Employers raise concern over rising cost of doing business

FKE executive director Jacqueline Mugo during the launch of the AI Xcelerate project in Nairobi, February 5, 2026. [Collins Oduor, Standard]

Federation of Kenya Employers (FKE) has raised concerns over the rising cost of doing business in the country. 

The employers also expressed concern about a proposal to give the Kenya Revenue Authority (KRA) expanded powers in the Finance Bill, 2026. 

The Bill proposes sweeping provisions designed to grant the taxman expanded powers to monitor transactions, override tax agreements and aggressively enforce collections. 

“The state of the business environment remains challenging to employers in Kenya. The cost of doing business is not only high but continues to rise partly because of the impact of global geopolitical conflicts like the conflicts in the Middle East, Ukraine and within Africa and partly because of Kenya’s own domestic policies and bureaucracy,” said FKE board in a statement read by Executive Director and CEO Jacqueline Mugo.

“On the impact of geopolitical conflicts, the responses to cushion Kenya against the adverse impact of the conflicts in the Middle East and geoeconomic decisions have not met expectations. The business community expected the State to approach these challenges with the same zeal and empathy employed during the Covid-19 pandemic.” 

The board spoke in Nairobi after FKE held its 67th national Annual General Meeting, where it also made leadership changes. 

The members elected Michael Macharia, CEO of the Kenya Association of Hotel Keepers and Caterers, to serve as the National President, Laurence Okelo, Managing Director of G4S, as the first National Vice President and Betty Korir, CEO of Credit Bank PLC, as the second National Vice President. 

Also, Suzanne Gachukia-Opembe, Academic Director of Riara Group of Schools, was elected as a new member to the FKE Management board. 

Macharia takes over from Dr Glida Odera, while Dr Rachel Monyoncho has retired from the board.

The employers also said the high fuel prices have far-reaching implications on both the cost of living and doing business. 

“This, coupled with the falling demand of goods and services, means that Kenya is staring at unprecedented economic challenges. We call upon the government to put in place supportive measures for businesses,” she said. 

Asked what measures they propose to the government to put in place, she said one of them is a need for the government to reduce statutory deductions from employees’ payroll, which also affects businesses. 

On KRA being given expanded powers under the Finance Bill, 2026, Mugo said they have perused what has been published by Parliament and have put together their memorandum, which will be presented to Parliament on Monday, May 25, 2026. 

“We cannot reveal the details of the memorandum, but we shall do so on Monday,” said Mugo when asked about the powers concerns. 

The employers also raised concern over what they called weakening tripartism and social dialogue. 

“The Labour movement is anchored on social dialogue and tripartism, which are essential for promoting harmonious industrial relations and socio-economic development,” said Mugo. 

“FKE is a recognised social partner under the tripartite structure that runs the labour sector. The others are COTU(K) and the Government, represented by the Ministry of Labour and Social Protection. FKE encourages the tripartite social partners to respect the role that we each play to maintain industrial harmony.”