Kenya has, arguably, the strongest economy in East and Central Africa, which attracts numerous investors, some of them multinational companies.
But if the events of recent weeks are anything to go by, one is left wondering whether the country is really ready for investors.
Investment is known to increase a country’s income. And most developing countries, including Kenya, strive to make good use of these foreign companies to boost their economies.
With more jobs and higher wages, the national income normally increases. With the boost in their income, the buying power of the citizens improves, leading to economic growth.
Events of the past month have proved that the regulations and tax systems in the country may not be the best for an investor who is aiming at making profits — the main purpose of setting up a business.
Of late, company after another have ceased their operations, focusing on expanding their businesses elsewhere.
Botswana-based Choppies Supermarket closed shop last month, just four years after they acquired Ukwala stores for Sh1 billion.
The retail chain classified its 12 stores as distressed, and therefore disposed of them to focus on countries where business was reportedly doing well.
East African Portland Cement Company (EAPCC), which also has operations in neighbouring countries, is crumbling under debt, blaming its woes on high cost of inputs and production difficulties.
Trade Cabinet Secretary Peter Munya was quoted as saying that only investors could save the struggling company by injecting funds into it.
Betin and SportPesa, hitherto betting giants in the country, have finally stopped operating in the country after strict regulations were imposed on them.
About 2,500 workers have been sent home and thousands of, especially, youth who engaged in betting either for sustenance or even as a pastime left in a hopeless situation.
A recent crackdown on illegal gambling firms by Interior Cabinet Secretary Fred Matiang’i is said to have been in the best interests of the youth.
But now, how do we recover the goodies that came with betting companies being operational — from sponsorships for our local football clubs to millions of shillings in taxes that they paid annually, as well as employment of many citizens?
Parliament’s decision to impose a 20 per cent excise tax on gambling stakes left the betting firms with no room to make viable profits, so they claimed as they announced their exit from the country.
To attract new investors and sustain the existing ones, Kenya ought to implement appropriate macroeconomic policies, train its workforce to be highly productive and affordable, establish stable legal systems, develop infrastructure to enable products to easily reach the market, maintain political stability and put favourable tax rates in place.
The government should do anything within its power to avoid frustrating investors. After all, these are the goose that lays the golden egg — taxes.
Ms Gatwiri is a BSc Communication finalist at Moi University. [email protected]