The World Bank has named corruption as a major obstacle to Kenya’s economic growth, warning that bribery and collusion are weakening public finances, increasing government borrowing needs and limiting the country’s development prospects.
In its Kenya Economic Update report released on Wednesday, November 4, 2026, the lender estimated that corruption costs the economy about 2 per cent of Gross Domestic Product (GDP) annually, largely through increased fiscal deficits that force the government to borrow more.
“Governance challenges are increasingly limiting Kenya’s prospects for faster and more broadly shared growth, with corruption as the key binding constraint,” the World Bank said.
The lender said that addressing corruption could unlock significant economic gains, create jobs and ease pressure on public debt.
The report highlighted the widespread extortion of small-scale traders and boda boda operators by county enforcement officers and traffic police, with demands for bribes and threats of arrest named as persistent challenges for informal sector workers.
World Bank identified Boda boda riders and informal market vendors, commonly known as mama mbogas, among the groups bearing the greatest burden of petty corruption.
Boda boda riders lose up to 20pc of daily earnings
The World Bank estimated that motorcycle taxi operators spend between 5 and 20 per cent of their daily earnings on bribes, translating to between Sh50 and Sh100 a day, although some face higher demands.
These payments add to the cost of running their businesses, which includes fuel, motorcycle import taxes, county levies and contributions to Savings and Credit Cooperative Organisations (Saccos).
The report estimated that boda boda operators earn an average of Sh1,100 daily, depending on their location and operating expenses.
Informal market traders, meanwhile, take home between Sh300 and Sh1,500 in average daily net income.
The additional costs reduce the earnings available to support their households and reinvest in their businesses, while raising the cost of operating within the informal economy.
Anti-graft reforms could boost growth by 8.7pc
The lender said Kenya stands to reap substantial economic benefits from stronger governance and anti-corruption measures.
Its modelling shows that moderate reforms could raise GDP by 8.7 per cent by 2035 compared with a scenario in which no reforms are implemented.
Additionally, the lenders says more ambitious changes could support the creation of an additional 7.7 million decent jobs.
World Bank raises 2026 growth forecast
The World Bank has revised Kenya’s economic growth projection for 2026 upwards to 4.6 per cent from its earlier estimate of 4.3 per cent.
However, the lender cautioned that the recovery remains vulnerable to rising energy costs, mounting fiscal pressures and unpredictable weather patterns, which could weigh on economic activity over the medium term.
Growth is projected to slow to 4.4 per cent in 2027 before improving to 4.8 per cent in 2028, remaining below the country’s economic potential.
The World Bank attributed some of the downside risks to disruptions in global energy markets linked to the conflict in the Middle East, which have pushed up fuel and transportation costs.
The possibility of erratic El Niño rainfall towards the end of the year also poses a threat to agricultural production and economic activity, potentially complicating the country’s recovery.
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