Pan African lender snubs Nairobi for the tax friendlier Uganda
Uganda through its president has brokered a deal with Africa Export Import Bank (Afreximbank) to locate its KSh 3B headquarters in Kampala.
This has not been the only instance. Tax experts have argued that the higher tax rates in Kenya have been turning away potential investors who have chosen to set camp in Kenya’s friendlier neighborhood.
The higher the tax rate, the more time people spend evading taxes and the less time they spend on the more productive activities.
Investors at the Nairobi Securities Exchange (NSE) say government policies have resulted in exit of foreign investors, leading to loss of the market capitalisation and fall of benchmark index.
Stakeholders told an investor relations conference in Nairobi in 2018 that there was no adequate engagement when the government introduced taxes such as capital gain tax and ‘Robin Hood’ tax.
The trickle down of investors leaving the country have seen massive loss of jobs in re-sizing and sometimes full closure of companies.
Of course, Kenya is fast losing to countries like Ethiopia which now has the fastest growing economy in East Africa and Rwanda which has been attracting investors in their droves.
The Kenyan situation has been made worse by rampant corruption, huge debts and the ever changing political landscape.
With the current trajectory, economic growth will continue to waddle, joblessness will continue to bite and the 2030 development goals will remain a far-fetched farce.