Kenya's economy demonstrated resilience, expanding by an average of 5 per cent annually between 2022 and 2025. This growth outpaced the global average of 3.5 per cent and Sub-Saharan Africa's 4.1 per cent during the same period. According to Principal Secretary for the National Treasury Chris Kiptoo, the performance was driven by improving economic conditions, rising government revenue, and increased investor confidence.
The growth was highlighted during the launch of the 34th World Bank Kenya Economic Update in Nairobi. Kiptoo, representing Cabinet Secretary for the National Treasury John Mbadi, cited figures that showed government revenue increased from KSh2.2 trillion in the 2021/2022 financial year to KSh3.2 trillion in the 2025/2026 financial year. This represents a significant increase in collections over the period, contributing to the country's economic expansion.
Foreign direct investment (FDI) in Kenya also saw a notable increase, doubling to US$3.2 billion in 2025. Kiptoo attributed this to improved investor confidence in the Kenyan economy. The report emphasized the importance of governance reforms in sustaining economic growth and creating quality employment opportunities. These reforms are seen as crucial for translating economic growth into better living standards for Kenyans.
Despite the positive economic indicators, informality remains a major challenge in the labour market. According to Kiptoo, 83.8 per cent of employment is still concentrated in the informal sector. The government has identified expanding productive employment opportunities and improving household incomes as key priorities. Policies that strengthen governance, improve the business environment, and support the creation of sustainable jobs are being considered.
The World Bank's continued engagement with Kenya was acknowledged by Kiptoo, who commended its country team led by Country Director Qimao Fan. The team has provided policy insights and independent assessments of the country's economic performance. The 34th Kenya Economic Update provides an assessment of the country's economic performance and examines policy priorities necessary to sustain growth, strengthen public institutions, and expand employment opportunities.
The report highlights the need for sustained efforts to address challenges in the labour market and to implement policies that support economic growth. The government's focus on governance reforms and improving the business environment is seen as critical in achieving these objectives. By addressing these challenges, Kenya aims to create a more sustainable and inclusive economic growth trajectory.
The findings of the report are expected to inform policy decisions and guide the government's efforts to translate economic growth into better living standards for Kenyans. The report's recommendations are also expected to contribute to the ongoing efforts to strengthen governance, improve the business environment, and support the creation of sustainable jobs in Kenya.
Key points
- Kenya's economy grew at an average annual rate of 5pc between 2022 and 2025.
- Government revenue increased from KSh2.2 trillion in the 2021/2022 financial year to KSh3.2 trillion in the 2025/2026 financial year.
- Foreign direct investment in Kenya doubled to US$3.2 billion in 2025.
