Kenya National Chamber of Commerce and Industry: Kenyans & Business

Interview with James Mureu, Chairman of the National Economic Diplomacy Committee, KNCCI (Kenya National Chamber of Commerce and Industry)

What makes the Kenya National Chamber of Commerce and Industry different compared to others?

The Chamber movement is about 400 years old. In that time, it has spread through 177 countries across the world. It’s a network of business groupings that are involved in advocacy issues and management of business related problems. It enables the businessmen and women to network both inside and outside of the country. Recently, we introduced another interesting arm of the Chamber. For the longest time, disputes between companies ended up in courts and the court processes took a long time. So, we have introduced a new center for arbitration within the Chamber network. If two companies have issues, they are able to come before an arbitration setup in the Chamber and instead of spending money with lawsuits and long, laborious processes within the court system, they are able to sort out their problems quite quickly. That is the way business should be. We are not interested in spending long hours in court processes. If you and I have a dispute, we are able to see it before a dispute resolution committee and we agree that you owe me $20,000 that you will pay me in ten installments or five installments, it’s much better than going to pay a lawyer and going through a long process. We also engage the government a lot in terms of advocating for an enabled business atmosphere. If there are legislations that need to be put in place to make doing business easier and better, that’s part of our role. Obviously, when the new Jubilee Government came into power, they showed a lot of interest and revamped the private sector. And the Kenyan National Chamber of Commerce, under the Chairmanship of Mr. Kiprono Kittony and Mr. Laban Onditi as the Vice Chair, have actually been given a very prominent role to play insofar as this current government is concerned. Under the international trade, we have been accompanying the President in all the international visits that he has made across the world. In doing that, we have been able to open up a lot of potential for this country, which is a very significant and important role that the Chamber of Commerce plays in terms of carrying out their mandate.

What is your appraisal of the economic situation in the country?

The Chamber movement is about 400 years old. In that time, it has spread through 177 countries across the world.

If you look at IT from a micro sense, it looks like we’re doing badly in terms of the small, isolated cases. We’ve had attacks from Al Shabaab, which causes insecurity. That insecurity then scares the capital of those who are cowards. Capital is a coward. In the macro scale we are growing in leaps and bounds. Although our growth is pegged at 5.7, in reality, if you remove the sectors that are not doing very well, like tourism which has been affected by all these travel advisories, we’re actually growing by about 8.5-9%. This is very, very good. Our government targeted a double digit growth by next year and it is definitely achievable. Outside of that, we are doing reasonably well overall. Currently we are heading for an election. The Americans are going through this as well. We have started a bit early, but we are hoping that we will be able to overcome all these little hiccups and come through. In our last election in 2013, we had a smooth transition from the previous regime to the current regime. Kenyans are knowledgeable enough and careful enough not to want to bring problems. We’ve looked at all our neighbours who have had issues. We’ve actually had to host a lot of refugees arising from turmoil within our neighbouring countries. The Kenyan population is really careful not to rock the boat. We’ve had challenges like any other country but they are not insurmountable.

What is the major challenge for businesses?

The world out there does not understand what goes on in this country. And for the longest time, the challenge to the international media has been that they have not had the chance to be here in Kenya and talk to Kenyans first-hand. For example, when the President of the United States visited us last year, there were reports that Kenya is a bedrock of kills. When he came here, he was pleasantly surprised. The media out there does not report what actually happens on the ground. For the longest time, people have just told stories about partisans and Kenya which don’t reflect very well. That has scared investors for us. I’d much rather the truth be told about where we have had problems. Which nation has not been attacked in the world, including America with the Boston bombing and the Twin Towers bombing? The terrorists won’t want to come through the door in a decent way. They don’t knock on the door. They drop a bomb through the roof or they dig a tunnel and blow you up. That is what terrorists are all about. So, Kenya is not special. It shocks me and really upsets us sometimes as a country. For example, when the American embassy was bombed, that was not aimed at Kenyans, but we paid the full price for it. Two hundred ninety eight Kenyans lost their lives. On top of that, we were slapped with travel advisories at a time when we expected the international community to show leadership and support. We had been hit by a world terrorist group which causes more terror, bigger terror than being shot and killed by a terrorist because this is a long painful process. If you slap us with travel advisories, you are actually slapping the person right at the bottom of the scale. Because if tourists don’t come, the old lady who grows vegetables and sells them to the hotels is not able to do that. The fisherman who depends on fish in the sea is not able to survive. And so, the pain is greater than that of a terrorist who has killed a thousand people and then is gone. The international community must report fairly on Kenya. We have not issued travel advisories against countries that have been attacked such as France, the US or Britain. We look at it and sympathize rather than laugh and slap them with travel advisories. So, from a businessperson’s perspective, we do business in an atmosphere that we cannot pretend that we are fully in control of. When a terrorist attacks, it is not the time to issue travel advisories. It is the time to weaken the terrorist by supporting the country that has been attacked. In doing so, you are actually weakening the terrorist. They have not won. When you slap us with bans and the country starts languishing, there are all these burdens of lack of jobs and employment and then poverty levels go up. Then the terrorists are winning. When the terrorists attack, please step in and let us enforce. There is technology that can detect them. Some of us are not that advanced. Can we share technology? Can you support these countries that have been attacked so we can bring normalcy as soon as possible rather than being slapped with a travel advisory?

Where are some areas where Kenya really stands out to international investors?

Right now, Kenya is the third fastest growing economy in Africa. Seven out of the ten fastest growing economies in the world are in Africa. Kenya stands right in the heart of Africa, which is where any international investors looking to reach out to Africa should position themselves. Nairobi is a hub for about 62 destinations across the world. We have a robust airline and a robust airport. For investors, you want to know that you can go in and out of a country swiftly and without problems. We also deregularized our exchange control regulations. If you come in with $100,000 for an investment that doesn’t work, you are easily able to take your $100,000 without any restrictions. In a lot of countries around world and in Africa, there are a lot of exchange control regulations. You are asked how much money you have brought into the country. In Kenya, you don’t need to declare how much money you brought in and we won’t ask how much you are taking out. As a country, we are encouraging free enterprise, liassez-faire, where people can operate and do their business without worrying about tomorrow. If tomorrow you feel your business is not working in Kenya and you want to go to Ethiopia, voila. We just say goodbye. Pack your money, your bank remits your money and away you go. Those are areas where the investors want to feel comfortable.

Also, people who are really looking at investment are looking to get a ready-made, qualified labour force, which Kenya offers. The biggest plus for Kenya is a very hard-working population. They are willing to painfully work through a process until they are able to achieve results. At the moment, we are on the threshold of take off. We are set to become a middle income country by 2030. We have a vision 2030 program that the whole country is working towards achieving which should be able to be realized earlier than the target date. We have a lot of infrastructure projects going on. Currently, we have the standard gauge rail running from Mombasa across the country to Kisumu, and then to Uganda and Rwanda. We have the largest infrastructure project in Africa, the Lapsset Project, which is a $1.7 trillion project involving a railway, road and pipeline running from Mombasa all the way through to Ethiopia and then across to South Sudan and Juba. We are going through a very exciting time. We have a young presidency that is also very robust and bubbling with energy. We are excited as a country to have good leadership. Politically we are very stable. There will be a bit of noise and politicians’ talk. But we keep politics in Parliament and people are busy working. Overall, we are doing very well. We can do better with some positive reports. Go outside of business and look at the social aspect: our sports teams, our rugby champions, our athletes that continue to dominate the world, our magnificent wildlife, and our tourism which is booming again. That is what is making us excited. The construction and the cities are booming in this country. Today, if you are a real estate investor and you are not in Nairobi, then you are in the wrong place. Because right now, Nairobi is rated as the number one destination for real estate investment in the world. Mombasa is number two in the world. Both cities topping the world real estate return are in Kenya. Miami is number three and Jakarta is number four. Any building that is coming up is already sold before it’s even off the ground. This means construction is a good indicator of how robust an economy is. And we are very, very robust.

What is your vision for what the Chamber will achieve for the businesses that you represent and the country in the next three years?

Right now, we are campaigning to retain our seats. We have just finished the county elections and are going into the national elections, which should be concluded by the end of July. Then we should have a new team in place. We don’t expect too much change. We should have another three years of motoring away. In the next three years, we are looking at a very exciting period. We have the national political elections next year. It’s already slowed things down, but Kenyans are very strange human beings. Sometimes we don’t get slowed down. Just like you can’t hold back our athletes, you can’t hold back Kenyans. So even as politics is happening, business continues. There will be a little tilt here and there, but largely, the country continues. Even the elections are a new business because that’s when people want to print posters, t-shirts, caps, everything. It’s new business for the guys who are involved in printing. I don’t see much change happening, even politically. The current regime will most probably retain their positions and there will be another five years of easy motoring. They have set out very ambitious goals for themselves. So far, so good. They have achieved quite a lot.

If you drive around you will see a lot of infrastructure. There are road networks and buildings coming up, and the expansion of the city outward. We’ve noticed, unlike most countries where there has been a lot of rural-urban migration, we are now seeing the reverse, urban-rural. People are seeing that because of the devolved system of governance where the counties are like little governments of the bigger government, there’s a lot of money happening there. So the people who are hitherto moving from rural areas to the urban to look for high profile white collar jobs and business are now moving back to their counties because now, there is a lot of money spread out over the whole country. The interesting thing I see in the next five years is a complete transformation of the country. Because of the new devolved system of governance, this development is happening in every pocket of the country. We will actually start seeing the benefits of a devolved system of government where even the hitherto rejected or ignored counties have some money happening there. There are new roads, new development centres, and new industries coming up. There is the discovery of oil and gas up north, minerals and coal. The whole country is really just booming with activity. The fact that the counties are able to control some of these resources and wealth within themselves means there is a new nucleus of development in these county governments. If everything grows up, it will be like mushrooms and there will be pockets of good things happening across the whole country. Certainly, not just the fact that have new road networks and railways. The whole country is just going to develop in tandem.