KNBS Planning Launch of Business Index for Investors
Investors wishing to set up new businesses in Kenya will find it easier to obtain sector information if a new drive by the government becomes a success.
The Kenya National Bureau of Statistics (KNBS) is carrying out a census on establishments and hopes to gather enough data to create a business index that reflects the production capacity.
“This is the master framework where we hope to create a comprehensive survey on a number of variables to help policy makers,” KNBS production statistics director, James Gatungi, says.
The numbers agency wants to collect data on production, map business establishments and gather figures on employee earnings, which will help policy makers to come up with accurate plans.
“We are appealing to business people to respond to this data request,” KNBS said through an advert in the Press last week.
The only survey that captures Kenya’s economic statistics today is the annual Economic Survey, which carries notes on all the sectors.
Specific segments
Critics have, however, argued that the survey captures wide economic sectors but does not give details on specific segments to help investors arrive at a decision faster and without losing opportunities.
In the long run, the agency hopes that it will carry out an economic survey on small and medium enterprises (SMEs).
“Lack of information is one of the worst challenges businesses face and will go a long way into creating standards similar to developed countries,” Joseph Kirubi, a director of Westwood Management , a valuation and consultancy firm says.
Valuing a business requires accurate data to enable fairness for both the consumers and producers, lack of accurate data has forced many businesses in Kenya rely on unconventional methods of business, he says.
In addition, by counting all establishments, future entrepreneurs will be saved the agony of venturing into saturated markets or setting up shop in unviable areas.
Those already in businesses would be able to use the data to track their progress by comparing their results to industry averages.
Financiers would also benefit since a clearer picture of specific industries will create a gauge on the relative risk and return of businesses, enabling better structured loans.
Unfortunately, some businesses have been known to shy away from giving information which would reveal their competitive edges.
Knowledge of the number of business establishment may also arm bodies such as the Kenya Revenue Authority and the National Social Security Fund which are targeting SMEs.
The Nairobi City Council (NCC) is carrying out a similar exercise through the Kazi kwa Vijana initiative with the aims of creating a database to consolidate its revenues.
Nothing to fear
KNBS, however, says that there is nothing to fear since all establishments that are going to be counted are on a list sourced from KRA among other government agencies.
Tracking employee earnings is a target of the census but it will not translate into a better bargaining tool for both the employer and the employee especially in the private sector where information is scant.
“The private sector is tricky since what you pay depends on the levels you are producing so you may not conclusively say that the information will be used in this way,” Mr Gatungu said.
Author: John Gachiri
Source: Business Daily (http://www.businessdailyafrica.com/Company%20Industry/-/539550/818450/-/item/0/-/lmjxv5z/-/index.html)
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