Thursday, May 31, 2018

EDITORIAL: EA growth survey worrying

The national treasury building. FILE PHOTO | NMG The national treasury building. FILE PHOTO | NMG 
EDITORIAL

Summary

    • The survey by audit firm KPMG found that business leaders do not see robust recovery prospects and therefore do not expect their businesses to expand by any margins that would require additional staff.
    • The underlying fact is that the Kenyan economy is still reeling from the effects of last year’s prolonged drought and the bruising political battle that characterised the election.
    • The import of this is that although the truce between the main political camps has restored some sense of calm, the ripple effects abound.
Findings that East Africa’s business leaders see little growth prospects in the coming three years should worry all top bureaucrats in charge of economic policy at the Treasury.
The survey by audit firm KPMG found that business leaders do not see robust recovery prospects and therefore do not expect their businesses to expand by any margins that would require additional staff.
The underlying fact is that the Kenyan economy is still reeling from the effects of last year’s prolonged drought and the bruising political battle that characterised the election. The import of this is that although the truce between the main political camps has restored some sense of calm, the ripple effects abound.
Structural and policy challenges, including the escalation of taxation in the past four years, the slowdown in agricultural productivity, the continued rise in the price of oil and most importantly, the wanton stealing of public funds are all working to suffocate growth prospects.
Which makes one wonder how these challenges, most of which arise from within government, continue to mount despite the quarterly meetings between the Presidency and the private sector. Businesses are basically the engine that runs any economy. When they grow, they pay more taxes and employ more people making it imperative that the State addresses their concerns. Nothing less will do.
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