Kenya’s top business leaders have a message for President William Ruto: stop excessive borrowing, stabilise the tax regime and create a business-friendly environment before more companies’ collapse.

A new survey by the Central Bank of Kenya (CBK) reveals growing concerns among CEOs over high taxation, rising business costs and dwindling consumer demand —threats that could derail economic recovery. The chief executives are calling for immediate policy shifts, including liberalising air transport to boost tourism and easing regulatory uncertainty to attract investors.

“We need predictable policies and a stable tax environment to encourage investment and long-term growth,” one CEO is quoted in the CBK Chief Executive Officers Survey.

“If Kenya allows more airlines, flights, and routes, we will see a significant boost in tourism, business travel, and overall economic activity,” another noted.

The CEOs also criticised abrupt tax and regulatory changes, which they said discourage investors and raise operating costs.

“Implement policies that promote lending to businesses. Firms are struggling to access credit despite declining interest rates,” the report states.

The concerns come as the opposition and other stakeholders criticise the government’s handling of economic policies, governance and corruption.

Business Registration Service (BRS) notes that 9,441 registered companies have shut down in Kenya over the past five years due to economic hardships. At the same time, 2,030 firms were struck off in the 2022/2023 financial year, while 2,021 were deregistered the previous year.

“Most of the companies voluntarily applied to be struck off after ceasing operations,” BRS Director General Kenneth Gathuma said last year.

According to the latest CBK survey, firms have invested in research and development, restructuring, increased marketing, skills development, lobbying, digital transformation, and diversification into new markets.

The survey, which targeted CEOs from over 1,000 private sector firms, included respondents from manufacturing (16 per cent), agriculture (13 per cent), tourism and hospitality (13 per cent), financial services (13 per cent), professional services (12 per cent), ICT and telecommunications (seven per cent), transport and storage (six per cent), healthcare and pharmaceuticals (six per cent), wholesale and retail trade (five per cent), education (five per cent), and mining and energy (two per cent). Other sectors accounted for the remaining two per cent.

It includes input from organisations such as the Kenya Association of Manufacturers, the Kenya National Chamber of Commerce and Industry, and the Kenya Private Sector Alliance.

The report urges the government to capitalise on Kenya’s strengths, aggressively market the country and creates a positive investment climate. It also calls for streamlining operations at ports and entry points to enhance efficiency.

“Unfavorable policies, including multiple levies, taxes, and increased park fees for both local and international tourists, continue to hurt the tourism sector,” the report states.

While manufacturing is expected to improve due to stable energy prices and exchange rate, high operational costs, imports competition and weak demand will persist.

CEOs also want Ruto to address persistent capacity limits on air freight services for agricultural exports. They identified customer-centric strategies, talent management, market expansion and technological innovations as key growth drivers for the next year.

“The cost of doing business, taxation, and weak consumer demand remain major constraints on firms’ growth,” the report noted.

Despite the challenges, businesses remain optimistic, citing favourable weather and macroeconomic stability. 

“Sales and purchase prices remain high, reflecting price stickiness and the overall cost of doing business,” CBK noted, adding that agricultural input costs surged during the short rains planting season.

“Firms report improved global growth prospects over the next year, supported by declining interest rates and lower inflation in major economies. However, concerns remain over geopolitical tensions and expected U.S. policy shifts,” CBK said.

Regarding revenue, 52 percent of firms had a turnover of over Ksh 1 billion in 2024, while 16 percent had a turnover between Ksh 250 million and Ksh 1 billion. Meanwhile, 29 percent had a turnover of less than Ksh 250 million.

In terms of employment, 37 percent of firms had fewer than 100 employees, 45 percent had between 100 and 1,000 employees, and 17 percent had more than 1,000 employees.

The survey assessed CEOs’ confidence in their firms’ growth prospects, sector performance, and the broader Kenyan and global economies over the next year. It also examined business activity trends in the fourth quarter of 2024 and expectations for early 2025 economic performance.

Additionally, it explored factors likely to impact business expansion in 2025 and strategic solutions for medium-term constraints (2025–2027), providing valuable insights into Kenya’s economic outlook.