The Kenya National Chamber of Commerce and Industry (KNCCI) has launched its Q3 2024 Business Barometer Report. The report aims to shed light on businesses’ expectations for the third quarter of 2024, drawing insights from their experiences in the second quarter regarding financial performance and the broader business environment. This forward-looking report is designed to ensure that efforts to advance the economy remain proactive.
KNCCI President Dr. Eric Rutto emphasized that the report focuses on the reasons behind the differing expectations of various business enterprises. He noted a general optimism among businesses regarding the reduction of primary input costs compared to Q2, although he highlighted manufacturing as the least optimistic sector. “There is a need for increased efforts to support this struggling yet vital sector,” said Dr. Rutto.
A significant insight from the report is the resilience and adaptability of small and medium enterprises (SMEs). Similar to Q2, a majority of businesses surveyed are optimistic about revenue growth 71 percent and staff size increase 66 percent in Q3. Despite global economic challenges, SMEs have shown remarkable tenacity by pivoting, innovating, and finding new ways to thrive. “This spirit of resilience is a testament to the entrepreneurial spirit that is the backbone of our economy,” Dr. Rutto added.
Abubakar Hassan Abubakar, Principal Secretary of the State Department of Investment Promotion, committed to addressing business challenges head-on.
“As the State Department we emphasized the government’s dedication to working closely with KNCCI and other stakeholders to create a conducive environment for business growth. This includes streamlining regulatory processes, enhancing access to finance, and fostering an ecosystem that encourages innovation and competitiveness”, said PS Abubakar.
Moreover he identified unfavorable taxes and levies as a significant regulatory challenge, a sentiment echoed by Kiprono Kittony, Chairman of the Nairobi Securities Exchange. Kittony stressed the importance of the government paying pending bills to ensure commercial vibrancy in Kenya.
KNCCI CEO Patrick Nyangweso recognized the significant challenges and opportunities in the business community. “The report is an instrument that will be used to support and empower our members with the information they need to decide on resource allocation to improve the business landscape in Kenya,” Nyangweso stated.
The report reveals sector-specific insights, showing that the education and agriculture sectors are most optimistic about a drop in primary input costs, while the hospitality, tourism, and manufacturing sectors are less hopeful. Additionally, 69 percent of businesses are actively applying climate change mitigation and adaptation actions in their operations. The mining and energy sectors lead in these efforts, while the retail and wholesale sectors lag behind.
Despite the optimism, businesses expect to face challenges in Q3 similar to those in Q2, including limited financial resources 32 percent, unfavorable regulations 22 percent, supply chain instability 22 percent, high interest rates 31 percent, and limited access to credit 30 petcent.
The Q3 Business Barometer Survey engaged 1,011 businesses across various sectors, including both members and non-members of KNCCI, from both formal and informal sectors. Data collection was conducted through an online survey over two weeks and supplemented by physical interviews in Nairobi. This combination of methodologies enhanced the data collection efforts compared to the Q2 Barometer Survey, which only employed online surveys.
The KNCCI Business Barometer Report Q3/2024 serves as a crucial tool for understanding the current business climate and guiding future economic strategies in Kenya.