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How The State Of Kenya Politics Is Affecting The state of the Economy

Cynthia Mungai by Cynthia Mungai
September 5, 2022
in Investments
Reading Time: 2 mins read
Economy

Economy [photo/Courtesy]

From last year to this year, Kenya has experienced several political climate changes that have affected the business community. The way a nation runs can significantly affect how that nation develops. Political issues have an impact on economic development by facilitating or impeding the development process.

Political forces may have a direct impact on the market, which may have an impact on an organization’s capacity to operate in that market. Political implications might reduce a market’s friendliness to business. The government has considerable control over corporations.

Taxation policies

A change in tax rates is one of the best illustrations of how a political environment may impact business. For a variety of reasons, the government may decide to raise or lower the tax on a particular industry or alter the percentage of taxes applied to all enterprises. Many businesses are expected to be immediately impacted by the ruling. Therefore, businesses should have a plan in place to deal with such circumstances right away. The daily operations of the government are supported by taxes. 

Political stability

Political instability can have a significant impact on businesses. Such circumstances will result in riots and looting, which will harm businesses. Businesses find it challenging to operate under such circumstances because they directly affect their everyday operations. Communal riots are one such instance where businesses suffer greatly.

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Foreign Trade Regulations

The implementation of complex tax regulations can hamper the expansion of various industries. Initiatives by the local government are made in a way that benefits neighbourhood businesses. This is something that companies entering a foreign market should bear in mind.

Corruption

Large firms with deep pockets and shady government ties may unfairly profit from unethical business activities. Due to the influx of illegal funds, some of these organizations frequently experience growth during election seasons. The organization’s managers are then compelled to do the candidate favors.

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