Interest rate cuts, political calm revive investor confidence in the country

Kenya’s business community has welcomed recent interest rate cuts by the Central Bank of Kenya (CBK), crediting the move with spurring new investments, particularly in the real estate sector.

According to industry players, the improved political climate and the end of the Gen-Z-led anti-government protests have also helped restore investor confidence after months of uncertainty.

“Because of the political stability of recent months, business is slowly picking up and investor confidence is returning,” said Joe Muchiri, Chief Executive Officer of GatePath Realtors.

“We have seen an improvement, with Kenyans gradually returning to investments, especially in real estate. The Central Bank’s decision to reduce interest rates has been a key driver of this renewed momentum.”

The real estate sector, which had faced prolonged headwinds, is now reporting signs of recovery.

Stakeholders, however, are urging the government to safeguard the prevailing calm, warning that renewed unrest could erode the gains made in recent months.

Kenya’s financial sector is also showing positive signs. Private-sector credit grew by 3.3% in July — the fastest pace in a year — following a series of aggressive CBK interest rate cuts.

This marks a sharp turnaround from a 3% contraction in January, CBK Governor Kamau Thugge said in an interview with NTV Kenya. Data cited by Bloomberg shows the July expansion was the strongest since July 2024.