Business leaders warn of capital flight

Industrialists have called on the government to improve Kenya’s business environment by tackling corruption, improving the infrastructure and reducing taxes, Reuters news agency reported on Thursday. “We became a kind of spoilt boy and we took things for granted, whereas in fact Kenya is no longer a favoured destination for investment,” it quoted Suru Tanna, chairman of the Kenya Association of Manufacturers as saying. Tanna said that 50 companies were planning to move from Kenya to other countries within the Common Market for Eastern and Southern Africa (COMESA) to take advantage of lower input costs.

He cited duties on raw materials, bad roads, an ineffective and expensive telephone system, and the comparatively high cost of power as deterrents to foreign investors. Kenya’s economy, the most industrialized in East Africa, actually shrank last year as a result of drought and a collapsing infrastructure, Reuters reported. In the manufacturing sector, which accounts for 14 percent of the economy (in terms of Gross Domestic Product), 20,000 jobs were being lost annually, according to Tanna.