State making it hard for businesses to survive

It is an established fact globally that most businesses do not survive beyond their first three years. This reality is due to many factors, be it limited capital, poor cash flow, weak demand, or lack of managerial experience. Starting a business anywhere is difficult.

But in Kenya, there appears to be an additional, more troubling factor at play, one that feels less accidental and more deliberate. Many Kenyans feel the authorities are actively shortening the lifespan of businesses through excessive regulation, harassment, and a predatory approach to enforcement.

A friend recently narrated his experience during the first week of opening his business. Instead of receiving encouragement or guidance, he was subjected to a barrage of visits from various officials, each claiming a mandate to inspect, approve, or certify some aspect of his operations. What should have been an exciting milestone quickly turned into a baptism of fire into realities of doing business here.

The first to come calling were council officers. I think we are being too kind by calling them ‘officers’ since they are more of hoodlums than refined gentlemen, ostensibly to check whether the business had all the required licences. They demanded to see permits for trading, signage, sanitation, and all manner of other things.

To my friend’s credit, he had done his homework. Every licence was in place, every fee paid. Rather than congratulate him or wish him well, the officials left visibly disappointed. There was nothing to fault.

Then came public health officials to check whether the premises adhered to hygiene standards. Ironically, their own appearance raised questions about their personal sanitation, but that’s neither here nor there. Still, they combed through the kitchen and washrooms, inspected surfaces and storage areas, and found nothing wrong.

Once again, they left disappointed, having failed to justify their visit with a violation (read bribe). The parade did not end there. A phalanx of other characters followed. Others demanded proof of a licence to play music on the radio, because the Music Copyright Society or some such body demands you pay a fee for switching on the radio. There are inspectors for waste management, building compliance, labour practices, and, of course, the most notorious of them, parking.

The point here is not to argue against regulation. Standards matter. Health, safety, and fair taxation are important in any economy. The problem lies in how these regulations are applied.

Instead of being supportive and developmental, enforcement often feels hostile and extractive. Businesses are treated not as engines of growth and employment, but as targets for revenue collection and rent-seeking.

What makes this situation more frustrating is that the basic services one expects from these same authorities are often nonexistent. Roads are poorly maintained, waste collection is unreliable, security is inconsistent, and power and water supply remain erratic. Yet officials move swiftly and efficiently when it comes to inspections, licences, and penalties. The imbalance is glaring.

Governments routinely speak about supporting small and medium enterprises, acknowledging them as the backbone of the economy. But actions on the ground tell a different story. One practical step would be to introduce a tax holiday for new businesses, allowing them time to stabilise, grow, and become profitable before full taxation.

Similarly, the burden of licences and permits should be lifted during the initial years, or at least applied incrementally. A business in its first year should not face the same regulatory demands as a well-established enterprise. Entrepreneurs do not ask for handouts.

They ask for space to breathe, to experiment, to grow. Killing businesses at birth through harassment and overregulation only deepens unemployment and stifles innovation. If most businesses already struggle to survive their first three years, Kenya should be doing everything to extend those oddsnot conspiring, deliberately or otherwise, to shorten them.

-The writer is a communications consultant