SheddyZolani

Key Takeaways From the World Bank’s Kenya Economic Update (Edition No. 34): — Anti-corruption reforms could increase Kenya’s GDP by 8.7%–22.3% by 2035 relative to a no-reform scenario, improve job opportunities for up to 7.7M people and boost household consumption by up to 27%. — Anti-corruption reforms could reduce Kenya’s debt-to-GDP ratio by up to 18% relative to the baseline. Improved governance could also lower external borrowing costs by 50–100 basis points, saving USD 50M–100M annually. — Governance weaknesses are estimated to widen Kenya’s annual fiscal deficit by ~2 percentage points of GDP through revenue leakages, inefficient spending and procurement irregularities. — Some 39% of Kenyan firms identified corruption as a major business constraint in 2025, up from 25% in 2013, while 36% reported experiencing at least one bribery request in the preceding year. — ~48% of medium-sized firms reported being expected to provide gifts to public officials, compared with 36% of small firms and 31% of large firms. Firms exposed to bribery were over 30% less likely to innovate. — Informal workers, accounting for 83.8% of employment, can lose up to 20% of their daily earnings to bribes demanded by police and municipal officials. — Electricity for Kenyan businesses costs over 2X as much as in Vietnam and ~50% more than in Uganda. Mombasa Port ranks 375th out of 403 ports globally in the Container Port Performance Index. — Kenya’s GDP growth is projected at 4.6% in 2026, 4.4% in 2027 and 4.8% in 2028, compared with 4.6% in 2025 and 5.2% in H1 2026. — The current account deficit is projected to widen to 4.3% of GDP in 2026 from 2.8% in 2025, reflecting higher import costs and weaker remittances. — Kenya’s FY2025/26 fiscal deficit widened to 6.8% of GDP from 6.0% in FY2024/25, exceeding the original 4.7% target. Expenditure reached 24.1% of GDP against a budgeted 22.2%. — Public debt stood at 69.9% of GDP in June 2026, with domestic debt accounting for 56.2% of the total. Interest payments consumed 33.6% of government revenue, equivalent to 5.8% of GDP. — Inflation increased to 7.3% in October 2026 from 4.6% a year earlier, driven by food (+10.2%) and energy (+10.4%) prices. The CBK maintained its policy rate at 8.75%. — Private sector credit growth accelerated to 10.6% in September 2026 from 5.0% a year earlier, although lending to manufacturing contracted by 1.8%. — Poverty is projected to decline marginally to 41.4% by 2028 from 43.0% in 2026, while ~84% of employment remains informal, limiting productivity and income growth. Source: World Bank Kenya Economic Update No. 34 (documents.worldbank.org/en/p…)