FKE advocacy expense rises to Sh215m as deficits accumulate

Executive Director and CEO of Federation of Kenya Employers Ms Jacqueline Mugo Photo credit: Billy Ogada | Nation Media Group

By  Edna Mwenda Business Reporter Nation Media Group

The Federation of Kenya Employers (FKE) spent Sh215.8 million in the year ended December 2023 on advocacy and event hosting in a year that saw it engage on multiple issues including opposing introduction of new taxes.

The organisations’ expenditure rose six percent from Sh203.2 million reported the year before. FKE's spending surpassed its revenue, leaving it in a loss (deficit).

The organisation's deficit increased 63.9 percent to Sh31.8 million from Sh19.4 million in the previous year.

Revenue generated through members' subscriptions also shrunk from Sh194.2 million to Sh177.3 million.

FKE's other income rose 79.1 per cent to Sh24.7 million in the review period from Sh13.83 million a year earlier.

FKE played a key role in championing a better working environment during the process of enacting the Finance Act 2023 that introduced, among others, the housing levy that is collected at a rate of 1.5 percent of an employee's earnings and matched by the employer.

The organisation warned that the expansion of taxes will hurt employees' welfare and place a huge burden on employers.

"Despite significant challenges faced such as the rising cost of doing business and an unpredictable regulatory environment, FKE strengthened its position as the powerful, balanced and trusted voice of employers," said Ms Jacqueline Mugo, FKE's executive director and chief executive officer.

Mr Habil Olaka, FKE's outgoing national president, noted the cost of doing business continues to rise, driven by government policies and an adverse macroeconomic environment.

"The high cost of capital continued to burden the private sector, driven by factors such as rising interest rates, inflation, market conditions and governmental policies," said Mr Olaka.

"Notably, the Central Bank of Kenya increased its benchmark rate to 13 per cent, the highest since August 2016, making credit unaffordable for many businesses and hampering growth."

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