Real estate developers in Kenya have expressed satisfaction with the scrapping of the construction levies charged by the National Construction Authority (NCA) and National Environment Management Authority (Nema).
In this years national budget Kenya announced that it was removing the construction levies to reduce the cost of doing business.
Developers in Kenya have been paying the NCA 0.5% of the total value of construction projects worth over Sh5 million.
Real estate developers welcomed the government’s decision saying they were forced to pay alot of money for their projects. For developers, constructing a building in Kenya is very involving. For example,“You need approvals from the county. But when building next to a water body, approval from Water Resources Management Authority (WARMA) is required .
Developers also say you have to pay environmental watchdog Nema for an environmental assessment report and approval. Nema charges a minimum of Sh10,000 or 0.1 per cent of project cost for impact assessment.A fee is also paid to NCA.
Some of the developers in Kenya with little financial muscle have been forced to abandon projects. Developers in Kenya want one consolidated authority where they can pay fees once.
There is a general believe that many foreign investors who have come to do feasibility studies in Kenya have left because of government long procedures. Some developers in Kenya says that some investors have have left for Ethiopia and other neighbouring countries, although Kenya offers great investment opportunities.
In 2015 Acting Lands, Housing and Urban Development Cabinet Secretary Dr. Fred Matiang’i advised the NCA to adopt the ‘one-stop window shop’ model of payment which will help in the acquiring process, he further said that majority of investors end up spending too much time and resources on a process that discourages them from investing.
“National Construction Authority should create a good investment environment by reducing the levies for acquiring construction permits,” he said at the time.