Prosperous Kenya : A Reform Agenda for Boosting Growth and Job

Overview & Synopsis

This report examines Kenya’s economic growth trajectory over the past two decades and proposes a reform agenda to achieve sustained, inclusive growth and job creation. While Kenya experienced average GDP growth of 4.5 percent between 2001 and 2025, accompanied by rising incomes, poverty reduction, and improved living standards, the report highlights emerging structural challenges that threaten long-term prosperity. Growth has been driven largely by services, public investment, and non-tradable sectors, while productivity gains, export competitiveness, and quality job creation have remained limited. The analysis identifies four interconnected constraints to growth: fiscal pressures stemming from rising public debt and deficits; external vulnerabilities linked to weak export performance and limited foreign direct investment; productivity challenges reflected in low-quality employment, weak firm growth, and stagnant wages; and climate-related risks that increasingly threaten economic stability and livelihoods. The report argues that addressing these constraints requires strengthening fiscal sustainability, improving trade integration and competitiveness, boosting private sector productivity and innovation, and enhancing climate resilience while leveraging Kenya’s green growth potential. It concludes that decisive policy reforms are essential to rebalance growth, accelerate economic transformation, create better-paying jobs, and support the country’s long-term development goals.