Why we need a unified business permit now

Intercounty trade is the lifeblood of Kenya's economy. It connects farmers to markets, manufacturers to consumers, and businesses to new opportunities.

By facilitating the seamless movement of goods and services across our 47 counties, intra-county trade stimulates local economies, creates jobs, and enhances our national economic resilience.

Yet, despite its critical importance, numerous barriers hinder its efficiency and potential.

Imagine running a business where every time you cross a county line, you face another set of fees, permits, and delays. This scenario is an everyday reality for Kenyan entrepreneurs who source raw materials or distribute goods across our counties. It’s not just frustrating; it's expensive and inefficient, stifling growth and innovation across our nation.

Take, for instance, a manufacturer based in Nairobi sourcing raw materials like milk, grain, and vegetables from Nakuru, Nyandarua, Kiambu, and Machakos counties. Each county demands its own cess fee—often around one percent of the value of the goods.

Before the manufacturer even starts production, they face multiple cess charges simply for transporting goods across county borders.

But it doesn't stop there. When the products are ready to hit the market, the manufacturer must secure separate distribution permits from every county where the goods will be sold. On top of that, branded vehicles are charged additional fees every time they enter a new county.

This complex maze of licensing means a distributor covering just eight counties can easily rack up over Sh1 million per year in additional licensing costs. This extra burden inflates the cost of products, making them less competitive both locally and internationally.

The Kenya National Chamber of Commerce and Industry recently found businesses are dealing with up to 20 different clearances and permits, spending hundreds of thousands of shillings even before they can fully operate.

These high costs ultimately trickle down to consumers, making Kenyan products more expensive and less attractive compared to cheaper imports and competitive international markets. This directly threatens our economy’s potential, especially as we aim to capitalise on agreements like the African Continental Free Trade Area.

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It's clear we have a problem, and the solution is equally clear: adopting a nationwide Unified Business Permit. Imagine a simplified system where businesses apply once, pay one fee, and get a single permit that covers their operations in all counties. This streamlined approach would dramatically reduce administrative headaches and unnecessary costs.

To implement this effectively, we need strong collaboration between our national government and the county governments, coordinated by the Council of Governors (CoG).

Fortunately, we already have a legal foundation through the County Licensing (Uniform Procedures) Act of 2024, paving the way for this essential reform.

A practical first step is creating a centralised digital platform integrated with existing government services like e-Citizen. This system would also transparently distribute revenue among counties, based on clearly defined criteria such as the businesses’ physical presence and economic activity within the counties.

Counties can work with the CoG to agree on standardised fee structures, ensuring fairness and consistency across the country.

Introducing this reform in phases—starting with critical areas like distribution permits and cess fees—would allow counties to adapt their financial systems smoothly.

The benefits of implementing a Unified Business Permit are extensive. Firstly, it would significantly reduce business costs, helping small and medium-sized enterprises (SMEs) that are disproportionately affected by complex licensing requirements.

Secondly, eliminating redundant inter-county charges would boost the competitiveness of Kenyan products both locally and globally.

It would foster a more accessible national market, enabling businesses to scale quickly and efficiently across the country. Consumers everywhere would benefit from greater product variety and lower prices.

Lastly, a unified system would enhance transparency and efficiency, reducing corruption and bureaucratic delays. Counties would benefit from increased compliance and improved revenue collection, creating a win-win situation for governments and businesses alike.

We stand at a crossroads with the chance to significantly simplify our business environment and unleash Kenya's immense economic potential.

KNCCI urges our national and county governments to act now, unify our licensing system, and create a seamless, competitive internal market. One Permit for One Kenya is not just a slogan—it's our path to a prosperous and thriving economy for everyone.

The writer is the President, Kenya National Chamber of Commerce and Industry (KNCCI)