Kenya’s economy may be on the mend, but two critical sectors-manufacturing and health-are buckling under financial strain, threatening to drag down the broader recovery, a new Central Bank of Kenya (CBK) survey of CEOs shows.
- •The survey paints a mixed picture, with agriculture, finance, ICT, and tourism set to expand on the back of favourable weather, falling interest rates, and a digital push, while manufacturers and health providers say they are stuck in survival mode.
- •The manufacturing sector is facing suffocating liquidity constraints, muted consumer demand, and spiraling operational costs.
- •CEOs cite soaring energy bills, taxes, and logistics charges as key pain points that are eroding competitiveness.
“Margins are razor-thin, and consumer demand simply isn’t strong enough to justify investment,” according to the post-MPC Chief Executive Officers (CEOs) Survey, warning that the sector risks stagnation unless costs ease.
In the health sector hospitals and health programmes are battling liquidity shortfalls, largely from delayed government payments and an overhang of pending bills. On top of this, global donor funding cuts, driven by shifting U.S. and international policy priorities, are creating deep financing gaps.
Private providers say demand for services remains strong but funding shortfalls are crippling operations, especially in rural and underserved areas.
“Unless liquidity eases and costs are contained, the very sectors that support jobs and human capital may remain stuck in crisis mode, even as the rest of the economy pushes ahead,” CBK says.
Agriculture is enjoying a rebound thanks to good rains and new export markets, while financial services expect stronger uptake of loans and digital products as interest rates ease. Tourism continues to recover on the back of foreign arrivals and infrastructure investment, although NGO-driven conference bookings remain subdued. ICT and professional services are also tipped to expand through innovation and partnerships.
According to the survey, internationally, growth prospects are improving with monetary easing and new trade agreements, but geopolitical tensions and tariff disputes under the new U.S. administration continue to inject uncertainty.
