NAIROBI, Kenya, Feb 11– High taxation, unfavourable government policies, and limited access to capital are set to significantly challenge the growth of Kenya’s private sector in 2025, according to the latest Kenya National Chamber of Commerce and Industry (KNCCI) Business Barometer Report.

The report, which surveyed businesses across various sectors, identified high taxes and unfavourable government policies as the biggest concerns for business performance, with 29.0% of respondents highlighting them as primary impediments.

Limited access to finance and financial constraints followed closely, with 23.4% citing difficulties in securing capital as a major barrier to growth.

Other notable challenges include market challenges such as competition, lack of customers, and low purchasing power (16.1%); supply chain instability (12.1%); and staffing and labour constraints (8.1%).

Climate change and natural calamities were flagged by 6.5% of businesses, while insecurity (3.2%) and other concerns (1.6%) were also recorded.

“Climate Change/Natural Calamities Staffing and labour constraints Supply chain instability Market Challenges (Competition, Lack of Customers, Low Purchasing Power) Limited access to finance/financial constraints High Taxes/Unfavourable Government Policies,”

Likewise, the report outlined areas where businesses require support to navigate these barriers.

Access to financial support and capital emerged as the most pressing need, with 32.9% of businesses calling for improved financing options.

A more favourable regulatory environment and improved government policies were also highlighted by 24.5% of respondents.

Additionally, businesses expressed a need for enhanced market access and exposure to new markets (14.0%), technological support and innovation (10.5%), and training and capacity building (9.1%).

Infrastructure improvements, including transport, logistics, and energy, were identified as a priority by 5.6% of respondents, while 3.5% cited other factors.

With taxation and regulatory policies being a major concern, business leaders and industry stakeholders have urged the government to implement tax reforms and create a more business-friendly regulatory framework.

The report underscored the need for strategic interventions to ensure the continued growth of Kenya’s private sector.