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 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.

    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 promoted greater investments at the grassroots, strengthened accountability and public service delivery at local levels.

    While economic activity faltered following the 2008 global economic recession, growth resumed in the last five years reaching 5.7% in 2018 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 gross domestic product growth (GDP) is expected to rise to 5.8% in 2019 underpinned by recovery in agriculture, better business sentiment, and easing of political uncertainty. Medium-term GDP growth should rebound to 5.8% in 2019 and 6.0% in 2020 respectively dependent on growth in private sector credit, continued strong remittance flows, management of public debt and expenditure and global oil prices. 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: Mar 28, 2019

  • 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 $6.5 billion in 35 projects: 28 national ($5.3 billion) and seven regional ($1.2 billion) projects. The biggest investments are in infrastructure followed by the social sectors. Others include; agriculture; devolution; governance; justice, law and order; disaster risk management; forced displacements; private sector development; and statistical capacity building.

    Recently approved projects include:

    IFC’s investment portfolio in Kenya stands at $951.3 million as of June 30, 2018. Seventy percent of this portfolio is attributable to the financial sector, followed by manufacturing, agribusiness and services and infrastructure. IFC plans to scale up investment and advisory support especially within the context of the President Kenyatta’s Big Four focus areas: manufacturing, affordable housing, Universal Health Care (UHC) and food security. On the advisory side, total funds under management amount to approximately $25.6 million supporting access to finance, sustainable business, public-private partnerships (PPP) and investment climate.

    Multilateral Investment Guarantee Agency (MIGA) has a gross exposure of $148 million in the portfolio including three projects to support private investments in the energy sector. The pipeline includes one large project (to cost roughly $1b) in the transport sector and is currently underwriting two projects in the energy sector. MIGA is 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 university housing. 

    Last Updated: Mar 28, 2019

  • Through the IDA-funded Kenya Primary Education Development, seven million children have benefitted directly from the project, seven million Early Grade Mathematics (EGM) textbooks have been provided to all primary schools, and 117,000 teachers trained in Early Grade Mathematics methodologies.

    More than 7.5 million people have benefited directly from infrastructure investments under the IDA-funded Kenya Municipal Programme, Kenya Informal Settlements Improvement Project and Nairobi Metropolitan Services Improvement Project programs.

    Through the Transforming Health Systems for Universal Care Project, 400 Enrolled Community Health Nurses have graduated after a two and half year training on primary health care services with focus on midwifery.

    The Kenya Medical Supplies Authority has begun distribution of family planning commodities to counties based on guidance from the Division of Family Health and county governments.

    The National Safety Net Program (NSNP) is reaching nearly five million people in over one million households, an increase from 1.65 million people in 2013, and will be scaling up to an additional 50,000 households in the next two years in the most drought affected areas of the north and northeast region.

    Through the Kenya Devolution Support Project (KDSP) support, Kenyan counties have enhanced capacity in public financial management, public participation, human resource management, planning, monitoring and evaluation

    A $1 billion investment in International Development Association (IDA) financing over 13 years has have realized extensive roads rehabilitation, triggered major institutional and policy reforms that have transformed Kenya’s roads and the aviation sector.

    • 162,000 kilometers of Kenya’s roads are documented since 2005.
    • The investment also led to creation of transport agencies and strengthened others namely: the Kenya National Highways Authority, the Kenya Urban Roads Authority, the Kenya Rural Roads Authority and the Kenya Civil Aviation Authority
    • Modernization and expansion projects in the aviation sector has:
      • Boosted economic growth and has created thousands of jobs.
      • Promoted regional trade and tourism
      • Jomo Kenyatta International Airport is ready to handle non-stop flights to and from the United States for the first time and its passenger capacity has increased to 7.5 million from 2.5 million

    Last Updated: Mar 28, 2019

  • 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: Mar 28, 2019

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LENDING

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

*Amounts include IBRD and IDA commitments



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