The Kenya Association of Manufacturers (KAM) has urged the government not to implement inflation adjustment as it is will injure small businesses.
Through a statement on the association’s website, KAM Chief Executive Officer Anthony Mwangi says that the adjustment in the last few years has negatively affected its members’ business.
“We appeal to the government to halt the implementation of the inflation adjustment as it is not sustainable. Since 2018, the cumulative increase in annual inflation has risen to 26.56%. Therefore, SMEs, among other manufacturers, may not be able to survive if the yearly inflation adjustment rate continues to increase every year,” said Mwangi.
Mwangi added that the implementation was negating the government’s push to create jobs, reduce the cost of living and support MSMEs by depressing the cash flow.
“Implementing the tax increase goes against the Government’s intention to reduce the cost of living, support agriculture through agro-industry value chains, support the growth of SMEs and create jobs for Kenyans, especially the youth,” said Mwangi.
“The inflation adjustment shall also stifle small and medium enterprises (SMEs), who are the backbone of job creation and our economy at large – SMEs are one of the government’s key focus areas. The proposed adjustment shall stifle their growth due to reduced cash flow as they will be forced to absorb inflation adjustment to remain in business,” he said.
Mwangi further urged government agencies to create long-term economic policies instead of short-term ones, which have proven futile in the recent past.