Nipate
Forum => Kenya Discussion => Topic started by: RVtitem on August 31, 2017, 12:51:48 AM
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The high-end retail sector is feeling the pinch of tough economic times, with fashion retailer Deacons being the latest to scale down its operations.
The retailer is set to close down one of its logistics centres this month and merge its two warehouses to further save on costs.
The franchise behind Mr Price said it had shed some of its workforce and has had to close some of its stores due to subdued sales, which have forced it to restructure its business.
“The year has been a tough one and going forward, we need to appreciate in a much bigger way trade relationships with our customers,” said Deacons East Africa Chief Executive Muchiri Wahome in a recent interview.
The fashion retailer’s full-year results saw it post a net loss of Sh278 million last year compared to a Sh100.6 million profit in 2015.
https://www.standardmedia.co.ke/business/article/2001250181/going-gets-tough-for-top-end-stores-in-kenya
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Kenyans live on borrowed money. Reminds me of USA from 2003-2006. People lived large, then.......
But don't get me wrong, the country is progressing.
All these loans have to be repaid. If a Houston happens in Kenya, forget it..
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Not when Mitumba can get you higher quality clothes for cheap - albeit out of season. The issue is not middle-class. The issues is when or if to ban second-hand textiles here.
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Its clear private sector is struggling . One would be hard pressed to point a sector that's doing well, maybe betting and tenderprenuers doing state and parastatals . Deacons specifically over prise their products that they import from south Africa. In addition EPZ companies can now sell 40% locally which will put more pressure on deacons. Bottomline the private sector needs a JumpStart, maybe we look at Mwiraria script.
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HK,
You are looking for Mwiraria script on Angloleasing or the ill thought out stimulus? Kenya economy is being mismanaged by political neophytes ruto and uhuru. They running so many economic experiments that the economy cannot cope. They have socialized Unga, Unaffordable SGR and overly bloated executive, parliament and county governments. If and when Kenya hits a recession the whole economy will unravel. for now things will be better because short rains later this year will be more than excepted
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Mwiraria cut vat from 18% to 16%, by collecting more taxes via introduction of ETR which reduced local borrowing. Which sent interest rates tumbling and banks started lending and economy took off. I know that was low hanging fruit, now investment in infrastructure won't be enough to JumpStart the economy. It'd be nice if an Mp proposed a serious economic bill that would lower taxes while at the same time broadening the tax base. Real estate flat rate of 10% has proven that a lower tax rate can increase collection while at the same time giving the sector certainty which has led to more investment. Also we need to get the credit growth to about 15% and real capital goods investment to increase productivity.
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real estate flat rate of 10% has not has proven that a lower tax rate can increase collection while at the same time giving the sector certainty which has led to more investment
Reread your statement it is contradictory. Anyway do you have numbers to assert your claim that more landlords are paying taxes because of lowering of the rate?
Kenya needs to definitely do the things you mentioned and on top of it get the government half baked measures out of the way. GOK needs to resolve the political uncertainty and find a way uniting kenya
The cessation noise will rob Kenya a lot of time and resources or even cause a lot of sabotage.
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The 10% flat rate has increased collection https://www.google.com/amp/s/www.standardmedia.co.ke/mobile/amp/article/2000227586/kra-ropes-in-more-landlords-to-collect-sh5-2b-in-six-months . I know personally I am paying more cause its easier to comply.
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HK - 2017 being an election year - you' expect a wait -n- see attitude from private investment - definitely the economy is struggling but we have to wait this election out - to make judgement.
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HK - 2017 being an election year - you' expect a wait -n- see attitude from private investment - definitely the economy is struggling but we have to wait this election out - to make judgement.
That's correct. However the slowdown started the 3rd quarter of 2016, that would indicate a slowdown that's not necessarily related to elections. For example credit growth started slowing down long before capping of interest spread .
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Ever thought of a cut in size of govt???
It's tooo big...
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Ever thought of a cut in size of govt???
It's tooo big...
Wont happen. We are fighting for inclusivity and reduced unemployment, and the only way to achieve it the kenyan way is by creating many government jobs.
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HK - so credit squeeze started before 1) interest rate capping and 2) 2017 election jitters - i have also seen bad date from cement consumption - well maybe drought is to blame?
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Private sector slowdown is caused by state local borrowing, including M-Akiba. Combined with interest capping this has strangled credit market. I think Rotich & finance bureaucrats are really failing to advise GoK. Economic planning department seems to have been wrongly squeezed into Devolution. GoK should stick to China, Exim, sovereign bonds, etc - let the bankers innovate.
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Ever thought of a cut in size of govt???
It's tooo big...
Actually yes, we need to reduce not only the size but scope of government.
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HK - so credit squeeze started before 1) interest rate capping and 2) 2017 election jitters - i have also seen bad date from cement consumption - well maybe drought is to blame?
No can't be drought since 2016 there was no drought. I have a suspicion that if we looked at productivity number therein lies the problem.
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Private sector slowdown is caused by state local borrowing, including M-Akiba. Combined with interest capping this has strangled credit market. I think Rotich & finance bureaucrats are really failing to advise GoK. Economic planning department seems to have been wrongly squeezed into Devolution. GoK should stick to China, Exim, sovereign bonds, etc - let the bankers innovate.
Anyone with good credit record hasn't been affected by capping of interest spread. Also local borrowing I haven't seen data to indicate its crowding out the private sector. The elephant in the room is productivity figures.