More than 200 businesses in Kenya have shut down due to economic challenges, raising concerns about job losses and the overall stability of the country’s business environment.
The Registrar of Companies has confirmed that 134 businesses have applied for dissolution, with 64 already approved. Additionally, 70 firms have been removed from the company register, and another 90 are on notice for removal.
The government has issued a notice stating that companies listed for dissolution will be struck off unless an objection is raised within a set period.
The Companies Act mandates that businesses unable to justify their continued operations will cease to exist. High operational costs, heavy taxation, and limited access to credit have made it difficult for many businesses to stay afloat.
While some firms have reinstated their registrations, the number of businesses closing down remains significantly higher.Economic experts attribute the closures to multiple financial burdens, including high fuel and housing levies, contributions to the Social Health Insurance Fund, and increased deductions to the National Social Security Fund.
Small and medium enterprises, in particular, have struggled with compliance, with many failing to meet their financial obligations. The tax regime has been cited as placing an excessive burden on businesses, especially those in their early stages.
Access to credit has also become a major hurdle for businesses. The government’s aggressive borrowing from the domestic market has limited the availability of funds for private sector enterprises, making it difficult for them to expand or sustain their operations.
Without adequate financing, many companies have been forced to close their doors.The impact of these closures has been severe, with thousands of workers losing their jobs.
Employees across various industries, including retail, hospitality, mining, logistics, and financial services, have been affected. Supermarket chains, security firms, and transport companies are among those that have shut down or are struggling to survive.
Businesses with outstanding debts to suppliers, financial institutions, and government agencies have been unable to restructure their liabilities, leaving them no choice but to dissolve.G4S Cash Solutions, Ukwala Supermarket in Nakuru, and other well-known enterprises are among the companies that have officially shut down after years of operation in Kenya.
More firms are expected to follow suit as economic pressures continue to mount. Some businesses have chosen to relocate to neighboring countries with more favorable tax policies and regulatory environments, raising concerns about the long-term sustainability of Kenya’s business sector.
The government has previously pledged support for small and medium enterprises, promising incentives and policy adjustments.
However, with the rate of business closures increasing, analysts argue that more substantial interventions are needed to prevent further economic decline. If the trend continues, Kenya may face an even greater economic crisis, with widespread unemployment and a weakened private sector.
