Kenyan Gov’t’s Unpredictable Business Environment Could Scare Away Investors
President William Ruto’s plan to increase the country’s Gross Domestic Product (GDP) growth rate to 7.2 percent by 2027 may be jeopardized, as experts warn that manufacturers are fleeing the country due to regulatory mishaps and harsh tax policies.
Speaking during an interview with K24 TV on Saturday, the Kenya National Chamber of Commerce and Industry’s (KNCCI) Head of Policy Research & Advocacy, Kiplimo Kigen revealed that the organization’s members had cautioned of negative effects on the larger economy if the government doesn’t vet the policies it continues to introduce thoroughly.
Kiplimo, specifically referencing the Finance Bill 2024, lamented that the government has been introducing new taxes that affect the cost of raw materials and production.
As a result, additional manufacturing costs are projected to be passed on to customers in the form of higher product prices.
Furthermore, the Chamber of Commerce has cautioned that investors are increasingly considering neighboring East African countries as preferable places to set up company, losing Kenya vital possibilities.
“What we’re hearing from our manufacturers at the Chamber of Commerce is that the discontentment is getting to a position where they’re considering moving their production to neighbouring countries and then just supply back under the East African community tariff and sell their products to Kenya,” stated Kiplimo.
The Kenya Chamber of Commerce’s statement comes after the organization issued its KNCCI Barometer Report 2024.
They voiced concern about an unstable business environment, which was mentioned as one possible reason for the decline in Kenya’s private sector activity.
Additionally, earlier this week, Declan Galvin, the Managing Director of Exigent Risk Advisory, expressed similar worries.
Galvin stated that the country has been creating new regulations rapidly without thoroughly scrutinising the existing environment and without retiring existing policies.
“It is an enormous frustration for business especially if they are bringing capital in,” Declan remarked.
“If we revise those rapidly overnight or in the course of the month as opposed to phasing them out, say this will be a new thing in twelve months or in twenty-four months this will come into place, that creates a certain degree of uncertainty whether you are a Kenyan business or a foreign corporation,” he elaborated the risk advisor.
Kenyan Gov’t’s Unpredictable Business Environment Could Scare Away Investors
