CBK Survey Shows Half Of Kenyan Businesses Recorded Reduced Sales Attributed To Higher Taxes

• The chief executive officers (CEOs) market perceptions survey report of November 2023 indicated that 52.9% of companies across different sectors reported a decline in sales
• A mere 18.2% of CEOs indicated a rise in sales, whereas 43.3% mentioned raising their selling prices amid harsh economic times
• The CBK survey targeted CEOs of key private sector organisations, including members of the Kenya Association of Manufacturers (KAM)

TUKO.co.ke journalist Japhet Ruto brings over eight years of experience in financial, business, and technology reporting, offering deep insights into Kenyan and global economic trends.

A survey by the Central Bank of Kenya (CBK) has revealed that half of Kenyan businesses recorded reduced sales in the last three months.

What did CBK survey show?

The chief executive officers (CEOs) market perceptions survey report of November 2023 indicated that 52.9% of companies across different sectors reported a decline in sales and did not anticipate improved economic activity in the New Year.

According to the survey findings, a mere 18.2% of CEOs indicated a rise in sales, whereas 43.3% mentioned raising their selling prices in response to heightened expenditures on stocking.

The survey targeted CEOs of key private sector organisations, including members of the Kenya Association of Manufacturers (KAM), the Kenya National Chamber of Commerce and Industry (KNCCI) and the Kenya Private Sector Alliance (KEPSA).

"Majority of respondents reported lower business activity in 2023 Q4 compared to 2023 Q3 due to high input costs and reduced consumer demand. Nevertheless, increased business activity was reported for firms in tourism due to seasonal factors, with financial and professional services firms reporting increased demand for their services," the report stated.

Why CEOs plan job cuts

Another CBK survey revealed that a quarter of Kenyan CEOs plan to cut jobs before January 2024.

CBK interviewed over 1,000 CEOs in quarter three of 2023 through online questionnaires.

Of those surveyed, 26.3% expect to reduce their workforce, while 63.5% will not recruit new employees.

"Increased taxation, the business environment (cost of doing business), and the economic environment (high inflation and the weakening shilling) continue to be identified as domestic factors that could constrain firms’ growth in the near term," the survey stated.

Ashton Apparel (EPZ) Limited and Mombasa Apparel (EPZ) Limited in Changamwe announced that they will fire 7,850 employees amid harsh economic times.