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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, continued weak private sector investment and the vulnerability of the economy to internal and external shocks.

    Kenya ushered in a new political and economic governance system with 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 under this new system was held in 2013. The August 8, 2017 presidential elections were nullified on September 1, 2017 by the Supreme Court, and a new presidential election was held on October 17, 2017. Kenyan President Uhuru Kenyatta was sworn in for a second and final five-year term on November 28, 2017. 

    In 2019, Kenya’s economic growth averaged 5.7%, placing Kenya as one of the fastest growing economies in Sub-Saharan Africa. The recent economic expansion has been boosted by a stable macroeconomic environment, positive investor confidence and a resilient services sector. 

    Kenya’s economy is being hit hard through supply and demand shocks on external and domestic fronts, interrupting its recent broad-based growth path. Apart from the COVID19 crisis, the locust attack which started early 2020, has affected many parts of Kenya especially the North East. It has had a negative impact on the food security and growth of the agriculture sector in the country. Real gross domestic product (GDP) growth is projected to decelerate from an annual average of 5.7% (2015-2019) to 1.5% in 2020. However, if takes longer than expected to bring the COVID-19 (coronavirus) pandemic under control, GDP could contract by 1.0% in 2020, and see a delay in the projected recovery to 5.2% growth in 2021. The downside risks include a protracted global recession undermining Kenya’s export, tourism and remittance inflows, further tightening of COVID-19 health response measures that disrupt the domestic economic activity, fiscal slippages and weather-related shocks. 

    World Bank support to Kenya’s pandemic response includes emergency funding to strengthen medical services and reduce the spread of the virus, as well as budget support to help close the fiscal financing gap while supporting reforms that help advance the government’s inclusive growth agenda. 

     In addition to aligning the country’s long-term development agenda to Vision 2030,, the President outlined the “Big Four” development priority areas for his final term as President prioritizing manufacturing, universal healthcare, affordable housing and food security.

    Social Development

    Kenya met several of the Millennium Development Goals (MDGs) targets; reduced child mortality, near universal primary school enrollment, 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: Jul 31, 2020

  • The World Bank Group’s Country Partnership Strategy (CPS) 2014-2018 for Kenya supports the government’s strategy of ending extreme poverty and increasing shared prosperity. Under the Performance and Learning Review FY20, which summarizes CPS implementation progress, was extended to FY20 and has been further extended further based on the ongoing efforts on COVID-19 (coronavirus) response. Discussions are underway for the preparation of a new Country Partnership Framework for Kenya for the period FY21-2026.  

    The current International Development Association portfolio stands at $7.53 billion in 39 projects: 30 national ($6.26 billion) and nine regional ($1.27 billion) projects. The Macroeconomics, Trade and Investment sector takes the largest of investments at 23% of the portfolio. Other development investments include infrastructure, social sectors, urban, agriculture, devolution, governance, justice, law and order, disaster risk management, forced displacements, private sector development, and statistical capacity building.

    Recently approved IDA projects include:

    • The Kenya COVID 19 Learning Continuity in Basic Education Project ($10.8 million) approved July 13, 2020, which aims to enhance access to online and distance learning for all students in primary and secondary schools and facilitate a smooth transition in the return to school for targeted vulnerable students. 

    • The Emergency Locust Response Project ($43 million), approved on May 21, 2020, seeks to respond to the threat posed by the desert locust outbreak and to strengthen Kenya’s system for preparedness.

    • The Kenya Second Inclusive Growth and Fiscal Management Development Policy Operation ($1000 million), approved on May 19, 2020  aims  to (i) crowd in private investment and financing for affordable housing; (ii) enhance farmer incomes and food security; (iii) create fiscal space (iv) crowd in private investment and leverage digitization, to support the government’s inclusive growth agenda.

    • The COVID-19 Health Emergency Response Project ($50 million), approved on April 2, 2020 is supporting Kenya to prevent, detect and respond to the threat posed by COVID-19 (coronavirus) and strengthen national systems for public health preparedness.

    • The Marine Fisheries and Socio-Economic Development Project ($100 million), approved March 10, 2020 aims to improve management of priority fisheries and mariculture and increase access to complementary livelihood activities in coastal communities.

    The International Finance Corporation’s (IFC) committed investment portfolio in Kenya stands at $884 million as of June 30, 2019. Most of IFC’s portfolio is attributable to the financial sector (67.3%) followed by manufacturing, agribusiness and services (20%) and infrastructure (12.7%). 

    As the fourth largest country portfolio in Sub-Saharan Africa (10%), Kenya remains critical to IFC’s operations in the region. IFC remains committed to scaling up investment and advisory support especially in the current fiscal climate and within the context of the President Kenyatta’s Big Four focus areas – manufacturing, affordable housing, universal healthcare and food security. 

    On the advisory side, total funds under management amount to approximately $45.6 million as of June 30th, 2019, supporting work across all four advisory business lines - access to finance, sustainable business, public-private partnerships (PPPs) and investment climate.

    The Multilateral Investment Guarantee Agency’s (MIGA) gross exposure in Kenya totaled $146 million as of July 2, 2020, comprising two projects to support foreign private investments in the energy sector and one project in the financial sector. The pipeline currently includes projects in renewable energy (off-grid solar and geothermal) and transport infrastructure (roads). MIGA is also engaged with the PPP Unit within the Ministry of Finance to work upstream on high-priority projects, particularly in the infrastructure space, as well as healthcare and affordable housing.

    Last Updated: Jul 31, 2020

  • More than 5.5 million people have befitted directly from the infrastructure and services supported under three urban sector programs; Nairobi Metropolitan Services Improvement ProjectKenya Informal Settlements Improvement Program, and Kenya Urban Support Program. Among other projects, these programs, which are spread across the country, have: 

    • Improved health conditions of 100,000 people through improved sanitation infrastructure and services: 186 kilometers of sewer lines have been laid, three treatment plants in Ruiru, Thika and Juja rehabilitated and 21 ablution blocks constructed, resulting to 8,500 sewer connections made across the three projects

    • Reduced flooding through construction of storm water drainage, targeting flood prone zones: 300 kilometers of storm water drains have been constructed which have been crucial in tackling the flood menace

    • Enhanced security and livelihoods through provision of 400 high masts and 2000 streetlights in dense urban neighborhoods. Security has been enhanced for over 100,000 urban residents; urban street vendors have increased hours of operation improving incomes.

    • Increased access to portable water to 8,000 households improving health status of communities: 120 kilometers of water pipelines have been constructed, with 11 elevated steel water tanks erected and in use, enhancing access to clean water to 20,000 people across the country

    • Improved mobility and accessibility through construction of 200 kilometers of all-season roads, with accompanying footpaths, cycle lanes, 150 kilometers of standalone non-motorized transport facilities, bridges and 10 commuter rail stations. The improved road and rail infrastructure, especially serving poor and dense neighborhoods, has enhanced accessibility, with 350,000 people benefitted directly from the commuter rail stations.

    • The development of markets has improved trade: 7,000 traders are benefitting directly through the upgrading of 20 markets across the country. This has improved incomes and strengthened small and medium enterprise activities, with most businesses owned and operated by women. 

    • Increased access to portable water to 8,000 households improving health status of communities: 120 kilometers of water pipelines have been constructed, with 11 elevated steel water tanks erected and in use, enhancing access to clean water to 20,000 people across the country.

    Additional results include: 

    • The Kenya Devolution Support Project (KDSP) has provided performance-based grants to incentivize county governments to improve systems and capacities that underpin enhanced service delivery. There has been improvement in overall institutional performance across county governments. With respect to public financial management, for example, there is improvement in the quality of financial statements and audit opinions. More importantly, two county governments, Makueni and Nyandarua received a clean audit opinion in the FY2017/18 audit results.

    Last Updated: Jul 31, 2020

  • 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: Jul 31, 2020

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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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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
External Affairs Officer
+254-20-293-6000
kmuthembwa@worldbank.org
For project-related issues and complaints
kenyaalert@worldbank.org