{"id":51474,"date":"2024-06-10T15:02:58","date_gmt":"2024-06-10T15:02:58","guid":{"rendered":"https:\/\/chezaspin.com\/blog\/index.php\/2024\/06\/10\/finance-bill-2024-dims-growth-prospects-for-most-kenyan-firms\/"},"modified":"2024-06-10T15:02:58","modified_gmt":"2024-06-10T15:02:58","slug":"finance-bill-2024-dims-growth-prospects-for-most-kenyan-firms","status":"publish","type":"post","link":"https:\/\/chezaspin.com\/blog\/finance-bill-2024-dims-growth-prospects-for-most-kenyan-firms\/","title":{"rendered":"Finance Bill 2024 dims growth prospects for most Kenyan firms"},"content":{"rendered":"
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More than a third of chief executives of companies operating in Kenya expect business activities to be subdued over the next twelve months should the Finance Bill 2024 be implemented as is.<\/strong><\/p>\n

According to the Chief Executive Officers\u2019 Survey conducted in May by the Central Bank of Kenya (CBK), 48pc of the respondents expect companies\u2019 growth prospects to remain the same from 28.6pc in March.<\/p>\n

This compared to 33.9pc who expect higher growth prospects over the next one year compared to 51.8pc who expressed similar sentiments in March this year.<\/p>\n

The respondents expressed concerns over the proposed fiscal measures in the Finance Bill 2024, whose implementation is expected to push further the cost of doing business and dampen activity, CBK stated.<\/p>\n

Growth prospects over the next 12 months (percent of respondents). SOURCE | CBK<\/p>\n

\u201cSustained business optimism for company, sector, Kenyan, and global growth, attributed to easing inflation, stable exchange rate and good weather prospects. However, this is likely to be tampered by subdued consumer demand, elevated cost of doing business and the impact of fiscal measures in the Finance Bill 2024,\u201d says the banking regulator.<\/p>\n

Similarly, 46.4pc of CEOs expect growth prospects in their respective sectors to remain the same while 45.1pc and 51.9pc expect no change in growth prospects for Kenya and global respectively. Only 30.4pc expect higher growth prospects in their respective sectors compared to 24.8pc and 30.6pc for Kenya and global.<\/p>\n

\u201cThe survey shows moderated growth prospects for the Kenyan economy, but easing inflation, stability of the Shilling, and good weather prospects are expected to continue to support growth. Optimism for global growth continues to improve, supported by easing global inflation and consequent expectations of lower interest rates, nevertheless concerns over geopolitical risks remain,\u201d CBK notes in the survey.<\/p>\n

Kenya\u2019s inflation rate has continued to ease in the last one year on account of better performance by the agriculture sector which was supported by good weather and subsidies.<\/p>\n

Year-on-year inflation rate has decline from a high of 8pc recorded in May last year to 5pc in May 2024.<\/p>\n

Annual Inflation Rate (%), April 2023 \u2013 April 2024. SOURCE | KNBS<\/p>\n

On the other hand, the local currency has continued to gain ground against the US dollar, from a low of Ksh 162 in January to Ksh 129 currently.<\/p>\n

Many firms in various sectors such as finance, ICT, agriculture and manufacturing have continued to voice their dissent over proposals expressed in the bill which is also expected to hurt employment, companies\u2019 competitiveness and lead to tax revenue losses as firms explore cost cutting measures to remain afloat.<\/p>\n

Among taxes proposed taxes include eco levy, a new environmental tax targeting manufacturers and importers of select products which the Kenya Association of Manufacturers (KAM) has opposed.<\/p>\n

The levy is meant to fund the establishment of waste management infrastructure, finance Kenya\u2019s sustainable waste management programme, and setting up material recovery facilities and electronics waste collection centres across 47 counties.<\/p>\n

\u201cAdditionally, the Eco Levy will be detrimental to Mwananchi, as it will increase prices for all plastic packaging materials, batteries, and hygiene products,\u201d said KAM during its submission to the National Assembly Committee on Finance and National Planning.<\/p>\n

Majority of CEOs at 46pc pointed out economic environment as a constraint to growth compared to 25pc who said taxation, 21pc cost of doing business, 6pc exchange rate and 1pc weather conditions.<\/p>\n

Domestics Factors Constraining Firms\u2019 Expansion (percent of
respondents). SOURCE | CBK<\/p>\n

Nonetheless, 25pc of CEOs expect to undertake cost and risk management measures to sustain growth compared to 14pc who will leverage technology and 12pc who will embark on diversification, increased sales and marketing and lobbying with relevant stakeholders.<\/p>\n<\/div>\n

The post Finance Bill 2024 dims growth prospects for most Kenyan firms<\/a> first appeared on KBC<\/a>.<\/p>","protected":false},"excerpt":{"rendered":"

More than a third of chief executives of companies operating in Kenya expect business activities to be subdued over the next twelve months should the Finance Bill 2024 be implemented as is. According to the Chief Executive Officers\u2019 Survey conducted in May by the Central Bank of Kenya (CBK), 48pc of the respondents expect companies\u2019 […]<\/p>\n","protected":false},"author":0,"featured_media":0,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"jetpack_post_was_ever_published":false,"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"footnotes":""},"categories":[1],"tags":[],"class_list":["post-51474","post","type-post","status-publish","format-standard","hentry","category-uncategorized","entry"],"jetpack_sharing_enabled":true,"jetpack_featured_media_url":"","jetpack-related-posts":[],"_links":{"self":[{"href":"https:\/\/chezaspin.com\/blog\/wp-json\/wp\/v2\/posts\/51474","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/chezaspin.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/chezaspin.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"replies":[{"embeddable":true,"href":"https:\/\/chezaspin.com\/blog\/wp-json\/wp\/v2\/comments?post=51474"}],"version-history":[{"count":0,"href":"https:\/\/chezaspin.com\/blog\/wp-json\/wp\/v2\/posts\/51474\/revisions"}],"wp:attachment":[{"href":"https:\/\/chezaspin.com\/blog\/wp-json\/wp\/v2\/media?parent=51474"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/chezaspin.com\/blog\/wp-json\/wp\/v2\/categories?post=51474"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/chezaspin.com\/blog\/wp-json\/wp\/v2\/tags?post=51474"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}