Rédaction Africa Links 24 with Kenyans.co.ke
Published on 2024-03-26 14:34:30
The Parliamentary Committee on Trade, Industry, and Cooperatives, under the leadership of Chairperson James Gakuya, recently raised concerns about the government’s policies that have led to private companies exiting Kenya in favor of setting up operations in other countries. During a consultative forum with the Ministry of Trade, the Committee pointed out that the recent trend of investor flight can be attributed to increased taxes and a challenging business environment in Kenya.
The legislators expressed worry over the fact that many companies are choosing to leave Kenya for neighboring East African countries such as Tanzania and Ethiopia. According to the MPs, these countries offer a more favorable business environment with better taxation policies, affordable electricity, and stable regulatory frameworks. This trend has resulted in a significant number of Kenyans losing their jobs as private companies close their operations in the country.
Chairperson Gakuya highlighted the impact of these developments, noting that areas like the industrial sector were now deserted, leading to a loss of economic activity and employment opportunities. He also mentioned that some companies had chosen to move their operations to China to reduce operational costs and simplify the process of importing raw materials for their industries.
Gakuya raised important questions about the decisions made by these companies, stating that if certain commodities needed to be imported, then why were factories established in Kenya in the first place. He emphasized the need to bring back industries to the country to reduce the pressure on the dollar and boost local manufacturing.
A report by the Parliamentary Budget Office (PBO) further highlighted the concerning trend of foreign investors leaving Kenya due to the challenging business climate. The report indicated that the erosion of investor confidence and reduced capital formation contributed to a difficult economic landscape, as evidenced by diminishing profits at the Nairobi Securities Exchange (NSE).
In light of these developments, the Committee underscored the importance of creating a more conducive business environment to attract and retain investors. By addressing issues such as high taxes, regulatory challenges, and infrastructure inadequacies, Kenya can work towards reversing the trend of companies exiting the country. Additionally, promoting local industries and encouraging investment in key sectors will help stimulate economic growth and create employment opportunities for Kenyans.
In conclusion, the Parliamentary Committee on Trade, Industry, and Cooperatives is calling for urgent reforms to address the factors driving companies away from Kenya. By fostering a business-friendly environment and supporting local industries, the government can contribute to sustainable economic development and job creation in the country.
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