Kenya’s Economic Recovery Begins to Deliver Jobs as Firms Plan Higher Hiring in 2026

Kenya’s improving economic outlook is beginning to translate into tangible opportunities for job seekers, with private sector firms planning to hire more workers in 2026 as growth momentum strengthens across key sectors.

According to the January 2026 Market Perceptions Survey and CEOs Survey released by the Central Bank of Kenya (CBK), businesses across banking and non-banking sectors expect employment growth this year to exceed 2025 levels, buoyed by macroeconomic stability, easing inflation and improved access to credit.

The surveys indicate that firms are positioning themselves for expansion as economic conditions stabilise after a period marked by high borrowing costs, currency volatility and weak consumer demand.

“Both bank and non-bank firms anticipate higher hiring in 2026 relative to 2025,” the CBK notes, signalling growing confidence that economic recovery is feeding through to labour demand.

Growth Drives Recruitment Plans

Companies surveyed said new hiring will primarily support business growth and expansion, while also addressing skills gaps created by rising workloads and evolving operational needs.

“New hires are expected to support planned business growth and expansion, as well as upskill and reskill the existing workforce to manage increased workloads,” the report states.

The banking sector, in particular, expects improved employment prospects as demand for credit picks up.

Respondents cited stronger appetite for loans to finance working capital and expansion projects, supported by lower lending rates and improved policy transmission under the Kenya Shilling Overnight Interbank Average (KESONIA) framework.

Non-bank firms also reported broad-based recruitment plans, with transport, tourism and services recording the highest proportions of firms with definite hiring intentions.

Manufacturing, agriculture and trade sectors showed strong probabilities of hiring, even where firms remained cautious about cost pressures.

Stable Economy Underpins Confidence

Executives attributed their optimism to Kenya’s improving macroeconomic fundamentals.

Inflation eased to 4.4 per cent in January 2026, while exchange rate stability has helped reduce input cost volatility and improve business planning.

The Central Bank’s decision to cut its benchmark lending rate to 8.75 per cent further strengthened confidence, with respondents expecting easier credit conditions to support investment and consumption.

CBK Governor Kamau Thugge has previously said that stabilising inflation and exchange rates are critical for restoring investor and business confidence, a view echoed in the survey findings.

“The outlook is supported by low inflation, exchange rate stability and an accommodative policy environment expected to boost lending and private sector activity,” the CBK report notes.

Agriculture and Services Lead Job Creation

Agriculture remains a key driver of employment prospects, with favourable weather forecasts and expanded farm acreage expected to lift output in 2026.

Respondents said improved agricultural performance would stimulate rural incomes, logistics activity and agro-processing, supporting jobs across value chains.

The services sector is also emerging as a strong contributor to employment growth. Professional services, financial services, hospitality and ICT were cited as areas benefiting from rising demand and digital market expansion.

Hotels reported improved forward bookings for January to April 2026 compared to the same period last year, driven by a shift towards business travel.

This trend is expected to support hiring in hospitality, transport and related services.

Risks Could Slow Hiring Pace

Despite the positive outlook, firms cautioned that employment growth could be moderated by persistent challenges.

Elevated operating costs and pressure on profit margins may lead some businesses to prioritise productivity improvements over rapid headcount expansion.

“The need to manage costs by improving productivity with the current workforce” was cited as a key risk to hiring expectations, alongside concerns over low business activity in some sectors.

Wholesale and retail trade continues to face subdued consumer demand, while the health sector is grappling with pending bills and transitional challenges linked to the new health insurance framework, which respondents said have slowed activity and constrained growth.

Fiscal consolidation by the government also remains a concern. Reduced public spending and delayed settlement of pending bills could strain cash flows for suppliers and contractors, affecting employment in sectors linked to public procurement.

Near-Term Outlook Remains Encouraging

Looking ahead to the February–April 2026 period, respondents expect moderate to strong economic activity, supported by easier credit access, rising private sector lending and stable macroeconomic conditions.

“Lower lending rates and improved transmission under the KESONIA framework are expected to stimulate private sector credit growth in 2026,” the CBK survey states.

To sustain momentum, business leaders emphasised the importance of predictable tax policies, faster clearance of pending bills and continued reforms in land, judicial and administrative systems.

Overall, the surveys suggest that Kenya’s economic recovery is beginning to deliver what matters most to households: jobs.

While risks remain, growing confidence among employers signals that improved growth conditions are increasingly translating into real employment opportunities for millions of Kenyans.

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