According to the May 2025 CEO survey from the Central bank, business leaders across sectors in agriculture, finance, ICT and services anticipate improved prospects over the next 12 months. The declining bank lending rates, enhanced liquidity and favorable weather conditions have fostered optimism. Many firms are now investing in expansion, automation, and customer-focused strategies. Yet, this confidence is tempered by significant concerns.
The high cost of doing business remains a dominant issue, with CEOs across sectors consistently citing this as a primary obstacle, alongside declining consumer demand and uncertainty surrounding taxation. Kenya’s entrepreneurs demonstrate remarkable resilience, but they operate in an environment marked by unpredictability. Frequent tax changes and inconsistent policies foster caution rather than bold growth.
Even sectors with strong potential such as agriculture and manufacturing, face liquidity challenges. Access to credit remains uneven. While some businesses benefit from lower interest rates at 15.6 %many encounter banks reluctant to lend due to perceived risks. This is particularly acute in agriculture where, despite favorable rainfall and production potential financing constraints hinder progress.
The recent easing of the Central Bank Rate (CBR) from 10.00 % to 9.75% has marginally improved lending, Stringent collateral requirements, slow loan processing, and weak credit scores continue to exclude businesses critical to economic growth and job creation.
Consumer demand is another concern. With inflation eroding purchasing power and real incomes stagnating, Kenyans are spending less. Businesses are now wary of losing market share, hesitate to pass on rising input costs, sacrificing profit margins to remain competitive.
Despite these challenges, Kenya’s private sector remains dynamic. Companies are leveraging their strengths like product quality and brand trust. Their strategies focus on cost optimization, operational efficiency, and market diversification. However, these internal efforts cannot fully succeed in an unsupportive external environment.
The government must therefore align its actions with the private sector’s ambition. This requires implementing favorable business policies, tackling corruption. Prompt settlement of pending bills and improved access to affordable financing are urgent priorities that demand action, not prolonged discussion, bold and decisive action is therefore essential to translate the optimism into results.
Resilient but strained: Kenyan firms speak out in May 2025 CEO survey.
