inflation

Over 1,000 Chief Executive Officers  (CEOs) have called on the government to take urgent measures to reduce the cost of doing business, ease credit constraints, and improve liquidity in the private sector amid rising operational pressures in Kenya.

The firms, in findings captured in the Central Bank of Kenya (CBK) CEOs Survey for May 2026, want authorities to promote transparency and competition in credit pricing and expand access to affordable credit and alternative financing.

They also want the government to reduce the cost of doing business through infrastructure investment and by streamlining permits and related fees.

In addition, the CEOs are calling for prompt settlement of pending government payments to suppliers, as well as stronger governance, accountability, and efficiency in public institutions to improve service delivery and investor confidence.

The sentiments captured in the survey show that while firms remain cautiously optimistic about the next 12 months, they continue to grapple with high operational costs, weak demand, and tight credit conditions.

“Business environment (cost of doing business), economic environment, geopolitical tensions, macroeconomic volatility, and energy prices are the key domestic and external factors that could hinder growth,” the report notes.

The CEOs further warned that elevated inflation, rising fuel and energy costs, and global uncertainty are continuing to weigh on profitability and investment decisions across sectors.

At the same time, firms reported mixed performance in the second quarter of 2026, with many indicating slower growth in sales and demand compared to the first quarter, largely due to reduced consumer spending and delayed payments.

However, respondents expect business activity to remain stable in the third quarter, supported by seasonal demand, digital transformation, and relatively stable macroeconomic conditions.

“Most respondents expected the Kenyan economy to remain resilient in the next 12 months, despite the elevated global risks,” the survey states, citing agriculture, digital adoption, and stable financial conditions as key supporting factors.

The report shows that most firms are operating below or near full capacity, suggesting that businesses still have unused production potential but are constrained by weak demand.

Access to credit improved moderately following the easing of monetary policy, but CEOs noted that lending rates, collateral requirements, and documentation hurdles remain significant barriers to financing.

On external risks, firms identified geopolitical tensions, particularly in the Middle East, as a major driver of higher fuel costs, disrupted supply chains, and increased inflationary pressure on production.