The Kenyan private sector recorded a historic negative growth in the month of November according to The Stanbic Bank Kenya Purchasing Managers' Index (PMI).
Released on Tuesday, the PMI indicated that this was the third consecutive month that private businesses in Kenya were crippling.
High taxation was indicated as one of the main reasons entrepreneurs were struggling to break even.
“The performance of Kenya's private sector started to decline in September, and the latest monthly reading is one of the weakest since the series began almost a decade ago,” the PMI indicated.
"Driving the downturn in operating conditions was another historic increase in business costs during November.”
Apart from high taxes, businesses further suffered due to currency depreciation and increased fuel charges.
According to the Central Bank of Kenya, the Shilling exchange rate against the Dollar hit 153 on Tuesday, November 5.
The weakening of the Shilling has seen Kenyan businesses incur high production costs as they use the Dollar as the medium of exchange in the importation of most raw materials.
Additionally, with many local industries depending on fossil fuels for operation, the increase in Diesel and Petrol prices has reduced profitability for many ventures.
Due to the record negative growth, the PMI noted that companies fired workers at the fastest rate since 2020.
Only 17 per cent of Chief Executive Officers (CEOs) in the private sector feel a sense of optimism going into the future.
The report further indicated that the business outlook until November 2024 remained quite weak as Kenya struggles to attain economic stability.
