KEPSA participated in the Breakfast Meeting on Businesses in Distress; Closures and Downsizing of Companies organized by the State Department of Investment Promotion (SDIP) in collaboration with the Kenya Association of Manufacturers (KAM) and Kenya National Chamber of Commerce and Industry (KNCCI) in Nairobi. The focus of the meeting, which was held on 16^th December 2024, was the key issues affecting businesses in Kenya, including distress, closures, and downsizing.

In his remarks, Mr Abubakar Hassan, Principal Secretary, State Department for Investment Promotion (SDIP), committed to engaging stakeholders to develop policy interventions that support business continuity and economic stability. He said that SDIP will work towards eliminating bureaucratic inefficiencies and high compliance costs that hinder business operations.

The discussions also covered strategies for investment attraction, retention, brownfield investments, and corporate recovery, with an emphasis on developing mitigation strategies to sustain economic growth and employment. The key discussion areas were: -

1. Business Distress: Closures and Downsizing; The increasing number of businesses facing financial distress, closures, and downsizing was a major concern. Factors such as high operational costs, regulatory burdens, multiple taxation, and global economic shocks were identified as key challenges.

• The need for a structured business rescue framework was highlighted to prevent job losses and economic disruptions.

2. Investment Attraction and Opportunities; The role of Public-Private partnerships (PPPs) in de-risking investments and infrastructure development was highlighted.

• To boost investment in Kenya, a predictable and investor-friendly environment is essential. Enhancing the ease of doing business and streamlining regulatory approvals were identified as priority areas.
• Sector-specific investment opportunities in manufacturing, agribusiness, ICT, and renewable energy were emphasized as key areas for economic transformation.

3. Investment Retention Strategies; Investor confidence remains critical in maintaining existing investments. A stable taxation and policy framework is necessary to reduce uncertainty.
4. Brownfield Investments and Corporate Recovery; where investors acquire and revitalize existing but struggling businesses were identified as a viable strategy to sustain economic activity and protect jobs.

• Business rescue mechanisms, such as insolvency law reforms, financial restructuring, and government-backed recovery programs, were discussed as crucial interventions.
• The need for a national business resilience strategy to support struggling companies was emphasized.

5. Development of Mitigation Strategies; Digital transformation and innovation were identified as key drivers for business resilience.

SDIP in collaboration with KEPSA, KAM, KNCCI, and other stakeholders, will continue to drive initiatives aimed at enhancing business resilience, supporting struggling enterprises, and fostering a favourable investment climate.