A Widening Skills Deficit

Kenya's finance and accounting sector is confronting a significant human capital challenge that threatens to impede its contribution to the nation's economic ambitions. Despite a substantial number of registered accountants, a persistent gap exists between the skills professionals possess and the evolving demands of the modern economy. According to the Institute of Certified Public Accountants of Kenya (ICPAK), the country has over 38,000 registered accountants, with about 26,400 being active practitioners as of early November 2025. However, a World Bank analysis highlights that a shortage of advanced expertise continues to hinder the sector's progress. Many practitioners lack up-to-date knowledge in crucial areas such as International Financial Reporting Standards (IFRS), sustainability reporting, data analytics, and artificial intelligence. This deficit limits the ability of both private and public entities to implement modern, efficient finance functions.

The 2023 Skills Needs Survey by the Federation of Kenya Employers (FKE) identified finance and business management as one of the top areas with high demand for skilled professionals, second only to information technology. Yet, employers report significant difficulties in finding candidates with the right competencies. This skills mismatch is exacerbated by an education system that struggles to keep pace with rapid technological changes, producing graduates who may not be future-ready. The consequence for businesses includes inhibited expansion, loss of revenue, and difficulties in remaining competitive.

The Double-Edged Sword of Technology

The adoption of technology in Kenya's accounting landscape presents both a solution and a challenge. Automation, artificial intelligence (AI), and cloud computing are transforming the profession globally, shifting the focus from manual data entry to strategic advisory. Technologies like Robotic Process Automation (RPA) and Machine Learning (ML) can handle repetitive tasks such as invoice processing and reconciliations with greater speed and accuracy, freeing up accountants for higher-value work like financial analysis and fraud detection. However, the sector's adoption of these tools has been sluggish. Key constraints include high implementation costs, limited digital infrastructure in some areas, and a shortage of finance professionals who are tech-savvy. Many small and medium-sized enterprises (SMEs) and public institutions, in particular, face resource constraints that prevent investment in modern financial systems.

This technological lag perpetuates reliance on traditional manual systems, which increases the risk of errors and slows down financial reporting. For public institutions, this contributes to delayed audits and weak reporting, with the National Treasury estimating pending bills at Sh181.98 billion by mid-2024. To bridge this gap, professional bodies like ICPAK and the Association of Chartered Certified Accountants (ACCA) are advocating for continuous professional development and are redesigning qualifications to integrate skills in AI, sustainability, and ethics.

Persistent Governance and Ethical Hurdles

Weak corporate governance remains a significant challenge, eroding investor confidence and undermining the integrity of the financial sector. Historical collapses of several listed firms have been attributed to governance failures, highlighting the urgent need for robust oversight. While Kenya has a regulatory framework, enforcement gaps, political interference, and resource limitations within regulatory bodies hinder effective compliance. A 2025 report noted that issues like nepotism and tribalism can weaken governance structures, reducing transparency and objectivity.

The Capital Markets Authority (CMA) reported in January 2025 that while the overall governance score for listed issuers has improved significantly since 2018, there was a slight decline in the 2023/2024 financial year. This indicates that consistent progress is not guaranteed. Poor financial disclosure practices in some institutions continue to be a concern. In the public sector, weak accountability structures and reporting frameworks have led to fiscal leakages and a rising public debt burden. The transition to accrual-based accounting, aligned with International Public Sector Accounting Standards (IPSAS), is a key government reform aimed at enhancing transparency and financial discipline, but its success depends on system upgrades and capacity building.

Addressing these interconnected challenges of skills deficits, slow technological uptake, and weak governance is critical for the future of Kenya's finance sector. Experts suggest that a concerted effort involving educational reforms, investment in technology, and strengthened regulatory enforcement is necessary to build a resilient profession capable of supporting sustainable economic growth for Kenya and the wider East African region.