The Business Barometer 2025 report by the Kenya National Chamber of Commerce and Industry (KNCCI) serves as a stark reminder that excessive government involvement in economic growth is, in fact, slowing it down.
Successive regimes have maintained a culture of tight control over economic development, often overstepping their role. While the government is responsible for providing essential infrastructure such as roads and electricity, it appears to be taking an extra step—interfering with the private sector rather than enabling it.
Many outdated policies remain in place, upheld by rigid bureaucracies that refuse to reconsider them. This kind of economic rigidity, where policies are treated as untouchable red lines, only hampers progress.
Instead of maintaining a black-or-white, all-or-nothing approach to economic governance, stakeholders must come together to develop a pragmatic blueprint—one that transcends political affiliations and remains intact regardless of which administration is in power.
Major economies like Singapore (despite its communist roots) and the United States have thrived by embracing pragmatism over ideological rigidity. Pragmatism means eliminating archaic business policies and reducing the burden of excessive taxation.
Kenya needs to take a similar approach—opening up the private sector to young and ambitious entrepreneurs who can drive economic growth.
Instead of stifling small businesses with heavy taxes from the outset, the government should relax taxation to allow these ventures to build financial resilience.
Over time, as more businesses flourish, the tax base will naturally expand, leading to increased revenue collection and, ultimately, poverty alleviation.
Regulating the private sector is necessary, but excessive control is counterproductive.
Attempting to micromanage every aspect of business operations through outdated regulations and steep tax demands benefits neither the state nor its citizens.In fact, it discourages promising businesses from scaling up due to fear of financial strain, leading many to deliberately remain small to evade the tax burden.
No, it is the time to scrutinize every policy, licensing requirement, and regulatory framework that may be silently suffocating the private sector.
If the current administration is keen on building a lasting legacy, it must recognize that true leadership lies not in overseeing every economic aspect but in enabling businesses—particularly SMEs and the agricultural sector—to thrive.
A government that insists on controlling every facet of the economy operates under the false assumption that it possesses all the knowledge necessary for economic success. This is a flawed perspective, as no single entity holds a monopoly on knowledge.
The success of the American economy is built on the backs of relentless and innovative entrepreneurs. Similarly, China’s rise as a global economic powerhouse can be attributed to the late President Deng Xiaoping’s implementation of free-market economic zones in the 1970s.
What began as small, experimental zones driven by market forces transformed China from a struggling agricultural nation into an economic titan, rivaling the United States and surpassing European economies.
Kenya must adopt the same level of pragmatism—implementing policies that work and discarding those that do not.
Economic growth should not be subject to the whims of every new administration and its shifting political manifestos.
Instead, a stable, business-friendly environment must be fostered—one that prioritizes long-term economic prosperity over short-term political gain.
