Why firms are withholding salary increase

In the last two years, Kenya’s economy was beset by myriad misfortunes – high inflation that hit 9.6 per cent in October 2022, a devalued shilling that averaged Sh160 to the US dollar and increased taxes due to the Finance Act 2023.

The default reaction for businesses became layoffs and slowing down production to sail through this period. Then came 2024, and the economy came to a standstill as Gen Z-led protests dominated the end of the 2023-2024 financial year.