On 13^th April 2022, KEPSA CEO Ms. Carole Kariuki together with Dr. Bimal Kantaria – KEPSA Director and Chairperson of Agriculture Sector Network (ASNET) and Ms. Eva Warigia – Vice Chairperson of KEPSA Public Finance Sector Board held a meeting with the CEO of Flamingo Group International Mr. Giles Turell at KEPSA offices. Mr. Turell was accompanied by Mr. Richard Fox – Flamingo Horticulture Director and Chairperson of the Kenya Flower Council and Mr. Dennis Mwirigi – Director Flamingo Horticulture, at the KEPSA offices.

The objective of the meeting was to discuss KEPSA perspectives on upcoming elections, notable Budget Policy Statements of interest to the agribusiness industry, tax reforms, regulations and incentives for industry competitiveness.

Ms. Kariuki shared the impacts of the ongoing Russia-Ukraine war, global supply chain disruptions and geopolitical factors on the local agribusiness industry. Speaking on the election preparedness and transition management, the KEPSA CEO stated that KEPSA is continuously engaging with relevant security agencies to discuss security concerns and ecosystem mapping of election hotspots among other proactive measures as a bulwark against Post-Election Violence and business interruption. Notably, she reinforced the importance and value of the Mkenya Daima Campaign in inspiring all Kenyans towards peaceful elections and seamless transition.

In his remarks, Dr. Kantaria lauded the critical role played by Flamingo Horticulture and Elgon Kenya in the promotion of trade and bilateral relationship between Kenya and UK, evident through the Flowers of Hope Initiative. He noted that the initiative has gone a long way in enhancing trade and bilateral relationship. While giving the situational analysis of the local horticulture industry, Dr. Bimal noted the need to address the challenges of VAT refund delays, usage of sea freight and of inadequate air freight capacity that has consequently led to massive post-harvest losses (30%-40%). In light of the foregoing, he stated that ASNET has institutionalized Public-Private Dialogue (PPD) engagements with the Ministry and State Department Agencies (MDAs) to progressively resolve challenges in the horticulture industry.

Mr. Turell briefed the meeting on the Flamingo Group International business ventures and key investment portfolios in the Country. He noted that political instability, insecurity, high taxes and delayed payment of VAT refunds are some of the biggest challenges afflicting Foreign Direct Investment. To address the aforementioned challenges, he noted the need for KEPSA to deepen engagements with the Government on safeguarding the business environment from political vicissitudes, the need for rationalization of taxation regimes and amplified advocacy actions towards the creation of incentive frameworks to promote both the Foreign Domestic Investment (FDI) and Domestic Direct Investments (DDI).

Ms. Eva Warigia presented an overview of the country’s financial position with respect to recession, devaluation of the Kenyan shillings, foreign exchange reserve and economic extrapolations in the medium to the long haul. Specifically, she noted the significant impact the current national debt crisis has on the citizens and the resultant tax burden transferred to the private sector. In light of this, she noted that the Public Finance Sector Board has entrenched continuous dialogue forums with the National Treasury and KRA to develop pragmatic solutions that will enhance favourable taxation regimes.

In order to break the chain of causation leading to high taxation frameworks, Mr. Steve Okoth, a member of the KEPSA Finance Sector Board and seasoned tax expert, noted the need to address the underlying salient challenges such as the lack of an institutional framework on debt management, administration of taxation regimes that are not in tandem with the Country’s economic growth and aggressive implementation of compliance reviews.

Mr. Richard Fox stated the need to address concerns on business disruptions and security volatility concerns in several election hotbeds. In recognition of the preponderance of the agriculture sector to the economy, Mr. Dennis Mwirigi on the other hand noted the need to expeditiously implement the refund of VAT and pending bills owed to agribusinesses as well as the need to increase public expenditure on agriculture from the current 2% of the National Budget to the 10% threshold envisaged in the Comprehensive Africa Agriculture Development Programme (CAADP) Malabo blueprint.