Employment in the agriculture sector is expected to rise in the second quarter of 2025, while CEOs from other sectors do not have plans to hire in the same period, the latest CEO’s Survey by the Central Bank of Kenya shows.
Favourable long rains currently being experienced across the country are expected to lift activities in the agriculture sector leading to an increase in demand for labour.The demand for more employees is however, expected to remain largely unchanged as C-Suite executives adopt a wait-and-see approach.Respondents expressed concerns around cashflow challenges from elevated lending rates, pending bills resulting from delayed government payments and the unsecured 90 days trade credit-which has turned out to be risky due to slow business.
“The number of employees is expected to remain largely unchanged, except in the agriculture sector, where employee intake is expected to be higher, in line with increased activity in the sector during the quarter supported by favourable long rains. Nevertheless, overall activity is expected to be enhanced relative to the baseline,” notes Central Bank of Kenya in its latest CEOs survey.
Firms in the agriculture sector reported elevated input costs while the manufacturing sector is affected by the elevated cost of doing business and the subdued consumer demand.
The tourism sector continues to recover, supported by increased bookings by individuals and corporates, and improved travel confidence. The financial sector growth is largely supported by customer centric innovations and product diversification, though the growing non-performing loans portfolio is a threat to the sector performance.
CBK notes that growth in some sectors will remain moderate. The health sector performance is significantly impacted on by liquidity constraints resulting from pending bills and donor fund cuts, particularly from USAID. In addition, transitional challenges to the new health insurance program are pronounced. However, there are opportunities within the sector, for instance, some respondents reported the introduction of digital health programs for a wider reach.
“This accumulation [of pending bills] negatively impacts the liquidity of the private sector and the government’s procurement process. Notably, the accumulation will attract penalties and interest and create additional public costs in litigation fees. It is imperative that the payment of outstanding pending bills be prioritized before the commencement of new projects,” the Institute of Public Finance (IPF) Shadow Budget released this week reveals.