This archive report was first published on 7 December 2019.
Kenya's economy has been facing a downturn in the eyes of German investors, with a recent survey revealing a decline in business expectations.
Results from the Autumn 2019 World Business Outlook Survey conducted by the Delegation of German Industry and Commerce for Eastern Africa (AHK Eastern Africa) show that German companies are less optimistic about Kenya's growth prospects.
According to the survey, business expectations in the next twelve months dropped from 71 per cent to 62 per cent in the last six months. This decline is a cause for concern, as it may impact the country's economic growth.
Furthermore, the survey revealed that firms expecting an expansion of their employee base have fallen from 45 per cent to 38 per cent. However, 48 per cent of respondents expect to retain their current employee quota.
Despite the decline in business expectations, the German business community expects increased bilateral trade relations, which could create employment opportunities.
Some of the pressing risks to economic growth include declining demand for products and services (47% up from 41%), shortage of skilled labour (38.1% up from 25%), and lack of access to financing (38.1% up from 16%).
Thomas Wimmer, Head of Economic Affairs at the German Embassy, attributes the survey's findings to German companies' desire to remain active and scale operations in Kenya.
