The World Bank’s 34th Kenya Economic Update warns that corruption remains the biggest obstacle to Kenya escaping middle‑income status, highlighting widespread bribery demands on businesses.

Nearly 36% of Kenyan firms reported at least one bribery request in the past year, a proportion higher than that recorded in other Sub‑Saharan African and upper‑middle‑income economies.

The update estimates that 22% of firms are expected to pay bribes to meet tax officials, while 41% face bribery demands for electrical connections and 29% for construction permits.

World Bank Lead Governance Specialist Verena Fritz said these governance constraints burden businesses and reduce overall economic competitiveness.

Division Director Dr Qimiao Fan noted that despite Kenya’s resilient economy, fiscal pressures and governance constraints are limiting growth and job creation.

Kenya’s fiscal deficit stood at 6.8% of GDP at the end of the 2025/26 financial year, with public debt reaching Ksh 13.3 billion (72.3% of GDP) as of August 2026.

Treasury Principal Secretary Dr Chris Kiptoo said the government aims to bring the fiscal deficit down to 4.6% of GDP by the 2030/31 fiscal year through spending rationalisation and debt management.

Kiptoo also highlighted that while employment grew 4% in 2025, 83.8% of jobs remain informal, underscoring the challenge of creating quality, formal employment.