Worldwide, the country dropped from 87 to 95, because since 2008, Kenya 'stood still', and has since been overtaken by others in the region such as Rwanda, the bank's country director, Mr Johannes Zutt said.

Kenya's favourable ranking in 2008 was mainly due to the government's move to reduce by a third the number of licenses required to set up business.

There has been no significant follow-up on this, Mr Zutt said, and it still remains difficult to set up business in Nairobi.

Mr Zutt was speaking during a workshop at the Kenyatta International Conference Centre to discuss and validate a bill to regulate business in the country.

At the meeting, the Kenya Private Sector Alliance criticised the creation of parastatals, which had made it expensive to do business in the country.

Mr Kariithi Murimi, chairman of the public finance sector at Kepsa, said the conversion of ministry departments into parastatals had only increased the revenues businesses have to pay to government.

He cited grey areas such as the interaction between the National Environment Management Authority and the ministry of Environment.

He added that delays in areas such as approval of building plans are also hurting business, with instances where the Physical Planner takes several months to approve them.

The Business Regulatory Reform Unit prepared the bill under discussion, which aims to streamline running of business in Kenya.