Small businesses in Kenya are faced with the obligation to contribute a minimum annual subscription of Sh5,000 to the Kenya National Chamber of Commerce and Industry (KNCCI), following the government’s proposal to enforce mandatory membership to the organization. On Monday, Moses Kuria, the Cabinet Secretary for Investment, Trade and Industry, announced that a law making it compulsory for all businesses to belong to the KNCCI is under development in order to fortify the trade group.
Speaking at the 3rd Kenya International Investment Conference, Kuria declared that the proposed legislation is expected to reach the Cabinet for approval within a month. “We are in the process of crafting the National Chamber Bill, which is slated for Cabinet review in the coming 30 days. The aim is to build a Kenya Chamber that truly embodies Kenyan businesses,” said Mr. Kuria.
Kuria underscored that, as outlined in the Chamber Bill, every registered company in Kenya would be required to have KNCCI membership. “It won’t be optional, but mandatory,” Kuria added.
The compulsory affiliation to the non-profit private company, which advocates for the commercial and industrial interests of Kenyan businesses, poses a new challenge for entrepreneurs who are already grappling with the high costs of business operations.
The KNCCI membership fees range from Sh1,000 for sole proprietors plus Sh5,000 in annual subscription fees, to Sh15,000 for business associations and groups, Sh10,000 for partnerships, and Sh15,000 for small and medium enterprises. Local public companies are required to pay Sh50,000, while the corporate membership fee is pegged at Sh100,000 annually.
Despite fears that the obligatory KNCCI subscription would exacerbate the business costs for entrepreneurs, especially at a time when the government is committed to boosting the ease of doing business to promote job creation, Kuria downplayed these concerns. “There may be outcry that this will raise the cost of doing business. However, if you find it costly to pay for chamber membership, then consider employment,” he asserted.
Current burdens for businesses include costly multiple licenses needed for operation, increased domestic borrowing by the government that hampers private sector access to credit, and rising costs of electricity, labour, and raw materials. These challenges, coupled with the devastating impacts of the Covid-19 pandemic, have been exacerbating the business environment for many struggling enterprises.