World Bank forecasts 4.6% Kenya growth in 2026, cites governance costs

Sunday 8th November 2026

By inAfrika Newsroom

The World Bank expects Kenya’s economy to grow 4.6% in 2026, after activity expanded 5.2% in the first half of the year, according to its latest economic update released on 4 November.

The 34th Kenya Economic Update says expansion has been supported by industry and services. The bank expects growth to ease to 4.4% in 2027 before rising to 4.8% in 2028, although it warned that external shocks and domestic governance weaknesses could affect those forecasts.

The report estimates that stronger governance could raise the level of Kenya’s gross domestic product by as much as 20% by 2035 compared with a weaker reform path. That is a modelling estimate of potential gains, not a forecast that the increase will occur.

Kenya’s public debt stood at 72.3% of GDP in August 2026, the bank reported. Interest payments absorb about one-third of government revenue, limiting room for public investment and services. Foreign exchange reserves were about $14.7 billion, equivalent to roughly 5.9 months of import cover.

The bank also found that 83.8% of jobs remain informal. It pointed to contract transparency, procurement practices and the cost of services such as power, logistics and land as areas where more predictable governance could reduce business costs.

The report’s findings distinguish near-term economic resilience from the longer-term changes needed to improve productivity and employment. They do not mean all governance reforms would produce immediate or evenly distributed economic benefits.

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