Slash cost of doing business, CEOs urge government

Kenyan chief executives have urged President William Ruto's government to urgently reduce the cost of doing business, warning that high levies, compliance burdens and expensive credit are stifling expansion and holding back job creation, according to a newly published Central Bank of Kenya (CBK) survey.

The September 2026 CEOs Survey, which polled 600 private-sector firms between September 7 and 18, found that while business confidence improved modestly from July, executives remain deeply concerned about the operating environment and want decisive government intervention.

"Reduce the cost of doing business by lowering levies and license fees, compliance costs and production costs to improve competitiveness and preserve households' disposable income," respondents said in their recommendations.

Their report lists six priority interventions. CEOs called for expanded access to affordable credit through lower lending rates, simpler loan requirements and flexible repayment terms, particularly for small and medium-sized enterprises.

They also demanded predictable tax and regulatory policies, with adequate consultation and better coordination across government agencies before implementation, a thinly veiled criticism of recent policy rollouts by the Ruto government that businesses say were rushed.

"Simplify business licensing and regulatory processes by consolidating national and county permits, reducing bureaucracy and expediting import clearance," the survey said, reflecting long-standing complaints about duplicated county and national levies.

CEOs further urged the government to strengthen governance and the rule of law, combat corruption and reduce wasteful spending, and to promote long-term development plans that provide continuity beyond election cycles.

On infrastructure, respondents asked the state to "lower energy costs and improve power reliability, transport and digital infrastructure" while supporting local production, skills development and export access.

President Ruto, who will face Kenyans at the polls next August in his reelection bid, used his Mashujaa Day speech this week in Eldoret to  announce new measures aimed at easing some of these pressures.

They include pledges to review business licensing fees, expedite value-added tax refunds and expand a credit guarantee scheme for small enterprises. He also reiterated commitments to lower electricity tariffs for manufacturers and to digitise county permit applications.

However, the CEOs' demands in the CBK survey show the announcements fall short of what is needed.

The CEOs survey's conclusion identified the high cost of doing business, muted consumer demand, geopolitical tensions and elevated energy prices as the key risks to growth over the next 12 months.

Those energy concerns have been sharpened by the Energy and Petroleum Regulatory Authority (Epra), which recently hiked fuel prices, a move expected to have a multiplier effect across transport, manufacturing, agriculture and other sectors that rely heavily on petroleum products.

The survey showed 30 per cent of CEOs were extremely concerned about energy prices, with a further 32 per cent very concerned, making it one of the leading external threats to firm growth and expansion.

Despite a monetary easing cycle that has seen lending rates fall, access to credit remains a significant headache. In the third quarter of 2026, 26.7 per cent of respondents rated access to bank financing as difficult or very difficult, while 43.1 per cent described it as moderate and only 30.2 per cent found it easy or very easy.

The survey captured the tension at the heart of the credit market: "Most respondents reported lower lending interest rates. However, collateral requirements, lengthy approval processes and cautious lending continue to constrain credit access. 37.7 per cent of the respondents reported declines in interest rates on loans, supported by an accommodative monetary policy stance.”

“However, high collateral requirements, lengthy approval processes, documentation demands and borrowing costs constrained access, particularly for smaller businesses, while weak demand and cash-flow pressures limited their appetite for additional borrowing."

A further 15.1 per cent reported declines of up to 1.0 percentage point since August 2024, evidence that CBK's easing stance is transmitting through the banking system, albeit unevenly.

The collateral problem appears to be pushing firms away from banks altogether. Most CEOs said they finance operations from internally generated funds and retained profits. In September, 53 per cent of respondents cited own resources as their main funding source, up from 49.7 per cent in July, while reliance on bank loans fell to 28 per cent from 33.7 per cent. Private equity, new share issues and initial public offerings accounted for less than 10 per cent of financing combined.

Others relied on supplier credit, customer deposits and advance payments, short-term support from family and business associates, and grants from development partners. The survey noted that although lending rates had declined, concerns over credit affordability continued to influence some firms' preference for internally generated funds.

The CBK survey shows that 23 per cent of respondents identified  the business environment and cost of doing business, including delayed disbursements and input costs, as the leading domestic constraint on growth, followed by increased taxation at 20 per cent and regulatory issues at 18 per cent.

Businesses also flagged reduced consumer demand and supply chain disruptions. On the external front, 28 per cent of CEOs said they were extremely concerned about geopolitical tensions, with the Middle East conflict the most significant worry, while 26 per cent were extremely concerned about climate change.