FKE Call for Government Action to Strengthen Economy and Spur Job Creation
The Federation of Kenya Employers (FKE), led by FKE National President Gilda Odera, has issued a detailed reflection on the state of the business environment, highlighting mixed outcomes of government initiatives and proposing urgent measures to ensure sustainable economic growth in 2025.
According to the statement,FKE recognises achievements and challenges,acknowledging positive reforms in health, housing, agriculture and manufacturing, while celebrating the full recovery of Kenya’s tourism and hotel sector following the successful implementation of a post-COVID-19 recovery plan.
However, Odera emphasized the need for visa-free entry for short-stay and transit travelers to boost the sector further.Conversely, challenges like rising costs, liquidity constraints, and a volatile tax regime have hindered businesses. These issues have led to closures, redundancies, and compliance difficulties with payroll regulations.
Employers urged the government to implement policies fostering economic stability, business growth and job creation.
Key Priorities for 2025 include Enhancing Fiscal Responsibility:FKE urged the government to prioritize efficiency, timely payment of bills, and prudent debt management in the 2025/26 budget. Eliminating bureaucratic overlaps and focusing resources on impactful programs were also emphasized.
Tax Reforms and Lower Costs:Employers advocated for a stable, predictable, and fair tax regime to ease financial burdens on businesses. They called for streamlined regulatory processes, reduced taxes on production, and a halt to introducing new taxes.
Formalizing Informal Enterprises: Strengthening SMEs through access to credit, skill frameworks and market opportunities was highlighted as a pathway to curb the shrinking private sector and encourage rural economic development.
Improving Labor Relations:Strengthening labor institutions and fostering social dialogue were identified as essential for industrial harmony. FKE called for gazettement of pending wage councils and adherence to negotiated agreements to restore trust and stability in vital sectors like healthcare and education.
Odera noted that some of the challenges in the agricultural sector.Focus on Agriculture Employers in the agriculture sector raised concerns over rising air freight costs, which have made Kenyan exports less competitive compared to countries like Ethiopia and Colombia.
New EU regulations have also increased inspection levels, causing delays and operational challenges.Key recommendations include leveraging Kenya Airways to lower freight costs, negotiating favorable trade terms through the Economic Partnership Agreement (EPA), and expediting VAT refunds to farmers.
Employers also urged enforcement of the rule of law to safeguard the tea industry in in order to minimise disruptions that threaten employment.
FKE has Call for Collaboration as it reaffirmed its commitment to working collaboratively with the government to address these challenges and capitalize on opportunities for national progress. Employers emphasized the urgency of proactive policies to enhance Kenya’s competitiveness and foster a robust, inclusive economy.
