The Government has reaffirmed its commitment to strengthening Kenya’s retail sector through policy reforms aimed at boosting purchasing power, stabilising the economy and promoting local sourcing.
Speaking in Nairobi during the Retrak 2nd Retail Summit, Ministry of Investment, Trade and Industry Cabinet Secretary (CS) Lee Kinyanjui said the sector remains a key pillar of economic growth due to its role in linking producers to consumers.
“The government recognises the big role played by the retail sector because it does the last mile connection,” said Kinyanjui, noting that the expansion of retail outlets into smaller towns reflects the sector’s growing footprint.
The two-day Summit, held from May 14 to 15, 2026 at Sarit Expo Centre and sponsored by NCBA Bank, Lop Biz, Equity Bank and Network International, convened key industry players, policymakers and development partners to discuss challenges and explore opportunities in the retail sector.
CS Kinyanjui attributed the growth of the retail sector to Kenya’s expanding middle class and increasing urbanisation, which continue to drive consumer demand. However, he acknowledged that reduced purchasing power has slowed consumption.
“When the purchasing power of the citizens is compromised, the baskets from the supermarket become smaller,” he said.
To address this, Kinyanjui said the government has implemented measures, including lowering interest rates to encourage borrowing and increase liquidity in the economy.
“When there is more circulation in the economy, people get that money; they finally come and buy something from the retail outlets,” he explained.
The Cabinet Secretary further revealed plans to ease the tax burden on low-income earners, allowing households to retain more disposable income.
Additionally, he said the government is accelerating the settlement of pending bills owed to suppliers, having allocated about Sh80 billion in the previous financial year and more in the current budget.
“When they are paid, the first place they rush to is to buy something to take home. Again, it affects the economy,” he said, urging county governments to also clear outstanding payments.
On financial markets, Kinyanjui noted that declining Treasury Bill and Bond rates have increased liquidity within banks, creating an opportunity for enhanced lending to the private sector.
He also cited the stability and availability of the Kenyan shilling as a major boost for retailers, particularly those reliant on imports. “As long as your account can support that, you’ll be able to pay; this makes your planning risks much lower,” he said.
Despite this, he challenged retailers to prioritize local sourcing, warning that heavy reliance on imports undermines domestic industries.
“If you go to a supermarket and 30 to 40 per cent of the commodities are imported, especially when they can be sourced locally, then you are part of the problem,” he said.
He encouraged partnerships between retailers and farmers through contract farming to ensure a consistent supply of locally produced goods, commending outlets already embracing the model.
On regulation, the Cabinet Secretary acknowledged concerns over multiple licensing requirements and called for streamlining to reduce the burden on businesses.
“There need not be 20 license; there is a way they can be compressed,” he said, adding that the government is working with County governments to improve clarity and eliminate harassment.
He also underscored the importance of integrating retail developments into urban planning to prevent challenges such as traffic congestion and poor accessibility.
On security, Kinyanjui assured investors of a stable business environment, noting a decline in incidents of unrest that previously disrupted businesses. He urged stakeholders to maintain peace to safeguard investments.
Looking ahead, Kinyanjui encouraged local retail chains to expand regionally, noting that past ventures such as Uchumi Supermarkets’ presence in East Africa had boosted Kenya’s exports.
“If you are able to develop our retail units to expand into the regional market, we are going to make a better Kenya for all of us,” he said.
He reiterated the government’s commitment to ensuring that fiscal policies, including the ongoing budget-making process, support business growth.
“The key is to ensure that we don’t increase taxes in a manner that will compromise efficiency,” he said.
Kinyanjui affirmed that the government remains open to engagement with stakeholders, emphasizing that a vibrant retail sector is essential for sustainable economic development.
By Catherine Odoyo
