Kenyan companies are increasingly exposed to global trade risks, with nearly half of chief executives expecting tariffs to erode profitability over the next year, according to PwC’s Global CEO Survey Kenya perspective.
- •About 46% of Kenyan CEOs said they anticipate a decline in net profit margins in the next 12 months due to tariffs, while an equal share expect little to no change.
- •Tariffs ranked among the top threats facing Kenyan businesses, with exposure levels higher than those reported by peers across Africa and East Africa.
- •The concern reflects Kenya’s position as a leading exporter under the African Growth and Opportunity Act (AGOA) and its integration into global value chains.
The African Growth and Opportunity Act (AGOA), which was a structural pillar of Kenya–U.S. trade, effectively entered a period of disruption in late 2025 when it expired on September last year. Following this, Kenyan goods faced a reversion to standard U.S. import duties, including a baseline tariff of around 10% under President Donald Trump's broader reciprocal trade framework introduced earlier in 2025.
For exporters globally, the shift saw landed costs rose overnight, pricing power weakened, and U.S. buyers began reassessing sourcing decisions against lower-cost alternatives in Asia and Latin America. Although AGOA was later reinstated on a temporary basis in early 2026, the reprieve has done little to resolve underlying uncertainty.
According to the survey, sectors including professional services, information and communications technology (ICT), hospitality, financial services, and wholesale and retail are already experiencing pressure linked to tariff-related policy changes.
Despite Kenya’s status as a net importer, which can cushion against large-scale tariff conflicts, export-oriented industries remain exposed, particularly those reliant on preferential trade arrangements. The survey highlights textiles and apparel among sectors vulnerable to shifts in global trade terms, reinforcing the country’s dependence on external markets for key export revenues.
Executives reported rising operational costs, continued uncertainty, and potential supply chain disruptions tied to evolving trade dynamics. These pressures are feeding directly into corporate outlooks, with tariff impacts expected to weigh on both margins and broader business stability.
In response, businesses are beginning to adjust their trade strategies. The survey points to efforts to reconfigure supply chains, reduce dependence on single-country sourcing, and expand the localisation of inputs where feasible.
Africa's Internal Potential
At the same time, various local companies are increasingly turning toward regional markets, with Tanzania, Uganda and Rwanda emerging as the top investment destinations for Kenyan firms, aligning with a broader rise in intra-East African Community trade, which has more than doubled since 2016.
The survey also identifies deeper intra-African trade and faster implementation of the African Continental Free Trade Area (AfCFTA) as key to reducing reliance on external markets and improving resilience to unpredictable geopolitical shifts.
About 68% of Kenyan chief executives said they are optimistic about territorial economic growth over the next 12 months, up from 48% a year earlier, reflecting easing inflation, improved monetary conditions, and currency stability.
As global disruptions reshape industries, Kenyan firms are also expanding beyond traditional sector boundaries. About 62% of CEOs said they have entered new industries over the past five years. About 27% plan to expand into technology, 22% into health services, and 16% into sectors such as real estate, retail and industrial manufacturing.
While 32% of CEOs do not plan major acquisitions over the next three years, 54% expect to complete at least one, with some pursuing multiple deals. These transactions are primarily aimed at expanding market share, entering new geographies, and diversifying products.
