Governor of the Central Bank of Kenya (CBK) Kamau Thugge has indirectly confessed that the economy is in shambles as a result of President William Ruto’s insatiable demand for higher taxes.
Thugge stated in a new report by the Central Bank of Kenya (CBK) on the country’s economic stability that more foreign investors are fleeing the country.
CBK examined the trajectory of investors leaving the country from 2022 to the first half of 2023 in its September Kenya Financial Stability Report.
CBK highlighted investor activity at the Nairobi Securities Exchange (NSE) as evidence that foreigners were selling their shares more than they were buying them.
For example, in March 2023, close to Ksh15 billion in shares were sold in compared to Ksh5 billion in purchases.
However, the number of shares sold in June 2023 fell below Ksh5 billion, around the same amount of money invested by foreigners.
Foreign investors sold (outflow) shares worth Ksh63.2 billion in 2022, compared to Ksh38.8 billion in purchases (inflow) in 2022, resulting in a net outflow of Ksh 24.4 billion.
This trend was ascribed to the current difficult economic conditions caused by the pandemic and government actions such as tax increases.
On the other side, competition from imported goods was seen as a major impediment to local firms, particularly those in the manufacturing industry, making the sector undesirable for investment.
The shilling was also depreciating as a result of the exit. The dollar is currently worth Ksh149.