.jpeg)
The Public Sector–Private Sector Engagement Bill, 2025 proposes to create a statutory Business Council of Kenya (BCK) as the unified forum for dialogue between government and industry. Under this framework, existing industry associations and lobby groups would register with the new Council and submit policy proposals on a quarterly timetable, while the Council’s board (with one representative per broad sector) would consolidate those views for engagement with Cabinet Secretaries and biannual presidential roundtables. The government frames the Bill as a way to reduce fragmentation among Kenya’s roughly 100 business membership organizations and clarify the policy agenda.
However, established private-sector bodies – including the Kenya National Chamber of Commerce and Industry (KNCCI) and the Association of Kenya Insurers (AKI) – warn that a single, state-sanctioned channel may constrict rather than enhance dialogue. Insurers note that “the intention, to improve engagement… is commendable, [but] a single, centralized channel for engagement is more likely to reduce interaction, weaken quality of dialogue and undermine effective policymaking.” They emphasize that different industries have unique needs and timing, which a one-size-fits-all council risks smoothing over. To see why the proposed model raises serious concerns, we examine its broad economic impact, institutional design flaws, and sectoral implications – and suggest alternatives consistent with best practices in policy dialogue.
Economic and Inclusivity Concerns: Who Gets Left Out?
Kenya’s economy relies heavily on a dynamic, diverse private sector. The government itself notes that the private sector provides roughly 70% of formal-sector employment and 95% of total jobs (including informal trade). Micro, small and medium enterprises (MSMEs) across agriculture, manufacturing, and especially technology have been engines of recent growth. Effective policy dialogue must reach all of these actors. By imposing an extra organizational layer, the Bill risks raising the “transaction cost” of advocacy. Smaller enterprises or grassroots innovators may find the registration-and-roundtable process onerous. As AKI warns, requiring BMOs to register with the Council “could end up excluding smaller, niche or emerging sectors”. This sets up a bias toward deep-pocketed incumbents who can afford to pay for representation.
In practical terms, limiting the number of interlocutors can tighten the bottleneck of ideas. If dozens of associations no longer speak directly to ministries but only through one council, policy proposals may become filtered. Consider a hypothetical: a rural cooperative faces a sudden tax issue or import duty problem. Under the new model, its concerns would first go to the BCK and await the next quarterly meeting before any response, rather than being addressed promptly by the relevant ministry. Imagine an example of a port congestion crisis “having to wait for quarterly submissions…delayed responses translate to lost opportunities, disruption, and real economic costs.” In turn, entrepreneurs might gravitate toward established channels or lose faith in the formal process altogether, undermining the Bill’s aim to strengthen engagement.
From a macro perspective, reducing the number of independent policy voices tends to concentrate influence. This phenomenon is analogous to raising entry barriers in a market: fewer competitors often means higher prices and less innovation. By analogy, if only a handful of large associations shape the agenda, their lobbying power grows at the expense of smaller challengers. That runs counter to Kenya’s development goals. The country has deliberately promoted fintech startups, agricultural cooperatives and other grassroots enterprises to drive inclusion. Curtailing their direct access to policymakers could erode those gains. In short, raising procedural hurdles in the name of streamlining could ironically narrow Kenya’s economic base. As one critic put it, Kenya’s economy “is too diverse and specialised to be adequately represented through a single coordinating entity”. The policy should instead safeguard competition in policy influence, not stifle it.
Policy Architecture: Centralization vs. Diversity
At the core of the Bill is its institutional design: a one-stop Council that spans all sectors. Its board will include one representative each for manufacturing, finance, agriculture, transport, tourism, MSMEs, wholesale-retail, ICT, construction, foreign-based BMOs, and a cross-cutting umbrella sector. While this taxonomy covers major industries, it oversimplifies. Each broad category contains sub-sectors with conflicting interests. As AKI sharply notes: “different sectors face unique regulatory, operational and risk-related challenges that cannot be squeezed into a one-size-fits-all framework”. Expecting a single appointee (say, for “finance”) to speak effectively for everything from banks to fintech platforms, or insurers to mobile lenders, is unrealistic. A banker cannot articulate insurance-sector woes and vice versa. The risk is misrepresentation: by grouping, say, all SMEs under one seat, the Council may mute critical nuances. For example, nascent tech startups will have very different needs (digital regulation, data laws) than leather tanneries or hardware manufacturers. A unified council postures as inclusive, but it may actually level the discussion to the lowest common denominator.
Another design flaw is the compulsory registration clause. Industry bodies would have to register with the BCK to engage government. In theory BMOs remain voluntary, but in practice this creates an enforcement mechanism. Bodies that fail to join could be effectively shut out of official dialogue. Such compulsion is a marked departure from norms: under current rules, trade associations engage ministries directly or form ad hoc coalitions. The Bill replaces that open system with a regulated filter. This shift has drawn criticism from multiple sides. KNCCI leaders protested that the process itself was top-down, noting that the Bill “did not originate from the private sector” and calling instead for an entity that is “private-sector led and private-sector regulated”. They argue the Council duplicates KNCCI’s own mandate, created without fully involving existing industry associations. In effect, the Bill enshrines one particular governance model in law, leaving little room for alternative or grass-roots arrangements.
Proponents counter that the Council will remain independent. Government spokespeople insist BMOs will “retain full autonomy” – the state will not be granted power “to register, regulate, dissolve, or interfere with any private sector organization”. BMOs are merely given a “formal channel” to consolidate their issues. These assurances, however, make the trade-offs clear: a more orderly process, yes, but at the cost of spontaneity and multiplicity. Structurally, embedding engagement in statute often induces rigidity. A better approach might have been a graduated framework: for example, requiring ministries to consult sector-specific bodies on major policies (as AKI suggests, dialogue “should be the direct responsibility of each Cabinet Secretary) while leaving coalitions free to form as needed. This allows policy input to remain proportional to sectoral scale—much as proportional regulation in finance tailors oversight to an institution’s risk, rather than applying blunt uniformity.
Operational and Procedural Risks.
Beyond structure, the Bill’s mechanics introduce practical hurdles. The timeline for input is rigid: private sector proposals go in quarterly, and the board must review them in fixed cycles. Business problems rarely adhere to a calendar. Urgent issues like supply chain disruptions, sudden tax changes, or emergent public health regulations need rapid feedback. Under the proposed regime, a quick fix becomes a waiting game. AKI’s port example underscores this mismatch: in a crisis, splitting hairs over the deadline can cost jobs and investment. The quarterly cycle also means the Council’s workload will surge periodically, potentially overwhelming staff or leading to superficial vetting of proposals.
Moreover, the new council would carry bureaucratic overhead. Funding and governance are unclear. KNCCI pointed out that earlier talks with the President had envisioned KNCCI itself funding an apex dialogue body, yet the draft Bill does not specify a funding source. Who pays for the BCK’s secretariat, research, and convening functions? If levies on BMOs or fresh public budgets are required, this could breed resistance. Budget uncertainty can also politicize the Council’s operations. Already, private stakeholders worry about government influence despite the legal guarantee of independence. The Council would sit under the Ministry of Investments, Trade and Industry; any major institutional uses of resources or appointments could draw scrutiny. In short, creating a new statutory body is not a panacea for inefficiency – it may introduce another layer of admin risk.
Sectoral and Innovation Implications.
The concentration model also carries specific risks for Kenya’s high-growth sectors and emerging industries. Consider fintech. Kenya’s fintech ecosystem – ranging from digital credit apps and mobile money to cryptocurrency startups – does not fit neatly into one of the Council’s fixed silos. A digital lender might be lumped under “finance” or “ICT” representation, but neither seat may prioritize its issues. Fintech thrives on rapid iteration and agile regulatory feedback. For example, when mobile-based loans or open banking were evolving, industry groups engaged CBK and other agencies directly. Channeling such dialogue through a BCK review could slow innovation. The same applies to creative/digital economy firms, climate tech startups, or emerging export industries: they are often frontier players requiring tailor-made policy attention. Under the Council, they risk being outnumbered by incumbents with more conventional interests.
Conversely, even traditional industries could be affected. Large sectors like manufacturing, tourism or agriculture have sub-sectors with divergent needs (e.g. export logistics vs. domestic market constraints). A single “manufacturing” seat must balance these; if not carefully structured, rural or under-served players may lose out. And although the Bill mentions including micro and small enterprises (one seat), that broad category may struggle to capture the variety of its constituents’ voices.
Regional and emerging markets are also at stake. Kenya’s economy is geographically diverse – policies ideal for urban Nairobi (services, tech) may not suit pastoralist counties (livestock, minerals). Yet the Bill’s public consultative process was itself limited: business forums were held in only five counties, excluding large parts of the country. If the final Council draws mainly from existing national associations (often Nairobi-centric), rural SMEs and county-level businesses may find their issues underrepresented. In this light, mandatory centralized engagement resembles a one-way funnel: local concerns flow into the Council, but without guaranteed direct feedback loops.
Governance and Stakeholder Dynamics.
The Bill also reshuffles who influences policy. Traditionally, government–business consultations in Kenya have been polycentric: line ministries, various regulators, parliamentary committees, and voluntary industry forums all play a role. The new model elevates an apex structure with a presidential backing. This shift is likely to alter incentives. Associations may now lobby not just for policy but to secure or rotate Board seats. Smaller groups could be squeezed or co-opted; indeed, the law proposes quarterly “invitations” to BMOs to submit priorities[21], effectively making engagement a demand-driven function of the Council.
Already, familiar patterns are emerging. KNCCI – whose chapters reach all 47 counties – has openly rejected the Bill, mobilizing member BMOs to oppose what it sees as institutional redundancy. Industry insiders note that some major groups (KEPSA, KAM, FKE) have not been fully integrated into the drafting process[17]. This suggests a struggle over leadership of the private sector narrative: will the apex be a broad-based federation chosen by industry, or a statutory council shaped by the government? If the latter prevails, there is a danger of “government capture” of policy dialogue, where the state holds disproportionate sway in setting agendas. In competitive markets, the advantage goes to nimble challengers; analogously, in policy space, the advantage should go to open competition of ideas. Centralising dialogue risks letting one voice speak louder – not necessarily the right one for every issue.
Alternatives: Preserving Pluralism in Engagement
Rather than entrenching a single forum, Kenya can improve public–private dialogue by building on existing channels. For example:
• Strengthen and legitimize current associations. Parliament could amend laws to require each ministry to consult with established sector bodies (KNCCI, KAM, KEPSA, etc.) when formulating policy. This would give those bodies formal status in rule-making without creating a new council. It would also honor the promise that engagement be “private-sector led”[15].
• Institutionalize ministerial roundtables. As AKI suggests, making each Cabinet Secretary responsible for engaging stakeholders in their portfolio can be formalized. Ministries could hold quarterly (or ad hoc) sectoral roundtables or issue-specific consultative forums. This mirrors global practice where regulators consult experts directly. It avoids the delay of a central queue, and ensures technical dialogue (trade issues with trade associations, financial regulations with banks and fintech, etc.).
• Use multi-layered channels. A hybrid model could combine a lightweight coordinating council (perhaps chartered by the private sector itself, with voluntary membership) with empowered technical committees. For instance, the Bill could be revised to allow the BCK to have advisory subcommittees per sector, populated by specialists. Alternatively, Parliament could establish sectoral boards that feed into a presidium only when broader consensus is needed (similar to the proposed Presidential Roundtable but limited to big-picture issues).
• Leverage digital and county engagement. The government’s online policy portal and county investment forums can be expanded as official inputs. By legally requiring ministries to consider submissions from these platforms, the state creates continuous feedback without monopolizing the process. For example, an improved e-portal could solicit comments on draft laws or regulations in real time, reaching businesses nationwide (including the five counties missed in consultation).
Each of these alternatives aims to improve coordination without bottlenecking the flow of information. They take inspiration from “graduated” regulatory logic: just as financial firms are classed by size and risk, policy dialogue can be tiered by scope. Urgent operational issues get immediate treatment by sector experts; cross-cutting concerns rise to a shared forum. This way, nobody is forced to wait for a fixed schedule to have a voice.
Conclusion: Policy Recommendations
The Public–Private Engagement Bill contains some good intentions, but its current blueprint over-centralizes a fundamentally pluralistic process. It assumes that consolidating all business input into one statutory body will create clarity; evidence suggests the opposite risk. Efficient policymaking thrives on competition of ideas from multiple channels. Imposing a single channel is analogous to a market monopoly – it may streamline a trade, but it also diminishes choice and responsiveness.
Kenya’s policy ecosystem should leverage its diversity, not suppress it. We therefore recommend redrafting the Bill to embed the following principles:
(1) Proportional engagement – align consultation mechanisms to industry size and impact, rather than uniform quotas;
(2) Sector specificity – allow specialized forums (direct ministry committees, thematic working groups) to address technical issues;
(3) Flexibility and speed – avoid rigid timelines that delay urgent solutions;
(4) Inclusivity – ensure rural and emerging sectors have direct channels (for example, by legalizing inputs from county-level business groups and digital submissions); and
(5) Private-sector leadership – give industry bodies a strong role in setting agenda and funding joint initiatives, so the model is genuinely cooperative.
In practice, this might mean formalizing the role of KNCCI (or a reformed KNCCI) in national policy dialogue, or resurrecting KEPSA under new terms. It could involve requiring any major regulatory proposal to undergo a mandatory BMO review process with fixed response targets, rather than routing everything through one Ministry-led council. Above all, it means viewing public–private engagement as an ecosystem rather than a pipeline.
Kenya’s economic future depends on nurturing innovation and inclusion. Policymakers should not replace the country’s vibrant marketplace of business associations with a legislated monopoly of speech. Instead, they should amplify the market’s own competitive logic by ensuring multiple, well-resourced voices can inform policy. By doing so, they can truly open Kenya’s investment climate rather than inadvertently gatekeeping it.
Policy Recommendation: Amend or replace the one-size-fits-all BCK model with a hybrid framework that mandates regular, sector-driven consultations (as AKI advises), and bolsters existing chambers’ roles. Where a council is deemed necessary, make it advisory and private-sector governed, with clear guarantees of responsiveness and diversity. This calibrated approach – akin to targeted regulatory oversight – will foster a more dynamic dialogue and better support Kenya’s diverse economy, compared to the blunt solution of a centralized monopoly on business voice.