Over 11 per cent of German-based companies in Kenya have announced their intentions to reduce their workforce within the next twelve months, according to the latest report by the Delegation of German Industry and Commerce for Eastern Africa
The report titled AHK World Business Outlook sought to acquire valuable insights into the perception of over 4,300 German companies abroad, and in particular 120 here in Kenya, and also offer a glimpse into the present situation and future.
According to the report, 11 per cent of the companies plan to reduce staff within twelve months.
This is a slight improvement from the previous survey in October 2023 whereby 12.5 per cent considered reducing their workforce.
The report, however, depicted that investment plans among the German companies are expected to drop significantly - with only 18 per cent seeking to make further investments in Kenya.
This is down from the 25 per cent recorded in the previous survey.
57 per cent of the companies revealed that the company's projections will remain equal in the next year while ten per cent estimated a lack of investments.
Among the major risks associated with investing in Kenya, the exchange rate was mentioned as the highest at 72 per cent, followed by economic policy conditions at 57 per cent.
The German companies also pointed out financing conditions as a distinct barrier at 47 per cent followed by trade barriers and demand for local companies recording 36 per cent each.
The report also delved deep into challenges the German companies faced when diversifying their supply chains. Compliance with the country regulations was the most mentioned challenge at 57 per cent.
High business costs and finding suitable suppliers rounded up the top three list at 43 per cent and 39 per cent respectively.
In contrast, over 50 per cent of German companies expressed confidence that the business environment in the country would improve with only 3.5 per cent expecting the situation to worsen.
