NAIROBI, Kenya- Kenya could create up to 7.7 million more and better jobs by 2035 if it implements ambitious anti-corruption reforms, according to a new World Bank assessment that identifies governance failures as a major brake on growth, investment and household incomes.
The World Bank’s latest Kenya Economic Update says corruption is increasingly constraining the country’s efforts to achieve faster and more broadly shared growth, weakening revenue collection, raising the cost of public borrowing and making it more expensive for firms to do business.
Under a moderate reform scenario, the report estimates that stronger control of corruption could lift Kenya’s GDP by 8.7 per cent by 2035 compared with a no-reform path.
Under stronger reforms, GDP could be 22.3 per cent higher.
The bank said the gains would extend beyond headline growth, with ambitious reforms potentially increasing household consumption by up to 27 per cent and creating 7.7 million additional job opportunities by 2035.
The estimates are based on economic modelling and are not a forecast of automatic job creation.
They depend on sustained reforms that reduce leakages, improve public-sector accountability and make it easier for firms and workers to operate without bribery, delays or preferential treatment.
Firms cite corruption as a major obstacle
The report found that 39 per cent of Kenyan firms considered corruption a major or severe constraint in 2025, up from 25 per cent in 2013.
It also found that 36 per cent of firms had experienced at least one bribery request in the previous year, while medium-sized businesses were particularly exposed.
Nearly half of medium-sized firms, 48 per cent, said they were expected to give gifts to “get things done,” compared with 36 per cent of small businesses and 31 per cent of larger firms.
The World Bank said firms exposed to bribery were more than 30 per cent less likely to introduce innovations and recorded lower growth in labour productivity and sales.
The report linked corruption risks to interactions involving tax administration, licensing, public utilities, public procurement and the courts.
It warned that collusion and the preferential treatment of politically connected firms could reduce competition, discourage investment and shut out more productive businesses.
Cost to informal workers
The burden is also borne by informal workers, who account for 83.8 per cent of Kenya’s workforce.
According to the report, traders, vendors, drivers and other informal workers frequently face demands for bribes from frontline officials, including traffic police and municipal inspectors.
Such payments can consume up to 20 per cent of daily earnings for some workers.
The World Bank said this “corruption tax” reduces household incomes, makes livelihoods more uncertain and limits the capacity of small businesses to invest, expand and hire.
It also linked governance weaknesses to wider fiscal deficits, estimating that the combined effect of weaker revenue collection, inefficient public spending and higher borrowing costs could add about two percentage points of GDP to annual deficits.
Reform agenda
The report calls for full implementation of the 2025 Conflict of Interest Act, greater transparency in public procurement and power-purchase agreements, and public access to verified beneficial ownership information.
It also recommends fully rolling out electronic government procurement, publishing more project data, following up on Auditor-General recommendations and strengthening merit-based appointments in public institutions.
For businesses, the World Bank proposes more transparent tax administration, reduced face-to-face interaction with officials, faster dispute-resolution channels and better digital systems for licences, refunds, audits and regulatory approvals.
The report further urges reforms aimed at reducing bribe demands faced by informal workers, including clearer rules for small businesses, reduced discretion by enforcement officers and stronger engagement with trader and transport associations.
The World Bank said the reforms would require political leadership and consistent implementation, but argued that the potential economic gains were within Kenya’s reach.
It noted that the levels of corruption control assumed under its moderate and stronger scenarios have already been achieved by countries including Tanzania, Côte d’Ivoire and India.
