State moves to harmonise economic policies amid concerns

KNCCI CEO KK Mutai during the launch of the 2026 Annual Business Barometer Survey and Advocacy Strategy. [David Gichuru, Standard] A new policy document is in development as the government begins reviewing its previous economic strategies, aiming to overhaul and harmonise them. This review is driven by concerns that, despite the many policy documents intended to guide enterprises across the economy, most remain unused and ineffective. Stanely Koskei, director of Industries at the Ministry of Trade, Investments and Industry, says while some of the policies are being implemented, others do not speak to each other. Koskei's revelation comes as the business community is seeking policy changes in five thorny areas that are stunting their growth. They include access to finance, energy costs, taxes and licenses, skills development and productivity as well as pending bills. These five issues are featured in the latest Annual Business Barometer as published by the Kenya National Chamber of Commerce and Industry (KNCCI). The survey was launched on Tuesday where Koskei and his counterpart Justus Makau in charge of planning in the State Department for Planning under National Treasury & Economic Planning spoke of the plans the government has to improve the business environment. "As a ministry, we are reviewing the 2012 industrialisation policy. We have realised that we have so many policies in our country and most them are just sitting on the shelves. Some of them do not even speak to each other," said Koskei. He said the government is going to re-examine all those policies. "We want all those policies to speak to each other, have one unified policy that can take this country forward," he said. "We have started with the industrialisation policy as a department. We must do policies, and get it right from the onset." Koskei said that for sustainable and inclusive economic development, a strong collaboration between the government and the private sector is needed. He noted that the government is committed to addressing the challenges raised by businesses through evidence-based recommendations. Also, as the country's development blueprint Kenya Vision 2030 comes to a close, the government will be reaching out to businesses to seek views as it drafts another pathway. "The Kenya Vision 2030 comes to an end in the next four years. The government has started thinking of the next long-term plan, and the thinking is very clear and the process will be consultative," said Koskei. On his part, Makau, referenced the importance of a conducive policy environment especially to the critical role played by micro, small and medium enterprises (MSMEs). He said, despite the role MSMEs play in the economy, they still face a lot of structural constraints such as limited access to affordable credit, punitive collateral requirements, high interest rates, restrictive licensing framework, inadequate infrastructure, weak market linkages and low technical and managerial capacity. Makau said the government is looking to improve the business regulatory environment, enable access to finance and strengthen the cooperative movement to spur local production. "We are committed to using data from reports such as this one to refine policies, improve public investment management and strengthen private engagements," he said. Of the five priority policy areas listed in the KNCCI report, improvement in access to affordable finance is the major one at 58.3 per cent followed by push to reduce cost of energy standing at 47.8 per cent, while harmonisation of business taxes and licenses was at 47.7 per cent, as improvement of skills and development as well as clearing of pending bills stood at 37.8 per cent and 34.9 per cent, respectively. These views were gathered from 1,150 businesses that participated in the survey carried out between December 2025 and March 2026. A majority of respondents were micro enterprises at 67 per cent followed by small enterprises at 20.9 per cent, as medium and large were 8.7 per cent and 3.4 per cent, respectively. On access to credit, the businesses are advocating for engagement with the Central Bank of Kenya with hopes of reducing effective borrowing costs for MSMEs to below 12 per cent. "Push for disclosure of MSME loan rates by commercial banks will enable price competition in the SME lending market," reads the KNCCI survey. The survey shows access to finance as a challenge dropped to position two in the latest ranking. High taxation, represented by 46.4 per cent, is the major challenge in this year's ranking. "The survey period coincided with a major tax policy shift: The abolition of presumptive tax regime and its replacement with the turnover tax which applies to businesses with annual turnover between Sh500,000 and Sh25 million at a rate of three per cent on gross turnover," the survey says. KNCCI President Dr Erick Rutto said last year's survey, which showed access to finance as the major challenge, coincided with the high interest in the market then which ranged between 18 and 24 per cent. "Last year, the most pressing issue was access to finance. That has changed. Now we are at between 13 to 18 per cent. We have seen in our statistics the percentage dropping to 36 per cent," he said.

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