Although the government is encouraging the manufacture of goods in the country, the move by the Minister of Commerce, Moses Kuria to launch cooking oil testing machines made in Indonesia at a time when President William Ruto is encouraging the manufacture of goods in the country raises many questions. This is one of the reasons why the policies of the Kenyan government appear to increase poverty among citizens while affecting their income and not attracting investors who are important for creating job opportunities and growing wealth.
Economists point to the tax policies of the Kenyan government as driving away investors reducing employment opportunities and plunging many into poverty. The cooking oil machine and the importation of oil itself from abroad is a threat to the companies that make the oil in the country that employ thousands of Kenyans.
This is happening when it is revealed that such a plant is sold for Sh185, 000, which is a very high price for an ordinary citizen. Such machines made in this country can be found even at a price between Sh30, 000 and Sh80, 000. The government has also opened the doors to importing sugar from abroad instead of strategies to revive local industries that are relied on by thousands of sugarcane farmers, especially in the West and Nyanza areas.
The situation is the same for coffee farmers whose government policies have made them get a lower price for the crop over the years. Nairobi’s coffee auction opened this week after being temporarily closed for the government to implement reforms in the sector. Businessmen who import goods from abroad, especially in China, have complained about the government’s policy of taxing each product, unlike in the past when they paid the tax on loads of goods together. This, along with the additional value-added tax and the cost of transporting products to markets has made them suffer losses and lay off workers.
“I had 12 employees but now I have only four left because the business has gone bad,” says a businessman who had been importing goods from China for five years.
He says many local and foreign investors are forced to lay off workers due to the government’s tax policies. Those policies force them to pay their employees various taxes and fees. The businessman, who asked that we not mention his name for fear of abuse, mentions the house tax that the government has introduced and the VAT on fuel prices. Foreign investors have been leaving Kenya blaming the government for failing to control inflation and a political environment that is not conducive to their business.
Government leaders including President William Ruto and his deputy Rigathi Gachagua have been going around the country talking about politics while facing the opposition which has been calling protests that are disrupting the investment environment. In addition, the investors mention the drop in the value of the Shilling, the high cost of running a business such as high electricity charges, and the high interest on loans as factors that prevent Kenyans who want to develop themselves in life.
“Many people who had loans have failed to pay them because income has decreased and businesses are not profitable, the property of many of them has been auctioned and left them poor,” says economist Ivy Wambui.
He says that although the government provides loans through the Hustler Fund, the amount given cannot eradicate poverty.
“Government programs such as the husler Fund and employment through affordable housing are not sustainable. Loans of Sh500 cannot make a person create a job opportunity like an investor who borrows Sh20 million to expand his company,” he said. “What is needed is an environment to attract private investors who we see leaving or avoiding Kenya because of the accumulation of taxes,” he says.
President William Ruto has been insisting that the purpose of the House Tax is to give Kenyan youth jobs.