Corruption in Kenya taking massive toll on economic growth, warns World Bank

Corruption is costing Kenya billions of dollars each year in lost revenue, inflated business costs, and lost earnings for workers, while taking a huge toll on investment and economic growth, the World Bank said in a report published Wednesday. 

Issued on: 04/11/2026 - 15:43

Kenya suffers corruption at every level of society – from endless petty bribes paid to traffic police, to vast procurement scandals that go to the top of government, and it has contributed to massive protests over the past two years.

The World Bank report said the east African country is among the most corrupt of its peers among lower middle-income countries, and estimates that the governance weaknesses are adding around 370 billion shillings (€2.4 billion) every year to Kenya's fiscal deficit, equivalent to two percent of GDP.

This figure, which its authors describe as "conservative", comes from lost taxes, inefficient public spending, higher borrowing costs, and other issues caused by corruption.

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Ordinary Kenyans are furious over the levels of graft – the issue was a major part of the massive protests in mid-2024 when the government tried to raise taxes – and the World Bank notes that its people would be far more willing to contribute if they trusted their leaders.

The report's authors hope Kenya's politicians will wake up to the advantages of tackling the issue.

Its modelling shows Kenya's economy could be more than 20 times larger by 2035 if it introduced the sort of anti-corruption reforms seen in countries like Ghana and Senegal, and add 7.7 million more and better jobs.

"Kenya has a lot of the ingredients that it would take to be a really leading country in the region. And it should make good on that promise, both for its own citizens and for the neighbouring region. And it's feasible," Verena Fritz, lead governance expert for World Bank Kenya, told reporters.

Stalled anti-corruption measures

The World Bank finally approved its latest lending package to Kenya in June after it was stalled throughout 2025 because the government was dragging its feet on anti-corruption measures.

It has insisted on new rules against politicians' conflicts of interest, a new electronic procurement system, and the passing of a Whistleblower Protection Bill that has been stalled for years.

For now, though, the report showed that corruption is taking a massive toll on many aspects of Kenya's development.

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Kenya's electricity is far more expensive than some of its peers, it says, largely because only 24 percent of 42 power purchase agreements examined in a 2021 study were known to have gone through a competitive process.

Contracts for big infrastructure projects are often far pricier than they should be: the bank notes that the Nairobi-Mombasa railway line cost around a third more per kilometre than a similar line in neighbouring Tanzania.

Cleaning up just 10 percent of procurement losses could save Kenya 120 billion shillings (€830 million) a year, it added.

The issue is only getting worse: a World Bank survey found that 39 percent of Kenyan firms considered corruption a major or severe constraint to doing business in 2025 – up from 25 percent in 2013 – and 36 percent said they had been asked for a bribe at least once in the last year.

(with AFP)

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