Devolved governance units that were introduced in Kenya following the promulgation of the new constitution have localised the delivery of essential national government services as well as offered different parts of the country the autonomy to make specific decisions that impact the areas under their jurisdiction. This has seen the initiation of programs and projects whose conception is based upon the most urgent needs of the residents of the different counties. In this sense, the introduction of devolution into the governance structure of Kenya has helped in the decentralisation of power from the national government to county governments. Counties are now responsible for the direction in which they choose to go for they can now legislate their own laws through their county assemblies. Further, Counties have come together to form regional economic blocs whose main aim is to bolster trade within the member counties by pooling their resources.
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Revenue generation has been one of the challenges that counties have been grappling with. This aspect is crucial as it will make these units to reduce their reliance on national government for operational and development financing. In a quest to collect revenue, county governments have had to pass legislation that enables them to do so. This has led to a situation whereby each county has come up with its own levies and rates. For businesses that operate between two or more counties, such as those that are in agribusiness, conducting business has become a costly affair with the introduction of a variety of cess fees. This is the case as most of these businesses have to transport their goods to markets that are not in their counties of origin. They are thus required to pay multiple cess fees for those goods across different counties. This replicative system of taxation is expensive and particularly burdensome for micro and small businesses.
An aspect that has come out strongly during some of my work when interviewing informal traders in different parts of the country is that of favouritism and tribalism, which has become pronounced with the inception of devolved governments. People who are not from communities that are indigenous to certain counties are finding it difficult to operate even small businesses. This comes out strongly in instances where these businesses apply for loans at various county offices and are frustrated on the basis of their tribal affiliation. This factor has become so deeply rooted and has even played out in various sections of the media, with certain governors calling for the legislation of laws that arm twist institutions and private companies into ensuring that staffing in their organizations is constituted of up to 70 percent of indigenous members.
Further, when it comes to the allocation of spaces within which they can work, small scale traders are often side lined and often find themselves playing hide and seek games with county authorities to the detriment of their businesses. It is with this in mind that a bill has been introduced in the Kenyan Senate to address some of these obstacles. The bill proposes the formation of a Hawkers and Street Vendors Authority that will be tasked with the registration, regulation and monitoring of traders in this sub sector of the informal economy. The bill also aims at ending tussles concerning the payment of prescribed fees and charges by small scale traders and proposes that county governments designate vending zones for them.
Some of these issues can be dealt with in a way that is beneficial to both the informal businesses and the respective county governments. For a start, counties should support small business as these are a means to building a base for the growth of industries in their regions. By this I mean that most industries would require raw materials for their operations which can be locally sourced. This facilitation should be in the form of harmonization of fees and levies across counties in the different economic regional blocs. Another way this can be achieved is through supporting the ecosystem that boosts the livelihoods of the county residents. A good example is that of the agribusiness, whereby making farm inputs easily accessible to small scale farmers and investing in market structures for their produce will improve household incomes of the residents.
Informal Economy Analyst