Kenya

Kenya’s improved macroeconomic management has delivered some gains, with inflation remaining within the Central Bank’s target range, a stable exchange rate, and foreign exchange reserves exceeding six months of import cover. However, fiscal vulnerabilities remain significant. Public debt is elevated at 70.6% of GDP, about one-third of government revenues are absorbed by interest payments, and challenges in revenue mobilization, governance, and fiscal consolidation continue to constrain development spending and investment.

Despite strong economic growth over the past two decades, poverty reduction has been gradual. Weak productivity growth, a narrow export base, and insufficient formal job creation have left most workers in low-productivity informal activities, limiting the benefits from economic growth for households. As a result, the poverty rate reached 43.3% in 2025 ($3.00-a-day, 2021 PPP), a decline of only 2 percentage points over the previous 3 years, as persistent regional disparities and limited economic opportunities continue to constrain faster progress toward shared prosperity.

Read More

Read Less

Kenya’s macroeconomic framework remains broadly stable, supported by resilient growth, low core inflation, and strong external buffers. GDP is expected to grow by 4.6% in 2026, despite global economic uncertainties, and is projected to average 4.4–4.8% over the short to medium term.

Despite the macroeconomic stability, labor market outcomes remain weak. Employment growth declined from 4% in 2024 to 3.8% in 2025, while the share of formal jobs remained low at around 16.2%. Household consumption is anticipated to soften as energy and transport costs rise, while recovering credit and stronger foreign investment are expected to support investment. Fiscal consolidation remains a major challenge, with Kenya assessed as being at high risk of debt distress.

Unless growth translates into higher incomes for the poor, poverty is unlikely to decline rapidly. At the international poverty rate ($3.00 in 2021 PPP), poverty in Kenya is projected to decline by 0.3 percentage points to 43% in 2026. Structural reforms that raise the productivity of the private sector, support domestic revenue mobilization, strengthen workforce skills, increase access to capital, and strengthen households’ resilience to climate shocks are key for improving shared prosperity.

The outlook is increasingly uncertain amid global and domestic shocks. Continued failure to meet fiscal consolidation targets could exacerbate Kenya’s debt vulnerabilities and undermine private sector-led growth. Elevated global uncertainty, the energy shock associated with the conflict in the Middle East, and anticipated El Nino-related weather disruptions could weigh on growth and increase inflationary pressures.

Read More

Read Less

International Development Association (IDA) and International Bank for Reconstruction and Development (IBRD)  (September 15, 2026):
$8.4 billion in 34 active projects, 27 national, and 7 regional.

International Finance Corporation’s (IFC) (as of 8/31/26):
The $1.5 billion portfolio is led by financial institutions, followed by manufacturing, agribusiness, services, and infrastructure. A $63.5 million advisory portfolio spans 32 projects, supporting private investment, MSME and climate finance, and capital market development. Kenya serves as IFC’s East Africa hub for finance, innovation, logistics, healthcare, and technology, and hosts IFC’s global gender and GBV hub. The country is also a platform for pioneering private‑sector solutions in fragile and refugee‑hosting contexts, including the Kakuma Kalobeyei Challenge Fund, which mobilizes investment to create jobs, build resilience, and drive sustainable growth.

Multilateral Investment Guarantee Agency  (MIGA)  (as of 9/15/26):
The World Bank Group Guarantee Platform has an active guarantee exposure of $723.1 million (MIGA  $544.1 million, IDA $86 million, and IFC $93 million) across 19 projects, supporting investments across the energy, finance, road infrastructure, tourism, clean cooking, and manufacturing sectors. MIGA has also supported the Trade and Development Bank, of which Kenya is a member, through guarantees that have enabled the mobilization of $747 million in commercial financing to expand trade finance across member countries. Under the Platform, MIGA will deepen collaboration across the Group to de-risk foreign investment and focus on projects that align with the Platform’s core objectives of scaling impact, mobilizing private capital, supporting climate-aligned investments, and driving economic growth and job creation.

Read More

Read Less

The FY23-FY28 Country Partnership Framework (CPF), endorsed by the WBG Board of Executive Directors in November 2022, set out the strategy to support Kenya’s transformation into a middle-income economy that achieves inclusivity and resilience. The CPF builds on the WBG’s comparative advantages and drew from various sources, including Country Partnership Strategy (CPS) FY14–FY20, the CPS Completion and Learning Review (FY22), the FY20 Systematic Country Diagnostic, Country Private Sector Diagnostic (FY19), and over 34 stakeholder consultations. It aligns with Kenya Vision 2030 and the World Bank’s overall Africa Strategy, which emphasizes jobs and economic transformation, the digital economy, human capital, universal access to electricity, climate change mitigation and adaptation; addressing fragility, conflict, and violence; and achieving gender equality.

The WBG has established strong partnerships for knowledge and resources with other development partners, researchers, and agencies that contribute to Kenya’s development. These include the African Development Bank, China, the European Union, the European Investment Bank, France’s Agence Française de Développement, the German Development Bank, the Japan International Cooperation Agency, and the United Kingdom’s Foreign, Commonwealth & Development Office, known as FCDO.

Read More

Read Less

Energy: The Kenya GREEN Program connected 1.3 people to improved electricity services. Corporate governance at KPLC was strengthened through the appointment of four private shareholders to the Board. The Corporate Turnaround Strategy was adopted and independently verified.

Agriculture, Rural Development & Climate: A national digital farmer registry covering 6.4 million farmers was established to support government e-subsidy delivery. Agricultural assets and services reached 1.4 million farmers, including 612,000 women, while 464 SACCOs and 222 Farmer Producer Organizations were strengthened. Climate resilience subprojects benefited 699 wards across 45 counties, far exceeding the target of 210. Counties contributed $23 million in FY24/25 for climate resilience investments.

Marine Fisheries: The Kenya Marine Fisheries and Socio-Economic Development Project disbursed 84,785 livelihood grants to coastal community groups, including 46,794 women, surpassing the target of 22,000. 82 social infrastructure improvements were completed and the Kenya Fisheries Policy was approved by Cabinet.

Education: School improvement grants were provided to 5,419 primary schools, while 2.65 million learners benefited from school meal programs. Scholarships, school kits and mentoring supported 51,974 disadvantaged and refugee learners. Teacher presence reached 95%, exceeding the 70% target.

Urban & Informal Settlements: Living conditions improved for 926,688 people, tenure security was enhanced for 122,815, 29,452 property titles were issued, and Kakuma and Dadaab were established as municipalities.

Water & Sanitation: Operating cost recovery ratios improved among 77 water service providers. 28 community water points were constructed or rehabilitated and 1,478 villages were verified as Open Defecation Free.

Financial Inclusion: Financial inclusion initiatives helped 90.2% of supported MSMEs survive the COVID-19 pandemic, exceeding the 70% target. They mobilized $168.8 million in private capital (exceeding the target of $50 million) and supported 15 new MSME financial products.

Governance: Digital government systems were strengthened, with 92% of agencies collecting user fees digitally and 69.4% of VAT taxpayers issuing electronic fiscal invoices through e-TIMS. All 47 counties qualified for devolution institutional performance grants.

Read More

Read Less

The Kenya Analytical Program on Forced Displacement (KAP-FD) is a multi-year initiative generating comprehensive socioeconomic panel data on refugee and host communities in Kenya. This interactive dashboard features research from the World Bank, UC Berkeley, and UNHCR, showcasing survey data (2018-2023) on education, employment, food security, health, and household welfare. Users can visualize indicators by location and population type, download data and charts, and access evidence-based insights to inform policies and programs that enhance livelihoods for both refugees and host communities across camp and urban settings.

Open Dashboard

Read More

Read Less