LETTERS: State must work harder to boost investor confidence

Recently, the US State Department labelled corruption as the thorn in the flesh that is hampering increased investor confidence. For most Kenyans, this is a case of the ordinary, but corruption and other key misgivings are hampering the progressive investor confidence.

For example, last month, the government made true to its threats of cracking down on gambling firms by ordering the shutting down of their mobile money short-codes. As if that was not enough, Interior Secretary Fred Matiang'i signed immediate deportation orders for 17 gambling sector executives for alleged breach of their local work permits.

This sparked a lot of anger and outrage among betting companies in Kenya who ended up filing the challenge in court. No sooner had the atmosphere cooled down than the Central Bank of Kenya weighed in on the issue and notified banks to stop providing banking services to the betting firms that have failed to comply with State regulations.

I think that for a country that has been on a charm offensive to look for investors in various industries, its treatment of the betting industry players leaves a lot to be desired.

The move by the government to punish the betting companies as the sole contributors to the betting craze is ill-advised. Cracking the whip on foreign investors will only reduce avenues of tax collection that the government direly needs. Additionally, many sports ventures supported by the betting firms may leave many in limbo if the sponsorship is withdrawn.

The move will go a great deal in hampering investor confidence in a nation that has made remarkable strides in the ease of doing business ranking published by the World Bank.

After it gained 16 places in the 2017 report, and 12 places in the 2018 report, Kenya gained a further 19 places in 2019, reaching the rank 61st out of 190 countries. If the government is to successfully drive out the betting investors, thousands of employees will lose their jobs and local betting shop owners will lose their ventures.

“Kenya has a positive investment climate that has made it attractive to international firms seeking a location for regional or pan-African operations,” the US State Department report indicates.

However, the poor handling by the government may have been targeted towards betting investors but this has a ripple effect among all cross-sector investors wishing to bet their money in Kenya.

With Kenya being one of the largest recipients of Foreign Direct Investments (FDI) in Africa with an estimated $1.6 billion in 2018, the government should tread carefully concerning how it treats its foreign investors.

Kenya plays a pivotal role in the East African Community, acting as a regional economic hub. Some of the factors that have promoted Kenya as a global investment destination is because of simplified procedures for business creation, a simplified process of property registration, strengthened access to credit and eased the process of paying taxes.

However, all these gains could be undone and the realization of key Sustainable Development Goals (SDGs), Vision 2030 and also the Big 4 agenda hampered by the use of unorthodox means in regulating the betting industry and more so foreign investors.

Anthony Kirathe, foreign investment advisor, East Africa Business Consultants, Nairobi.