Employers warn of rising costs, urge Ruto to protect jobs
Business
By
Brian Ngugi
| May 09, 2026
The country’s main employers’ lobby has warned that a sharp rise in the cost of doing business was straining enterprises across sectors.
The Federation of Kenya Employers (FKE) called on President William Ruto to prioritise job protection, ease of doing business, and predictable economic policies.
The FKE, which has represented employers since 1959, expressed concern over “increased statutory obligations, regulatory burdens, and operational costs” that are “impacting competitiveness, investment, and job creation,” according to a press release issued after a management board meeting signed by Dr Gilda Odera on behalf of the board.
The statement comes just hours before the government is expected to unveil a raft of new tax measures contained in the Finance Bill 2026 – including new levies on essential goods in what economists say will hike the cost of living further.
The FKE emphasised the importance of tripartism – the three-way social dialogue between government, employers, and trade unions – warning that “unwarranted attacks” aimed at the federation do not augur well for industrial harmony.
“Divergent views among social partners are both expected and legitimate but must be expressed within confines of mutual respect to ensure that the spirit of social dialogue is maintained,” the federation said.
The lobby expressed full confidence in its Executive Director and CEO, Jacqueline Mugo, adding that its statements represent the collective voice of employers on wage adjustments, labour law reforms, and the business environment.
The FKE called on the government to prioritise policies that enhance the ease of doing business, protect jobs, promote investment and enterprise growth, and ensure predictability and stability in labour and economic policies.
“Employers are committed to social dialogue so that proposed policy interventions in the labour sector carefully balance protection of employees’ welfare and economic realities to ensure business sustainability and protect employment levels,” the statement read.
The federation also urged the government to respect labour institutions such as the National Labour Board and the Wages Councils, describing them as the “appropriate forums for determining wage adjustments and labour law reforms in a structured and evidence-based manner.”
The FKE’s warning comes as Kenya grapples with a surge in the cost of living, accelerated by a 45 per cent spike in global oil prices following the outbreak of the Iran-Israel conflict.
The International Monetary Fund recently warned that Kenya risks renewed social tensions unless it pairs fiscal consolidation with stronger social protections – a caution that appears increasingly urgent as the government prepares new levies.
“We call upon the government to prioritise policies that enhance the ease of doing business, protect jobs, promote investment and enterprise growth, and ensure predictability and stability,” the FKE reiterated.
The federation said it remains open to structured dialogue, adding: “It is by working respectfully together that we will create a more conducive business environment for the good of the nation.”