Overview

  • Overview

    Kenya has made significant political, structural and economic reforms that have largely driven sustained economic growth, social development and political gains over the past decade. However, its key development challenges still include poverty, inequality, climate change and the vulnerability of the economy to internal and external shocks.

    Kenya’s recent political reform stemmed from the passage of a new constitution in 2010 that introduced a bicameral legislative house, devolved county government, a constitutionally tenured Judiciary and electoral body. The first election was in 2013. The August 8, 2017 presidential elections were nullified on September 1, 2017 by the Supreme Court, and a new presidential election is scheduled for October 17, 2017.

    Devolution remains the biggest gain from the August 2010 constitution, which ushered in a new political and economic governance system. It is transformative and has strengthened accountability and public service delivery at local levels.

    While economic activity faltered following the 2008 global economic recession, growth resumed in the last three years reaching 5.8% in 2016 placing Kenya as one of the fastest growing economies in Sub-Saharan Africa. The economic expansion has been boosted by a stable macroeconomic environment, low oil prices, rebound in tourism, strong remittance inflows and a government led infrastructure development initiative.

    Looking ahead, near-term GDP growth is expected to decelerate to 5.5% in 2017 because of ongoing drought, weak credit growth, security concerns and the pick-up in oil prices. Medium-term GDP growth should rebound to 5.8% in 2018 and 6.1% in 2019 respectively dependent on completion of ongoing infrastructure projects, resolution of slow credit growth, strengthening of the global economy and tourism.

    In the long-term, adoption of prudent macroeconomic policies will help safeguard Kenya’s robust economic performance. This includes implementation of fiscal and monetary prudence and lowering deficit down to 4.3% by FY19/20 as per the Medium Term Fiscal Framework. The fiscal consolidation needs to avoid compromising public investments in critical infrastructure key to unlocking the economy’s productive capacity.

    In addition to aligning fostering economic development through the country’s development agenda to the long-term development plan; Vision 2030, the President in December outlined the “Big Four” development priority areas for his final term as President. The Big Four will prioritize manufacturing, universal healthcare, affordable housing and food security. Social Development

    Kenya has met some Millennium Development Goals (MDGs)  targets, including reduced child mortality, near universal primary school enrolment, and narrowed gender gaps in education. Interventions and increased spending on health and education are paying dividends. While the healthcare system has faced challenges recently, devolved health care and free maternal health care at all public health facilities will improve health care outcomes and develop a more equitable health care system.

    Kenya has the potential to be one of Africa’s success stories from its growing youthful population, a dynamic private sector, highly skilled workforce, improved infrastructure, a new constitution, and its pivotal role in East Africa. Addressing the challenges of poverty, inequality, governance, the skills gap between market requirements and the education curriculum, climate change, low investment and low firm productivity to achieve rapid, sustained growth rates that will transform lives of ordinary citizens, will be a major goal for Kenya.

    Last Updated: Apr 19, 2018

  • The World Bank Group’s (WBG) strategy for Kenya is to support the government’s strategy of ending extreme poverty and increasing shared prosperity. The Country Partnership Strategy (CPS) FY14-18, revised under the Performance and Learning Review (PLR) in June 2017, focuses on improving the economy’s competitiveness and sustainability, protecting and helping the vulnerable to develop their potential, and building consistency and equity through devolution. The CPS/PLR period, extended to FY20, envisages investment of $1 billion a year, through the International Development Association (IDA), The International Bank for Reconstruction and Development (IBRD), International Finance Corporation (IFC), and Multilateral Investment Guarantee Agency (MIGA).

    The current IDA portfolio is approximately US$6.5 billion in 27 national (US$5.3 billion) and seven regional (US$1.2 billion) projects. The biggest investments are in infrastructure followed by the social sectors. Other sectors include: education, private sector development, information and communications technologies, agriculture, and justice.

    Recently approved projects include:

    IFC supports Kenya’s private enterprises through direct investments, advisory services, and capital from global financiers. IFC has invested over US$1 billion in the country’s agribusiness, infrastructure, financial markets, health, and education sectors. It has invested in Bridge International Academies, National Cement, AAR Healthcare, Goodlife pharmacies, Gulf power plants, and Vegpro among others. Its partners in Kenya include Equity Bank, Gulf African Bank, Bank of Africa, Diamond Trust Bank, and Kenya Commercial Bank. Also, the IFC and the World Bank work closely with the government to improve business regulation through reforms.  

    Presently, MIGA is supporting four projects in the energy sector with a gross exposure of US$208 million and net exposure of US$185 million. All the projects are in the energy space, including one guarantee issued in FY14 for Gulf Power Limited for the development of an 80-megawatt heavy fuel oil diesel power plant, including a 66-kilovolt interconnector and backup-metering equipment, on a 20-year build-own-and-operate basis. The IFC is providing financing for Gulf Power Limited and the project is further supported by a partial risk guarantee from IDA.

    Last Updated: Apr 19, 2018

  • Five million people have benefited directly from infrastructure investments under the IDA-funded Kenya Municipal ProgrammeKenya Informal Settlements Improvement Project and Nairobi Metropolitan Services Improvement Project programs.

    • 126.6 kilometers of storm water drains have been constructed protecting 507,000 people from periodic flooding
    • 1590 persons have access to improved shared sanitation facilities, and 107,000 people have access to improved water sources
    • 150 kilometers of road and 390 kilometers of foot and bicycle paths have been constructed

    In addition, 85 settlements amounting to 14,450 beneficiaries have directly benefitted from interventions from enhanced of tenure. Through support of the rail infrastructure;

    • 60,800 people are now within one kilometer access to a commuter railway station
    •  1,305 street and high mast security lights have been installed to enhance security and boost economic activities in urban areas
    • 15 urban centers got modern fire engines, and
    • three markets have been constructed

    Through the Kenya Health Sector Support Project and Transforming Health Systems for Universal Care Projects, 800 community health nurses are undergoing training on primary health care services with focus on midwifery. Also, health facilities’ workers in 1500 primary health care facilities in ASAL counties have been incentivized to improve delivery of quality maternal and child health services.

    The Kenya Power and Lighting Corporation, with support from a multi-faceted partnership with the World Bank has connected 1,000,000 households in informal settlements across the country, benefiting 5,000,000 people.

    The National Safety Net Program (NSNP) is reaching four million people in 765,000 households, an increase from 1.65 million in 2013, and 50,000 households are planned in the next two years. NSNP has supported the strengthening of key systems, namely: electronic authentication payment mechanism; transfers are more timely and predictable; development of a Management Information Systems; a Single Registry, and all the four cash transfer programs have been harmonized.

    Kenya Livestock Insurance Program made two big payouts to respond to the effects of 2016-2017 drought. In February 2017, US$2.1 million was paid to over 12,000 pastoral households, while 11,500 pastoral households got a US$3.1 million payout in August 2017. These benefitted nearly 100,000 people.  

    The IDA-funded Northern Corridor Transport Improvement Project produced significant results: Independent road entities have been created while aviation sub-sector institutions now have financial autonomy and strengthened oversight on aviation security and safety; the Kenya’s Civil Aviation Authority met International Civil Aviation Organization safety standards and was granted a Category 1 rating under the International Aviation Safety Assessment program;  Kenya Airways obtained approval for non-stop flights to the United States; Kisumu airport was elevated to an international airport and can now handle 500,000 passengers annually and, the freight and passenger travel time by road from Mombasa to Malaba reduced by 25%.

    Technical and Analytical Work

    • Kenya Petroleum Technical Assistance Project (KEPTAP) has supported the development of a Petroleum Sector Master Plan and the setup of a Petroleum Business Opportunities.
    • Kenya Accountable Devolution Programmes (KADP) capacity building initiative in participatory budgeting (PB) has seen citizens in several counties participate in structured decision-making forums concerning their county’s development priorities. The adoption of PB has resulted in greater credibility of budget hearing processes.
    • KADP has also supported development of an Open County portal, a sub-national Public Expenditure and Financial Accounting Framework Assessment was successfully conducted in six counties to inform public financial management gaps, while 1,217 government primary health care facilities in 20 counties have been mapped onto a new web application as part of the Results-Based Financing initiative to streamline cashless payment for decentralized health services.

    Last Updated: Apr 19, 2018

  • The World Bank Group has established strong partnerships for knowledge and resources with other development partners, researchers, and agencies that contribute to Kenya’s development. These include the European Union, the European Investment Bank, the African Development Bank, Frances Agence Française de Développement, United Kingdom Department for International Development, the German Development Bank, the Japan International Cooperation Agency, and China.

    Last Updated: Apr 19, 2018

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LENDING

Kenya: Commitments by Fiscal Year (in millions of dollars)*

*Amounts include IBRD and IDA commitments



PHOTO GALLERY

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In Depth

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Apr 12, 2017

Building Cheap Homes

Nearly 61% of Kenyans in cities live in slums. Building affordable homes would plug a housing gap and stimulate economic growth.

Apr 19, 2018

Africa's Pulse, No. 17, April 2018

A new analysis of African economies shows the region’s growth is projected to reach 3.1% in 2018, and average 3.6% in 2019–20.

Oct 30, 2017

Monitoring Progress in Policy

IDA, the World Bank’s fund for the poorest, contributes nearly 50% of its funds to 39 African countries.

Oct 30, 2017

International Development Association (IDA) in Africa

IDA, the World Bank’s fund for the poorest, contributes nearly 50% of its funds to 39 African countries.

Oct 30, 2017

World Bank Africa Multimedia

Watch, listen and click through the latest videos, podcasts and slideshows highlighting the World Bank’s work in Sub-Saharan Africa.

Doing Business in Kenya

The Doing Business report provides objective measures of business regulations and their enforcement. See where your country ranks.

Additional Resources

Country Office Contacts

Main Office Contact
Delta Center
Menengai Road, Upper Hill
PO Box 30577-00100
Nairobi, Kenya
+254-20-293-6000
For general information and inquiries
Keziah Muthembwa
Communications Officer
+254-20-293-6000
kmuthembwa@worldbank.org
For project-related issues and complaints
kenyaalert@worldbank.org