US President Donald Trump’s recent policies and tariffs are negatively impacting Kenya’s hospitality sector, with hotels reporting lower conference bookings from donor funded programs and Non-Governmental Organizations (NGOs).
- •61% of respondents to a survey of CEOs by the Central Bank of Kenya (CBK) said they were impacted by the recent US tariffs and other policy changes.
- •On January 24th, Trump issued a ‘stop work order’ for USAID, halting all foreign aid programs—except those for Israel, Egypt, and emergency food aid.
- •In April, Trump announced 10%-50% tariffs on imports from all countries, which has created uncertainty and disrupted trade.
“The hotel industry players for instance reported less business due to lower conference bookings, particularly by Non-Governmental Organisations (NGOs) and other donor funded programs,” the CBK says.
“Other firms expect to be impacted through higher cost of imports for inputs and finished goods, lower earnings from exports, particularly to the U.S once African Growth and Opportunity Act (AGOA) Agreement lapses, increased cost of production due to inflationary pressures emanating from higher costs of goods and services, lower consumer demand due to reduced disposable income resulting from lower profits and loss of incomes, second round effects on local businesses relying on clients that have been affected by the tariffs and policy changes.”
According to Kevin Ng’ang’a, Kenya Country Lead at Verto, many businesses were blindsided by the new tariffs, imposed well after budgets had been finalised and operations mapped out for the year. Most had already made forecasts based on certain cost structures, raw material prices, and labour expectations.
“At the moment, there’s still no clarity on whether these tariffs will increase, remain as they are, or whether Kenya might eventually be granted an exemption. Amidst this uncertainty, it’s all the more important for Kenyan businesses–and the broader economy to prepare for multiple outcomes,” he argues.
Apart from the hotel and travel sectors, other industries likely to feel the brunt include automotive parts, electronics, and raw materials like steel and aluminium—essentially anywhere where the U.S. is a key market. The freight sector will also experience a slowdown due to decreased export volume.
Other key insights from the Survey
- •43% of respondents employed less than 100 employees, 42% of the respondents had between 100 and 1000 employees, while 15% of respondents employed over 1000 people.
- •More respondents reported marginally lower bank loan rates in the May 2025 survey compared to the March 2025 survey.
- •Firms reported improved growth prospects for the Kenyan economy for the next 12 months supported by continued macroeconomic stability, favourable weather conditions and expectations of improved liquidity owing to declining bank lending rates.
- •Company growth prospects were higher, supported by company specific strategic actions to spur growth.
- •Sectoral growth prospects improved, driven by sector specific opportunities, but some sectors continue to report challenges.
