Kenyan businesses are increasingly putting expansion plans on hold as rising global uncertainty and domestic economic pressures reshape corporate priorities over the next year.
A new survey by the Central Bank of Kenya (CBK) shows growing concern among chief executives over the impact of geopolitical tensions in the Middle East and their ripple effects on the local economy. According to the findings, 37 percent of CEOs said they are extremely concerned about the economic outlook, while another 25 percent described themselves as very concerned.
The caution comes as the National Treasury revised Kenya’s 2026 economic growth forecast downward to 5.3 percent, with some budget projections placing growth closer to 5 percent. Businesses cite shrinking profit margins, reduced consumer spending and increasing operational costs as key reasons behind the slowdown in expansion plans.
Among the biggest concerns are rising fuel prices and shipping disruptions that continue to increase import and production expenses. Delays across major global trade routes have also complicated access to raw materials, creating uncertainty for manufacturers and exporters.
Consumer demand has also weakened as inflationary pressure reduces household purchasing power, limiting spending across several sectors. At the same time, firms report difficulty accessing financing despite modest easing in monetary conditions, with lending rates and collateral requirements remaining restrictive.
The impact is particularly visible in sectors linked to international trade. Exporters fear losses in Gulf markets, while agricultural products such as tea, flowers and meat face logistical bottlenecks. Delays in critical imports, including fertilizers, have added pressure to supply chains.
As a result, more than 1,000 firms are reportedly operating below full capacity, choosing to preserve cash and maintain lean inventories rather than commit to major expansion.
Source Attributed: Nation Newspaper