Key facts
- The World Bank raised Kenya's 2026 growth forecast to 2.6% from 2.3%, citing faster-than-projected growth in the first six months of the year.
- The World Bank estimated corruption and collusion cost Kenya about 2% of GDP a year through higher fiscal deficits.
- The World Bank said corruption risks contribute to a higher cost of borrowing, citing a governance premium on sovereign debt.
- Kenya's government says an electronic procurement platform it is rolling out will cut graft avenues and wastage.
- The World Bank flagged fiscal slippage that could raise debt and an August 2027 general election as risks.
The World Bank raised its growth forecast for Kenya to 2.6% for 2026 from 2.3%, citing faster-than-projected growth in the first six months of the year, in the latest edition of its biannual Kenya Economic Update report published on October 29.
The Washington-based lender said governance challenges are increasingly limiting Kenya's prospects for faster and more broadly shared growth, with corruption as the key binding constraint. It estimated that corruption and collusion cost the country about 2% of GDP a year through higher fiscal deficits, which it said translates into substantial additional borrowing needs accumulating over time.
The World Bank said corruption risks contribute to a higher cost of borrowing, citing a governance premium on sovereign borrowing. Kenya has struggled with heavy annual debt repayments after ramping up borrowing from 2013 to finance infrastructure, and has missed its fiscal deficit targets in recent years.
The International Monetary Fund said in June it had shared a draft report flagging governance weaknesses and corruption vulnerabilities with the Kenyan government, following a request from Nairobi. Kenya's government is rolling out an electronic procurement platform, which it says will cut graft avenues and wastage, and has signed a conflict of interest bill.
The lender warned of risks including fiscal slippage that could drive up debt. It also said Kenya's general election in August 2027 could increase uncertainty, curb investment and tourism, and add to spending pressures.