German firms root for stability

German companies hope for a peaceful election that will not destabilise business. [iStockphoto]

The German business community in Kenya is confident about the current trading environment.

In the AHK World Business Outlook for Kenya survey, a bi-annual poll that involved the German Business Community of Kenya, 40 per cent of the respondents assessed their current situation to be good, with 56 per cent terming it satisfactory.

Fifty-six per cent expect their business development activities to remain constant in the coming 12 months while 33 per cent think they will be better.

This is as the General Elections cause uncertainty among business people, with the businesses seeking “operational stability,” according to Delegate of German Industry for Eastern Africa Maren Diale-Schellschmidt.

However, the businesses cite economic policy framework, energy prices, commodity prices, trade barriers and currency exchange rates as the five key risks in the economic development of firms belonging to the German business community.

“The short-term expected economic consequences of the Russian invasion of Ukraine are mainly higher costs of energy, commodities and intermediate expenditure (89 per cent),” said the study report.

The top three predictions of long-term changes in the international division of labour are the changed risk assessment of sites at 52 per cent, increase in political influence on supply chains at 40 per cent and restrictions on termination of business relations in certain regions at 36 per cent, the study.

The German companies said they hope for a peaceful election that will not destabilise business. “With the looming election, German companies are hoping that peace, stability and a smooth transition are maintained as they are imperative for the local economy to fully recover from the shocks witnessed during the Covid-19 pandemic, and for the further development of Kenya as a hub for FDI (foreign direct investment) from Germany,” said German Deputy Ambassador to Kenya Thomas Wimmer.

“The disruption of the supply chain and logistical hardship was expected by slightly more than a third (41 per cent) of the respondents.”