The 2010 Constitution of Kenya ushered in a new system of devolved government. It will take a bit of time for the country to fully realise the benefits of devolution, especially for businesses. However there still is a bit of impact of the devolution system on businesses especially as far as county laws are concerned. Most counties have already started enacting their county laws touching on several issues. It is important for your business to get acquainted with the new county laws especially in the counties that your business operates as these laws will definitely impact your business. Today’s business in Kenya is governed by national laws as well as county laws.
There is a high possibility that not every county will enact a similar law and thereby you may find that the various counties have differing county laws. This is very significant especially for businesses which are spread over several counties. A business such as this one, may find its operations being affected by different laws depending on the county. County laws should now form a basis for your annual SWOT test. You should be able to analyse the county laws in every county that your business is located and find out what opportunities or threats are being created by such laws. A SWOT test such as this, would be key in decision making for your business. Let us use the hypothetical example of a business in the matatu industry and which plies through the CBD of Nairobi County. Such a business shall definitely be affected by the increased parking levy and should include this in its SWOT. National expansion strategy should also be guided after doing an analysis of the county laws in the host county.
Chapter eleven of the Constitution provides for devolution and Article 174 of the Constitution specifically states the goals of devolution. One of the main goals of devolution is to allow some form of self governance. In the month of February 2014, a case filed by 26 petitioners, set precedent in the area of devolution. The case Nairobi Metropolitan PSV Saccos & 25 others Vs. County of Nairobi was a case whereby the petitioners filed a petition challenging the decision by the County Government of Nairobi to increase parking fee. The plaintiffs were PSV operators who felt aggrieved when the County Government purported to increase the parking fee from kHz. 140.00 to Kshs. 300, almost double the rate. They filed the petition in court arguing that the increase was unconstitutional and the main reason for their argument (amongst many other arguments), was that the county government had not given them sufficient opportunity to participate in decision making. They also felt the decision contravened their constitutional rights as consumers. The respondent argued that they had invited the public to participate in the forum and therefore the petitioners had no good claim against the county government. The County Government won the case in a decision that will interest most businesses due to the reasoning behind it.
The court’s ruling in this case, is going to set a precedence in devolution. One finding of the court was that Article 10(2) of the Constitution on participation of the people contemplated a participatory democracy that was accountable and made provision for public involvement. What this means, is that your business should participate in public forums organized by your county and should freely give its views.
Another finding of the court, was that county governments have exclusive mandate over county transport, which in this case, includes transport. It is therefore important for your business to understand the mandate of the county as they have mandate in some issues such as transport. They are also allowed to impose a levy on services such as parking. This therefore means that most decisions and laws passed at county assembly level are law and are binding.
Section 87 of County Government Act which is No. 17 of 2013, sets out the principles of citizen participation in county affairs.
I want to therefore urge businesses to take advantage of Article 10(2) of the Constitution and Section 87 of the County Government Act to participate more in county affairs. Remember whatever decisions are made at the county level will have a significant bearing on your business. It is therefore important to participate in public forums held by your county government.