A report conducted by the Central Bank of Kenya (CBK) after surveying 1,000 Chief Executive Officers (CEO) has revealed that the company heads are concerned with US president-elect Donald Trump’s presidency.
According to the CEOs, the change in leadership in the US might affect the economic relationship between the two countries putting their economic growth in jeopardy.
With the new leadership in the US, the CEOs are worried that the political, economic, military, and ideological differences may strain Kenya’s economic growth in 2025.
“Concerns around increased geopolitical tensions, expected change in policy by the new US administration, and an uptick in global food prices remain, ” the CEOs revealed in the report by CBK.
The Central Bank of Kenya
Photo
KO Associates
Additionally, the CEOs warned business owners in Kenya to expect a slower 2025 compared to the last quarter of 2024. In the report dated Tuesday, December 10, business owners are looking into lowered business activities in the 12 months of 2025 compared to Q4 2024.
The decrease in business activities is attributed to the cost of doing business, taxation, and reduced consumer demand.
“The balance of opinion shows expectations of lower business activity in 2025 Q1 compared to 2024 Q4 largely on account of seasonal factors,” read part of the report.
The CEOs reported moderated optimism in growth prospects for Kenya for the next 12 months largely on account of muted consumer demand, high cost of doing business, and taxation.
According to the report, the manufacturing sector and the wholesale and retail trade sectors will suffer the most in 2025.
The manufacturing sector will continue to be impacted by the high cost of doing business, taxation and statutory deductions, liquidity constraints from the elevated cost of borrowing and pending bills, subdued consumer demand, and reduced competitiveness.
Wholesale and retail trade prospects are undermined by subdued demand. ICT, Tourism, Education, Innovation and Health sectors prospects remain positive.
However, all hope is not lost as the report revealed that more companies reported higher optimism for global growth prospects in the next 12 months, supported by lower global inflation and interest rates cuts in major economies.
The CEOs are however delighted that more firms reported higher optimism for global growth prospects in the next 12 months, supported by lower global inflation and interest rate cuts in major economies.
To caution the country from adverse consequences, the CEOs have recommended incentives to businesses to support activity, fight corruption, provide training Fast-track settlement of pending bills, and support the manufacturing sector among more.
A section of Tom Mboya Street in Nairobi’s Central Business District.
NMG