A recent report by the World Bank has revealed that corruption is a major obstacle to growth in Kenya, with a significant number of firms in the country reporting bribery requests. According to the 34th edition of the Kenya Economic Update, nearly 36% of firms in Kenya report having experienced at least one bribery request in the past year. This proportion is higher than that of its peers in Sub-Saharan Africa and upper middle-income economies.
The report highlights the extent of bribery in various sectors, with at least 22% of firms in Kenya expected to pay bribes to meet tax officials. Additionally, 41% and 29% of firms are expected to pay bribes to get electrical connections and construction permits, respectively. Verena Fritz, Lead Governance Specialist at the World Bank Group, noted that businesses in Kenya are burdened by various governance constraints, which reduce the economy's overall competitiveness.
Despite Kenya's economy being resilient, the country still faces fiscal pressures and governance constraints that limit growth and job creation. According to World Bank Division Director Dr. Qimiao Fan, the country's fiscal deficit accounts for 6.8% of GDP as of the end of the 2025/26 financial year, while public debt has hit Ksh 13.3 billion, equivalent to 72.3% of GDP as of August 2026.
The report also highlights the challenge of job creation in Kenya, with employment growing by 4% in 2025. However, 83.8% of jobs remain informal, with lower pay and productivity and limited protection for workers. Dr. Fan noted that the challenge is not only to manage fiscal pressure but to create more and better jobs.
To support the creation of sustainable jobs and reduce fiscal pressures, the government is keen to rationalize spending to reduce the overall fiscal deficit. Treasury Principal Secretary Dr. Chris Kiptoo stated that debt levels remain elevated, and the government is pursuing fiscal consolidation to bring the fiscal deficit to 4.6% of GDP by 2030/31.
The World Bank notes that the 5.2% growth registered in the first half of this year was supported by strong performance in the industry and services sectors, which expanded by 4.9% and 5.2%, respectively. This helped offset the slowdown in agriculture from 4.7% to 4.2%.
The report's findings highlight the need for the government to address corruption and governance constraints to promote economic growth and job creation. The World Bank's recommendations aim to support the government's efforts to create a more favorable business environment and promote sustainable economic growth.
Key points
- Corruption is a major obstacle to growth in Kenya, with nearly 36% of firms reporting bribery requests.
- The country's fiscal deficit accounts for 6.8% of GDP, while public debt has hit Ksh 13.3 billion.
- The government aims to reduce the fiscal deficit to 4.6% of GDP by 2030/31 and create more and better jobs.
