Raila Odinga on Kenya’s Economy

Raila Odinga, former Prime Minister of Kenya, has attributed the recent exodus of foreign investors from the Nairobi Securities Exchange to rapid and unstable tax policies. According to Odinga, 6,256 foreign investors have fled the NSE in the last 9 months, representing 42% of all foreign investors in the country.

Odinga’s concerns are echoed by other experts, who have warned that Kenya’s unstable tax regime is deterring foreign investment and harming the country’s economy. In a recent report, the Kenya National Chamber of Commerce and Industry (KNCCI) noted that the government’s frequent tax changes are making it difficult for businesses to plan and invest.

The KNCCI report also found that the government’s tax policies are unfair to businesses, with many companies paying more in taxes than they make in profits. This has led to many businesses closing down or relocating to other countries with more favorable tax regimes.

The exodus of foreign investors from the NSE is a serious concern, as it is a sign that Kenya is becoming a less attractive destination for foreign investment. Foreign investment is essential for Kenya’s economic growth, as it creates jobs, boosts exports, and helps to transfer technology to the country.

The Kenyan government needs to take urgent steps to address the concerns of foreign investors and make Kenya a more attractive destination for foreign investment. This includes adopting a more stable and predictable tax regime, reducing the tax burden on businesses, and creating a more business-friendly environment.

Here are some specific recommendations for the Kenyan government:

• Establish a clear and predictable tax regime, with minimal changes made on a regular basis.
• Reduce the overall tax burden on businesses, particularly small and medium-sized enterprises (SMEs).
• Simplify the tax compliance process and make it easier for businesses to pay their taxes.
• Create a more business-friendly environment by reducing bureaucracy and corruption.

By taking these steps, the Kenyan government can help to stem the outflow of foreign investors and attract new investment, which will boost the country’s economy and create jobs.