Coast tourism investors risk losing out on a Sh. 3 billion tourism recovery economic stimulus funds from government due to lack of compliance and crucial documents required by the government.
The Region has been allocated Sh. 1.8 billion from the total amount but only Sh. 300 million has been taken in the past year.
It has emerged that the issue of Tourism Regulatory Authority licenses, Kenya Revenue Authorities among other key documents required contributed to the low number of applications from the region.
Reports indicate that some of the stakeholders could be operating illegally that’s why they find it hard to issue key documents that are required by the Government as it could eventually force them to pay tax which they have been evading for years.
The governments authorities were forced to engage the stakeholders for the second time before opening the portal so as to enable them to apply for the funding to help them refurbish their establishments.
For the past one week authorities have been holding tourism stakeholders meetings from Taita Taveta, Kwale, Mombasa, and lastly in Malindi.
The Malindi meeting brought together stakeholders from Kilifi county and Lamu county so as to find out why there were few applications for the funding aimed at cushioning them against the Covid 19 pandemic which highly affected their businesses.
A Report from the economic stimulus program on the refurbishment and economic stimulus package indicated that Coast had been allocated Sh. 1.8 billion which is 60 percent of the Sh. 3 billion funding while the rest of the country shall get Sh. 1.2 billion.
Currently, the total applications are Sh. 7.29 billion with the Coast region having only sent applications worth Sh. 1.5 billion.
Kilifi county applications are Sh. 317 million, while Kwale and Mombasa had applications worth Sh 214 million and Sh. 942 million. Taita Taveta applications were worth Sh. 52 million.
Lamu county which is a key tourism destination had no single application.
Tourism Finance Corporation Managing Director Jona Erumoi said performance of Coast region which was a ring-fenced amount of Sh. 1.8 billion was low as they only received applications for only Sh. 1.5 billion.
”Of these Sh. 1.5 billion applications we had challenges in terms of wrong purposes considering this is a refurbished fund to ensure the beach products are well refurbished and fit the competitiveness of the market,” he said.
Erumoi said Lamu did badly as they never had any applications which was a very big concern to the government.
The MD said they received only three applications from Taita Taveta county, Two in Kilifi County, and very few in Mombasa and Kwale.
”The biggest challenge has been on documentation and people applying for the wrong purpose instead of refurbishment they were asking us to buy off or sell off the loans and the rest,” he said.
He said the government will dispatch a team that will help the stakeholders from all the five counties to be able to run the process between now and the end of January to be able to consume the Sh. 1.5 billion which is remaining for the Coast region.
Erumoi said the maximum loan is Sh. 50 million per establishment and in a chain hotel the maximum is Sh200 million which has terms of 5 percent interest payable after one year for 10 years.
Maureen Awuor the chairperson of Kenya Hotel Keepers and Caterers Association North Coast region said most of the tourism businesses have been running but are not fully compliant.
She said most of them are not complying with some not paying their taxes which has contributed to the few applications.
”The condition was tax compliance, KRA, for one to get the tourism fund, and those are things which are actually needed,” she said.
Awuor said anyone running a business must have all required licenses but in areas like Kilifi county, there is a lot of mushrooming properties and businesses which are not compliant that’s why they keep on complaining.
She said even if one goes t0o records of NHHF and NSSF very few staff are recorded which means there have been low staff turnover and low peaks with many people out of jobs but in the real statistics there is nothing.
The chairperson urged the stakeholders to ensure they comply so as to make work easier so as to get the necessary help required by the government.
She said the government can’t quantify the region coming from the region which at times makes it difficult for some projects to be implemented.
Anthony Kingi a board director of the Tourism Finance Corporation said they sat as board reviewing the applications from Caosst were not satisfactory and resolved to give the stakeholders a second chance to sensitize them on how to apply.
He said it does not make sense that the region was allocated Sh. 1.8 billion yet the applications were very few.
Kingi said tourism product is tired in the region as many are old with some built as early as the 70s and the funds were aimed at helping them upgrade them to suit the modern markets.
”I think many of the stakeholders had not understood that’s why they were complaining that the process is long because when you are doing business you must pay KRA, business permit, Tourism levy, these are things one must have and if you do not have it means the business you have been operating was illegal,” he said.
He said in other parts of the country many people have applied successfully and are now waiting for the funds.
Kilifi County CEC Member for Tourism and Trade Nahida Mohamed said it was sad that there were very few applications in the county and Coast at large despite the fact that President Uhuru Kenyatta had given.
She said the Coast region is yet to utilize Sh. 1.5 billion after only Sh. 300 million were absorbed for failure to comply with the requirements.
”As a county government we are ready to help the investors get the necessary licenses so as to be able to enable them to be compliant and apply,” she said.
Mohamed thanked the National government led by President Kenyatta and Tourism Finance Corporation for giving the Coast region a second chance to apply for the funding.
Frida Njeri the owner of the Floating bar in Lamu County said stakeholders in her area did not apply because they were not aware of the funding.
She said after getting the invitation she passed it to many others but the majority did not turn up for the second sensitization in Malindi.
Njeri said the government should go and tour the establishments which are not many in Lamu so as to enable them to benefit also.
”Lamu is a renowned destination which was famous for international tourism, we used to receive many tourists from Europe and all over the world but after the insecurity cases Lamu went down,” she said.
She said they began promoting domestic tourism which picked well and now despite covid 19 they are still recording a good number of tourists,” she said.
Njeri said Lamu is safe and the areas of Boni forests that used to have attacks are far away that’s why many now feel safe when they tour the area.
Ghalib Ahmed popularly known as Bush from Lamu said businesses have suffered due to the pandemic and thanked the government for the initiative.
Alwy said he would sensitize other stakeholders in Lamu as many people have suffered losses.
”We had no information about this funding from the government but when we were notified we took action that’s why we are here today,” he said.
Currently, Tourism finance cooperation will dispatch a team to the five counties to help the stakeholders in the application process.