Most Kenyan employers to freeze hiring in 2025 despite economic optimism – CBK survey

A majority of employers in Kenya will not be hiring more staff this year, a new study has shown.

The March 2025 Market Perceptions Survey by the Central Bank of Kenya (CBK) shows 38 per cent of surveyed non-bank players, CEOs, and senior executives across various private sectors are not willing to hire more staff in the year ahead.

This compares to 32 per cent who said they would hire to support business expansion, replace existing staff and attract new talent.

On the other hand, however, the survey report shows that banks are largely expected to hire more in the year under review.

This is mainly on the back of continued branch expansion and growth in the business launch of new products, and the need to replace existing staff.

The scepticism from non-bank players about hiring more during the year is attributed to rising operational costs, increased taxes and levies, and delayed government payments to the private sector.

Notably, the gloomy employment outlook is against the backdrop of recent reports of recovery in the country’s macroeconomic environment and declining inflation.

Respondents to the market perception survey, for instance, indicate that Kenya’s economic activity will improve in the next three months.

They expect moderate to strong and very strong activity during the period, largely supported by anticipated pick up in lending to the private sector due to low interest rates, favourable weather, end of financial year government expenditure and a generally stable macroeconomic environment.

“However, respondents were concerned about the geopolitical tensions in neighbouring countries, the effects of the global trade tensions due to the US hiked tariffs on imported goods and the unpredictable weather conditions,” CBK said.

The apex bank’s CEO survey, also conducted in the same month and targeting CEOs of over 1,000 private sector firms across the country, also indicates positive economic prospects for the year ahead.

Assessing the CEOs' optimism about the growth prospects for their companies, sectors, and both the Kenyan and global economies over the next 12 months, they exhibited sustained optimism for the Kenyan economy.

This, yet again, supported by favourable weather conditions, continued stability of the shilling, expectations of further decline in interest rates and low and stable inflation.

However, concerns remained around muted consumer demand due to lower disposable income for individuals and corporations, fiscal sustainability issues arising from high debt service, which strains government spending on development projects, and the elevated cost of doing business.

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