A new report by the Kenya National Chamber of Commerce and Industry (KNCCI) has revealed a concerning trend for job seekers in the country.
According to the 2025 Business Barometer report, 60% of businesses in Kenya are not planning to hire new employees this year, signaling tough times ahead for thousands of unemployed citizens.
The report, which was launched on Tuesday, February 4, at Serena Hotel in Nairobi, indicates that eight key sectors in the economy are set to slow down on recruitment.
These sectors include retail and wholesale, professional services, hospitality and tourism, manufacturing and processing, transport, financial services, and mining.
Why Businesses Are Stopping Hiring
The report highlights poor macroeconomic conditions, high taxation, and unfavorable government policies as the main reasons why businesses are reluctant to expand their workforce in 2025.
Many companies are struggling with increased operational costs, making it difficult for them to accommodate new employees.
“High taxes, restrictive government policies, and limited access to capital will be major obstacles to the growth of Kenya’s private sector in 2025,” the report states.
Sectors Still Looking to Hire
While the overall employment outlook seems bleak, some industries are still planning to bring in new workers. The education, healthcare, and Information and Communication Technology (ICT) sectors have expressed optimism about expanding their workforce in 2025, offering a glimmer of hope for job seekers.
Rising Youth Unemployment in Kenya
Meanwhile, a separate report from the Kenya Federation of Employers (KFE) paints an even grimmer picture of youth unemployment in the country. The 2025 Youth Employment Report states that Kenya’s overall unemployment rate stands at 12.7%, with young people between 15 and 34 years old making up a staggering 67% of the unemployed population.
The report also notes that over one million young people enter the job market every year without any formal skills, as many have either dropped out of school or completed their education without enrolling in vocational training or college programs.
Speaking at a recent press conference, KFE Chief Executive Officer Jacqueline Mugo warned that failing to address youth unemployment could lead to unrest, discouraging investment and slowing down economic growth.
“This is a challenge that the continent must tackle urgently to prevent instability, attract investors, and create wealth and employment opportunities,” she stated.
Government’s Efforts to Address Unemployment
President William Ruto has previously acknowledged the country’s unemployment crisis and emphasized the government’s commitment to creating job opportunities.
In May 2024, while speaking in Murang’a County, he highlighted the construction of affordable housing and the establishment of ICT hubs as key initiatives aimed at employing more young people.
Businesses Expecting Slight Revenue Growth
Despite the hiring freeze in several sectors, KNCCI’s report also notes that many businesses in Kenya are expecting marginal revenue growth in 2025. This growth is mainly attributed to an expanding customer base and improved marketing strategies.
Businesses Failing to Address Climate Change
The report further reveals that many businesses in Kenya are not implementing climate change mitigation and adaptation measures.
Key environmental practices such as proper waste management and tree planting have not been prioritized by a large number of companies, raising concerns about sustainability in the country’s business sector.
As businesses struggle with economic uncertainty, the job market remains unpredictable. With most industries slowing down on hiring, young people may need to explore alternative opportunities such as digital skills training and entrepreneurship to secure employment in the coming years.
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