Mombasa, Kenya – A recent two-week study conducted by The Coast Civil Society Network for Human Rights (CCSNH) has revealed a strong correlation between business licensing compliance and the quality of infrastructure and service delivery in Mvita Sub-County, Mombasa. The study, conducted in December 2024, surveyed 14,808 businesses and uncovered that an additional 18,562 sub-businesses operate under the permits of principal licensees, highlighting the prevalence of smaller, informal businesses.
The report, focusing on enhancing licensing compliance and service delivery, identified significant gaps in essential services. These include inadequate drainage systems leading to frequent flooding, poorly maintained roads hindering accessibility, inconsistent waste collection forcing businesses to contract private services, and insufficient street lighting contributing to security concerns. The study found that 40% of businesses in Tononoka and Ganjoni wards reported security issues due to inadequate lighting, negatively impacting their nighttime operations. This finding was corroborated by Muslims for Human Rights (MUHURI) Executive Director Walid Kassim, who emphasized the security challenges faced by business owners.
A significant issue highlighted by the study is the prevalent mistrust in the licensing and enforcement processes. 50% of surveyed businesses reported experiencing or witnessing instances of enforcement officers soliciting bribes. This corruption not only undermines the revenue collection process but also creates an unfair business environment.
The CCSNH report offers several key recommendations for the Mombasa County Government:
Leverage Technology: The report urges the adoption of technology to streamline the business licensing process, making it more efficient and transparent. This includes online portals for application and payment, as well as digital record-keeping.
Transparency and Accountability: Increased transparency in the licensing fee structure is crucial, along with measures to combat corruption and harassment by enforcement officers. Clear guidelines and a robust complaint mechanism are needed.
Business Owner Engagement: The study emphasizes the importance of including business owners in decision-making processes, especially regarding tariff setting and resource allocation. Regular consultative forums and stakeholder engagement platforms are recommended to foster better communication between the business community and the County Government. A quarterly feedback forum was specifically suggested to provide a platform for businesses to voice their concerns.
Infrastructure Improvement: Addressing the infrastructure deficit is paramount. The report calls for urgent upgrades to drainage systems, improvements in waste collection services, and consistent road maintenance, particularly in areas like Majengo, Old Town, and Tudor.
Lower Initial Licensing Fees: To encourage the formalization of informal businesses, the study proposes lowering initial licensing fees, especially for businesses operating in underserved areas. This would incentivize compliance and broaden the tax base.
Accountability and Action: The report stresses the need for proper accountability and tangible action to improve the trading environment within Mombasa County. This includes holding officials accountable for corruption and ensuring that collected revenues are reinvested in service delivery.
Natural Resource Leveraging: The report advises Coast Governors to explore and leverage natural resources within their counties to diversify revenue streams and reduce reliance on business licensing fees.
Public Participation in Policy Making: County Assemblies are urged to increase public participation in the formulation of policies and enactment of legislation. This will ensure that the needs and concerns of the business community are reflected in the legal framework.
CSCNH Chairman Zedekiah Adika acknowledged the County's success in revenue collection from businesses, estimated at Sh276 million in Mvita Sub-County alone, with small businesses being the primary contributors. He noted that Mvita Sub-County contributes a substantial 45% of the estimated Sh600 million total revenue potential for the entire county. Adika reiterated the call for lower Single Business Licensing fees to encourage greater participation in the formal economy. He emphasized the need for a direct correlation between revenue collection and improvements in service delivery, stating, “We want a reflection of revenues collected in service delivery.” The study concludes with a strong call for action, demanding that the voices of the business community be heard and that tangible improvements be made to the business environment in Mombasa. Further research into the specific challenges faced by sub-businesses operating under principal licenses is also recommended.
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