President William Ruto’s plan to grow the country’s Gross Domestic Product (GDP) growth rate to 7.2 per cent by 2027 may be in jeopardy as experts warn of manufacturers fleeing the country over regulation mishaps and harsh taxation 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 organisation's members had cautioned of negative effects on the larger economy if the government doesn't vet the policies it continues to introduce thoroughly.
Particularly referencing the Finance Bill,2024, Kiplimo lamented that the government has been introducing new taxes that affect the cost of raw materials and production in general.
Consequently, the increased costs in manufacturing are expected to trickle down to the consumers through increased costs of goods.
Further, the Chamber of Commerce has warned that investors are now increasingly considering neighbouring East African countries better destinations to set up shop, denying Kenya much needed opportunities.
“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 voicing its position comes after the organisation published its KNCCI Barometer Report 2024, which expressed concerns over an unpredictable business environment which was cited as a possible reason behind activity in Kenya's private sector shrinking.
Additionally, earlier on during the week, an American business advisor, the Managing Director of Exigent Risk Advisory, Declan Galvin expressed almost similar concerns.
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 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,” elaborated the risk advisor.
