Political doubts top concern for firms as worries over increased taxation decline

NAIROBI, Kenya, Jan 31 -Political uncertainties remain a major concern for many Chief Executive Officers (CEOs) even as worry over the business environment, increased taxation, and economic environment decline over time.

The Monetary Policy Committee (MPC) survey conducted among CEOs of 230 private sector firms, noted that 23 percent of the CEOs listed political uncertainties as a major concern, an increase from the 5 percent figure reported last year.

The poll done between January 3 and 14 2022, reported increased taxation and the Business environment at 6 and 17 percent, a drop from 15 and 24 percent reported in 2021.

“Firms continue to be concerned that business performance will be affected by increased political activity as investors adopt a ‘wait and see’ approach to investments. On the brighter side, most firms expect business activity to quickly pick up shortly after the conclusion of the elections,” the survey added.

Overall, business optimism remained high about the growth prospects of their companies and the Kenyan economy, mostly driven by the services sector.

The CEOs noted that risks posed by the COVID-19 pandemic have moderated as the pace of vaccination picks up noting that recovery of the Kenyan economy will be further supported by the recent announcement on reduced energy costs.

“Optimism for own company growth prospects and in the Kenyan economy was mainly due to improved consumer demand, lower inflation, and lifting of COVID-19 restrictions,” the survey added.