Nairobi: Kenya has launched the 31st edition of the Kenya Economic Update and the Public Finance Review Report, with a renewed commitment to inclusive fiscal policy, sustainable growth, and economic resilience.
According to Kenya News Agency, the Cabinet Secretary for the National Treasury and Economic Planning, John Mbadi, emphasized Kenya’s dedication to sound fiscal policy and economic recovery. This includes strategic reforms and effective public finance management, despite ongoing global and local fiscal challenges.
At the launch event, held at the University of Nairobi, Mbadi stated, “At the heart of our Bottom-Up Economic Transformation Agenda is the commitment to strengthen economic activity by bringing down the cost of living, creating jobs, and fostering inclusive growth.” The event was attended by senior government officials, development partners, representatives from the International Monetary Fund, International Finance Corporation, the diplomatic community, economists, students, and academicians.
The report addresses the need to enhance public debt management, increase domestic revenue collection, and promote efficient spending through e-procurement. It also emphasizes the importance of digitalized pension systems and zero-based budgeting. Mbadi assured that the National Treasury has not introduced new taxes in the Finance Bill 2025, considering public sentiments following last year’s protests.
Mbadi urged the World Bank and other development partners to continue engaging with local academic and research institutions to ensure that policy recommendations reflect Kenya’s unique context and realities. He stated, “Together, let us work towards a future where economic growth is inclusive, equitable, and sustainable.”
Regarding Kenya’s current economic performance, Mbadi revealed a gross domestic product growth rate of 5.7 percent in 2023 and 4.7 percent in 2024, with projections showing an upward trend to 5.3 percent in 2025 and 2026. He credited the performance to resilience in the agriculture and services sectors, improved foreign exchange reserves, and a decline in inflation to 4.1 percent as of April 2025.
World Bank Division Director for Kenya, Rwanda, Somalia, and Uganda, Mr. Qimiao Fan, lauded Kenya for its fiscal consolidation efforts and commitment to implementing data-driven policies. “World Bank Division’s current portfolio in Kenya includes 25 national and 7 regional projects valued at USD 6.4 billion,” said Fan.
Naomi Mathenge, a senior economist, presented the economic update, noting a slowdown across all sectors, particularly in the industry sector. She attributed this to high interest rates that have dampened domestic demand. Mathenge emphasized the need for a more inclusive and efficient fiscal approach amid the shrinking fiscal space and increased demand for public investment.
The report’s key highlights include macroeconomic resilience, high domestic borrowing, poverty reduction, and inclusive growth in budget policy. Recommendations include streamlining tax incentives and digitizing revenue systems to curb leakages.
The event marked a significant milestone in Kenya’s pursuit of a transparent, inclusive, and evidence-driven approach to fiscal management, anchored in collaboration between government, academia, and development partners.