This archive report was first published on 15 October 2019.
Kenya's economy, once a beacon of hope for investors in East and Central Africa, is now facing a crisis. The country's strong economy, which attracts numerous investors, including multinational companies, is being threatened by unfavourable regulations and tax systems.
Recent events have left many wondering whether Kenya is truly ready for investors. The country's regulations and tax systems may not be conducive to making profits, the main purpose of setting up a business.
Several companies have ceased their operations in Kenya, focusing on expanding their businesses elsewhere. Botswana-based Choppies Supermarket closed its 12 stores in Kenya last month, just four years after acquiring Ukwala stores for Sh1 billion.
East African Portland Cement Company (EAPCC) is crumbling under debt, blaming its woes on high cost of inputs and production difficulties. Trade Cabinet Secretary Peter Munya has urged investors to inject funds into the struggling company.
Additionally, betting giants Betin and SportPesa have stopped operating in the country after strict regulations were imposed on them. About 2,500 workers have been sent home, leaving thousands of youth who engaged in betting in a hopeless situation.
Parliament's decision to impose a 20 per cent excise tax on gambling stakes has been cited as a major reason for the betting firms' exit. To attract new investors and sustain the existing ones, Kenya needs to implement appropriate macroeconomic policies, train its workforce, establish stable legal systems, develop infrastructure, maintain political stability, and put favourable tax rates in place.
