Nairobi: The Kenya Private Sector Alliance (KEPSA), in collaboration with the Kenya Investment Authority (KenInvest), held a high-level roundtable to address critical challenges facing businesses in Kenya, focusing on creating an enabling environment for sustainable economic development. Speaking at the event held at Serena Hotel in Nairobi, the Principal Secretary (PS) for National Treasury Chris Kiptoo underscored the importance of a stable business environment in spurring job creation, boosting revenue, and ensuring economic resilience.
According to Kenya News Agency, Kiptoo reaffirmed the government’s plan to reduce the fiscal deficit from 8.3 percent in 2021 to a projected 4.5 percent in the 2025/26 financial year, citing enhanced tax compliance, the digitization of procurement systems, and targeted expenditure cuts as key strategies. Dr. Kiptoo highlighted Kenya’s steady economic rebound, noting that inflation had dropped from 9.6 percent in late 2022 to 2.7 percent, while the Kenyan Shilling had stabilized significantly against the US Dollar.
He attributed this progress to effective fiscal and monetary policies, including the successful Eurobond buyback earlier in the year. ‘These gains reflect a stabilizing economy that is regaining investor confidence,’ he said. Foreign exchange reserves stood at USD 9.7 billion by February 2025, equivalent to 4.9 months of import cover, while remittances grew by 14.5 percent to USD 4.96 billion.
Additionally, the PS said that the Nairobi Securities Exchange (NSE) Index rose by 29.2 percent in the year to March 2025, accompanied by a 16 percent increase in market capitalization, signaling improved investor sentiment. Kiptoo pointed out that Kenya’s average economic growth between 2022 and 2024 stood at 5.0 percent, well above the global average of 3.4 percent and Sub-Saharan Africa’s 3.8 percent.
Dr. Kiptoo acknowledged fiscal pressures due to the initial rejection of the Finance Bill 2024 and subsequent nationwide protests, which impacted revenue collection. By the end of March 2025, ordinary revenue was below target by Sh142.8 billion, with total revenues missing the mark by Sh161.9 billion. In response, the government launched a comprehensive e-procurement platform in April 2025 and announced plans to digitize public investment management and pension systems to enhance transparency and efficiency in public finance.
‘We are committed to restoring fiscal discipline and enhancing the efficiency of public financial management systems,’ he said. Dr. Kiptoo added that the reforms are designed to enhance transparency and curb wastage in public spending. He noted that the newly launched e-procurement system, set to be fully operational across all government ministries by July 1, was expected to cut procurement costs by up to 15 percent.
The government also plans to transition from cash accounting to accrual accounting to strengthen fiscal credibility. Meanwhile, KEPSA CEO Carole Kariuki lauded the government’s commitment to structural reforms. ‘We welcome the steps taken to digitize procurement and broaden the tax base, these measures are essential for improving the business environment,’ she said. In addition, Kariuki affirmed the private sector’s commitment to supporting government initiatives, noting that businesses are prepared to scale up investment and contribute to job creation as long as the operating environment continues to improve.
Making his remarks, Principal Secretary (PS) for Investment Promotion Abubakar Hassan emphasized the importance of regulatory and legislative reforms, including the Finance Act 2023 and the Business Laws (Amendment) Act 2024, in attracting and retaining investment. The roundtable concluded with a renewed commitment from both the public and private sectors to collaborate on policy, regulatory, and structural reforms that support long-term economic stability and growth.