Effect of Fiscal Policies On the Investment Performance of Food Processing Enterprises in Nairobi City County, Kenya
DOI:
https://doi.org/10.68715/ijpdas.v3.i2.a159Keywords:
Fiscal policies, Investment performance, Food processing enterprises, Nairobi City CountyAbstract
Purpose: This study examined the effect of fiscal policies on the investment performance of food processing enterprises in Nairobi City County, Kenya. Specifically, it assessed how tax incentives, levies and duties, government-backed credit facilities, and tax compliance requirements influence enterprise investment decisions, profitability, production capacity, market expansion, and employment growth.
Methodology: The study adopted a descriptive research design guided by Policy Implementation Theory. A census targeted 100 managers and supervisors of food processing enterprises in Starehe Sub-County. Data were collected using semi-structured questionnaires, yielding 88 valid responses. Descriptive statistics, Pearson correlation, and multiple regression were employed to analyse the data.
Findings: The findings revealed that fiscal policies positively and significantly influenced investment performance (β = 0.251, p = 0.002). Respondents reported moderately favourable perceptions of fiscal policies (mean = 3.42, SD = 0.812), with tax incentives receiving the highest rating (mean = 3.61). Government-backed credit recorded the lowest rating (mean = 3.12), indicating financing challenges. Investment performance was moderate (mean = 3.31, SD = 0.854), with output growth exceeding market expansion. The regression model was statistically significant, F(4, 83) = 21.34, p < 0.001, explaining 50.7% of performance variation. Regulatory complexity and compliance costs constrained investment benefits.
Conclusion: The study concluded that fiscal policies significantly enhance investment performance among food processing enterprises. However, limited credit accessibility, complex compliance procedures, and regulatory inefficiencies undermine their effectiveness. The study recommends predictable tax incentives, simplified compliance requirements, improved access to affordable credit, and strengthened inter-agency coordination to support sustainable enterprise investment.
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