The Central Bank of Kenya (CBK) interviewed Chief Executive Officers (CEOs) from 1,000 private firms on what the government should do to improve the economy.
The business leaders, in the survey conducted between July 3 and 14, noted that business optimism in the country was subdued and listed solutions to President William Ruto’s administration on the policies needed to turn around the economy.
The private sector has urged the State to concentrate on three key areas such as addressing the deprecation of the Kenyan shilling, revising interest rates offered by financial institutions, and reining on political noise in the country.
Weakening Kenyan Shilling
In the survey which is done to capture information on top firms’ perceptions, expectations, and issues of concern, the CEOs stated that the weakening Kenyan Shilling against the dollar and other world currencies had subdued business optimism in the country.
“Optimism regarding growth prospects for the Kenyan economy weakened with respondents citing the combined impact of the high cost of living and the weakening Shilling as growth constraining factors,” the CBK survey stated.
Giving their solution, the CEOs stated that a stable Kenya shilling could strengthen firms’ outlook in 2023.
Interest Rates
High interest rates offered by financial institutions were also pointed out as key factors hindering economic growth in the country.
The CEOs urged the CBK to continue formulating policies that create a stable macroeconomic environment and an enabling business environment for local and foreign firms operating in Kenya.
Political noise
The current political rhetoric from politicians from both the government and the opposition has impacted on businesses in the country.
According to the CEOs, the current political impasse is weighing down business activity.
The government has already initiated the process to end the political tension in the country by inviting the opposition for a dialogue process.
Economic Growth
Despite the slow economic growth in the country, there was reported increased business activity for firms in financial and ICT services, as well as the agriculture sector, with the latter benefiting from improved exports.
The CEOs though complained that increased taxes, especially on fuel, as well as the cost of food and other commodities, had reversed any gains from the improved business activity.
