping up new and more investment.

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