Kenya’s business leaders have expressed optimism about growth across several key sectors over the next 12 months but are cautious about employment prospects, with staffing levels expected to remain largely unchanged.
The insights published in the Central Bank of Kenya’s Chief Executive Officers (CEOs) Survey for July 2025, which interviewed more than 1,000 CEOs drawn from sectors such as manufacturing, agriculture, financial services, ICT, tourism, healthcare, and retail.
According to the survey, the number of full-time employees remained largely unchanged across sectors when comparing business activity in the second quarter of 2025 to the first.
Looking ahead, the outlook is expected to be similar, with the survey noting that the number of full-time employees is expected to remain largely unchanged in the third quarter.
The CEO's in the agriculture sector expect enhanced performance, supported by improved rainfall and the availability of alternative markets for their produce. However, they flagged that high production costs and limited financing remain major challenges.
In financial services, CEOs anticipate higher growth prospects driven by increasing demand for financial services, targeted marketing, increased automation and innovation, risk-based lending, and customer centricity.
They cautioned, however, about growing non-performing loans, regulatory uncertainty arising from new proposed regulations, and increasing competition from digital platforms.
Tourism and hospitality also reported improved prospects, supported by increased foreign and domestic tourism, increased investment in tourism infrastructure, and marketing. Some firms, however, expressed concern over lower conference bookings from Non-Governmental Organisations following the U.S policy on donor fund cuts.
The ICT and telecommunications sector is seen as another bright spot, with growth expected to be supported by strategic partnerships aimed at enhancing performance and expansion. Professional services are similarly optimistic, with CEOs saying the sector will continue to expand, supported by customer centricity and new growth opportunities.
By contrast, the manufacturing sector continues to struggle. CEOs reported liquidity constraints, muted consumer demand, and elevated cost of doing business. Wholesale and retail trade also face headwinds due to lower consumer purchasing power, taxes, and levies.
The healthcare and pharmaceuticals sector was highlighted as facing liquidity challenges arising from pending bills and donor fund cuts, which CEOs said are undermining growth.
Employment
However, the survey pointed to a disconnect between growth and employment. Firms may be expanding output and markets, but they are not significantly adding to their workforce in the short term, reflecting caution at a time when there are already economic pressures and operational costs, according to the survey.
The July 2025 survey concludes that Kenya’s economy is poised for sectoral expansion but warns that without tackling structural issues such as high taxation, reduced consumer demand, and financing constraints, this growth may not translate into new jobs.
Recommendations
The CEOs want the government to continuously invest in reliable infrastructure such as energy, roads, water, and high-speed internet, which are essential for promoting economic activity.
Additionally, among other recommendations, they want the government to prioritize local manufacturers in public tenders and promote the Buy Kenya Build Kenya policies with more transparency.
