The World Bank has identified three sectors in Kenya with significant untapped potential for private sector investment, which could unlock up to Ksh.194 billion ($1.5 billion) in investments and more than 80,000 job opportunities. According to the World Bank's Private Sector Diagnostic report, these sectors are avocado and mango, medical consumables, and coastal tourism. The report focused on these areas as they have untapped potential that could position Kenya for greater competitiveness in global markets if existing challenges are addressed.
The avocado and mango value chains have been identified as areas where Kenya can create jobs and attract investment by moving beyond exporting raw fruit and expanding higher-value production and processing. The report recommended increasing fresh avocado exports to Europe by taking advantage of Kenya's counterseasonal harvesting periods, competitive production costs, and established export markets. Additionally, the report highlighted that only about 10 per cent of mango production is currently processed and just 3 per cent exported, and recommended that private investors establish and expand facilities producing mango pulp for Kenyan and regional juice manufacturers.
The World Bank report also highlighted Kenya's coastal tourism as having significant untapped private investment potential, supported by established visitor flows and the region's natural and cultural attractions. However, Mombasa receives only about 134,000 European arrivals compared with about two million from the same markets at comparable long-haul beach destinations, pointing to a significant untapped market. The report noted that coastal bed-nights in 2024 had exceeded pre-pandemic levels by about 25 per cent, but investment in coastal accommodation has not increased at the same pace.
The report recommended that private investment could help expand coastal tourism by increasing accommodation and developing new experiences while linking beach tourism with Kenya's established safari and business-travel markets. It suggested investment in the construction and modernisation of hotels to meet growing demand, as well as the development of marine, cultural, golf, and wellness tourism. Private operators could also develop integrated bush-and-beach packages targeting European visitors, domestic tourists, MICE travellers, and high-spending safari tourists.
The third area identified by the World Bank is medical consumables manufacturing, where Kenya could use its skilled workforce, logistics infrastructure, and access to regional markets to develop a manufacturing hub. The sector includes high-volume products such as gloves, syringes, gauze, and intravenous kits, which are widely used by health facilities and are largely imported across the region. Kenya's domestic medical consumables market was valued at about Ksh.55 billion (US$430 million) in 2025 and is projected to reach Ksh.70 billion (US$540 million) by 2030.
The World Bank report noted that regulatory complexity and uncertainty are major barriers to investment in the medical consumables sector, and recommended simplifying and streamlining regulatory processes. The report also called for more predictable government procurement to give manufacturers greater certainty about demand. According to the report, government procurement could serve as an anchor market for new manufacturers before they expand into private healthcare, donor-funded programmes, and export markets.
The World Bank's Private Sector Diagnostic report highlights the potential for Kenya to unlock significant investments and job opportunities in the avocado and mango, medical consumables, and coastal tourism sectors. The report's recommendations aim to address existing challenges and unlock the potential of these sectors, which align with the tourism, agriculture, and manufacturing priorities under Vision 2030.
Key points
- The World Bank has identified three sectors in Kenya with significant untapped potential for private sector investment.
- The sectors have the potential to unlock up to Ksh.194 billion ($1.5 billion) in investments and more than 80,000 job opportunities.
- The report recommended measures to improve investors' cash flow, including deferring import VAT on processing equipment.
