CEOs seek key State interventions to boost economic growth in 2025
They want the government to implement policies that promote lending to businesses as firms are facing challenges accessing credit, despite the declining interest rates
Chief Executive Officers (CEOs) of companies in Kenya want the government to open skyways to allow more airlines, flights, and routes to promote tourism in order to boost economic growth in the next 12 months.
According to the CEOs Survey for January 2025 conducted by the Central Bank of Kenya, they also desire the streamlining of operations at all the country’s entry ports, as they are the tourists’ first points of contact with the country.
They also urged the government to implement policies that promote lending to businesses as firms are facing challenges accessing credit, despite the declining interest rates.
The CEOs also rooted for the creation of certainty around the taxation system in the country, as there are abrupt changes in the regulatory framework and tax structure; provide resolutions of the persistent capacity limit on airfreight services for agricultural exporters.
They advised the government to concentrate on strengthening the market and creation of a positive image to attract long-term investments.
According to the survey, the CEOs are more optimistic about the future growth of the economy in the next 12 months.
It shows that the outlook of favourable weather conditions, stability of the shilling, low interest rates, and low inflation will contribute to the optimism.
However, the CEOs reported the cost of doing business as a key concern, which may slow down the expected economic growth. The survey further discloses that in Q4 2024, the business activity improved remarkably compared to Q3 2024.
“Production volumes and sales are expected to be higher in Q1 2025 compared to Q4 2024, driven by improved prospects of economic outcomes,” the CEOs survey shows.
Customer centricity, talent management, and expansion into new markets are the key drivers of firms’ growth and expansion over the next 12 months. However, the cost of doing business, taxation, and reduced consumer demand could constrain firms’ growth.
More firms reported easing constraints on capacity to expand production, supported by availability of idle capacity, access to supplies, inventory build-up, and expectations of access to credit facilities due to declining interest rates.
The CEOs said there is a need to improve efficiency through innovations, strengthened product portfolio, and increased marketing of products were some of the identified internal factors that would strengthen the firms’ economic outlook.
In the medium term (next 3 years), firms are prioritizing diversification of operations, improving efficiency, and cost optimization to boost growth.
