NAIROBI, Kenya – A total of 540 employers stopped contributing to the National Social Security Fund (NSSF) in the financial year ending June 2024, marking the first such decline since the COVID-19 pandemic.
The NSSF’s latest annual report shows that active employers fell from 78,549 to 78,009, highlighting the growing pressure businesses face amid a harsh economic environment that has forced some to shut down operations altogether.
“During the same period, active employers reduced by 540 to settle at 78,009 from 78,549. This is a negative development, and management has put measures to ensure the trend is reversed in the next financial year,” the report reads.
While the drop is smaller than the 1,131 firms that exited during the peak of the pandemic in 2020, it underscores a fresh wave of stress across the business sector.
Signs of Economic Strain
Data from the Business Registration Service (BRS) further paints a bleak picture. In the same period:
- 1,817 companies applied to be struck off the register,
- 9 firms sought voluntary liquidation,
- 20 were placed under court-ordered liquidation,
- 14 went into administration,
- 6 faced administrative receivership, and
- 15 filed for bankruptcy.
These developments have been attributed to a combination of high interest rates, youth-led protests over the Finance Bill, and widespread flooding that disrupted infrastructure and business operations.
The economy grew by just 4.7 per cent last year, its slowest pace since 2020, down from 5.7 per cent in 2022.
Mixed Signals from Membership and Registration Data
Despite the drop in employer numbers, individual NSSF contributors rose by 369,934, reaching a record 3.3 million.
The report attributes the 12 per cent increase to the onboarding of civil servants who were previously outside the fund’s coverage.
However, new business registrations declined by 7.6 per cent in 2024, reversing a 2.9 per cent increase recorded the previous year—another signal of waning investor and entrepreneurial confidence.
Treasury: Optimism Ahead
The National Treasury has blamed the slowdown on a cocktail of external shocks, including costly borrowing, natural disasters, and political unrest.
However, it expects a turnaround, projecting 5.4 per cent GDP growth in 2025, buoyed by easing interest rates after the Central Bank cut its benchmark rate by 300 basis points to 10 per cent.
