60% of Foreign Firms To Leave Kenya By January Next Year

Kenya now grapples with a painful reality: only 40% of foreign firms intend to reinvest by 2026, meaning a staggering 60% are scaling down or planning to leave. In a nation already battling economic fragility, this exodus could be catastrophic.

The human cost runs deep. With an estimated 20.76 million unemployed Kenyans by 2025, today’s flight of foreign investment risks pushing more citizens into joblessness—an unthinkable outcome for families clinging to hope .

Even the official rate seems to mask underlying struggles. World Bank data placed Kenya’s overall unemployment at 66% in 2023, yet only 10% of the workforce holds formal jobs—the rest are locked in precarious, informal work.

Youth bear the heaviest burden. Among 20–24-year-olds, unemployment stood at around 75%, while 14.7% were neither in school, work, nor training (NEET)—a dangerously large idle population.

Without foreign firms, the informal sector—now supporting 36.7 million people—will crumble, shrinking the few avenues Kenyans have to earn a living.

The root causes of investor flight are not mysterious: high electricity costs, unpredictable tax policies, and regulatory turbulence.

Kenyan businesses pay roughly KES 22.56 per kWh (USD 0.174)—about 113% of the global average and 151% of the African average—a crippling overhead for industrial operations.

Large-scale industries fare only slightly better: they might drop to KES 10–13 per kWh, but demand charges add financial strain on top of high base rates.

International comparisons reveal Kenya’s small commercial tariffs far exceed regional norms—another blow to competitiveness.

Meanwhile, Foreign Direct Investment (FDI) is tumbling. In 2024, FDI inflows plummeted to USD 335 million, down from USD 710 million in 2023, a 47% drop, with project numbers falling by 43%.

This is after years of slow improvement: FDI stock rose from KES 1.07 trillion in 2020 to KES 1.19 trillion in 2022, but inflows peaked earlier, and the growth has now reversed.

Kenya’s total FDI stock is roughly USD 11–12 billion, around 10% of GDP, far below its true potential.

Foreigners who remain do so in sectors like manufacturing, finance, ICT, and energy—but even these are now threatened by unfavorable costs and uncertainty.

The cumulative effect of 60% of firms preparing to leave isn’t just a business crisis—it’s a social implosion. Jobs will vanish. Families will suffer. Schools, clinics, and neighborhoods will feel the collapse.

In a society where nearly 38% of people live on less than US$2.15 a day, any drop in opportunity pushes more citizens into extreme poverty.

This exodus also risks inflaming social unrest. The 2025 youth-led protests over rising costs and corruption—resulting in 65+ deaths and hundreds injured—were a warning of what happens when hope erodes.

Kenya once held promise—strategic location, youthful population, rising tech hubs like Konza Technopolis, and natural advantages in geothermal energy.

But poor governance, policy flip-flops, and punitive taxation are now suffocating that potential.

If this flight is not reversed, the cost will be generational. Unemployed youth become marginalized, dependencies on debt deepen, and Kenya’s role as East Africa’s economic hub fades.

To avert the disaster, urgent reforms are needed: cut energy costs, simplify and rationalize taxation, and guarantee policy stability.

Without urgent action, the tragedy of 60% of foreign firms leaving won’t just be a statistic—it will become Kenya’s painfully lived reality.

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