Mr Mohamed Shidiye, a Garissa gubernatorial aspirant during a press conference. PHOTO/UGC.
By ABDULHAKIM SHERMAN
Many businesses in the country are closing down or posting losses because of lack of a conducive environment to do business, Garissa gubernatorial aspirant, Mr Mohamed Shidiye, has said.
Mr Shidiye said the country’s deteriorating business environment is leading to significant financial strain on enterprises, culminating in widespread closures and financial losses.
Mr Shidiye, a gubernatorial aspirant in Garissa County, said in the past six months, from January to June Kenyans imported 35,000-plus vehicles while during the same period in 2021, 2022 and 2023, they imported 100,000-plus vehicles.
The former envoy said the reduction in vehicle imports reflects a broader economic downturn, characterized by diminished economic activity, reduced employment opportunities, stagnant growth, and the erosion of wealth.
“That means our economy is shrinking, that it is shrinking by around 60 percent and once the economy start shrinking that means there is no employment, no growth, no wealth, many businesses will; collapse and more people will be sacked,” he said during a press conference.
Mr Shidiye said at the moment National Hospital Insurance Fund (NHIF) was contemplating retrenching more than 50 percent of its workforce as well as many other state corporations due to an under-performing economy.
The former envoy attributed the deteriorating business environment to high operational costs, including elevated expenses for electricity, taxes, and water.
These increased fixed and variable costs have rendered business operations untenable for many enterprises, leading to the closure of several factories and other businesses.
Former envoy, Mohamed Shidiye, and Garissa gubernatorial aspirant with Garissa Deputy Governor Abdi Dagane at a past event. PHOTO/UGC.
“Many businesses are closing because the fixed variable factors are very expensive. Electricity is expensive, taxes are high, water is expensive and running businesses is expensive,” he said.
The former envoy said, the prevailing economic environment had made difficult for companies to do business in the country resulting in many factories closing down.
“These businesses are closing down because it not tenable to do business here,” he said.
Mr Shidiye said running a business is attractive when companies are making profits, they are posting high margins, the turn-over is high and dividends are good.
“Look at all the big companies in the country today, they are making losses,” he noted.
He gave an example of a leading media company he said it had posted a loss for the first time in 50 years due to the bad business environment now prevalent in the country.
