Kenya is losing an estimated KSh194 billion ($1.5 billion) annually to corruption, illicit financial flows, and inefficient public spending, according to the African Development Bank’s (AfDB) latest Kenya Country Focus Report.
The report highlights a broader pattern of fiscal mismanagement, including KSh650 billion in annual public expenditure inefficiencies and KSh105 billion lost through tax waivers and exemptions.
These gaps are contributing to a mounting debt crisis and are diverting funds from critical sectors like education and healthcare.
The AfDB attributes part of the problem to state capture, weak oversight, and a fragile rule of law, which discourage both foreign and domestic investment. Kenya ranks 121st out of 180 countries in the 2024 Transparency International Corruption Perceptions Index, still below regional and global averages.
Despite these governance challenges, the AfDB projects Kenya’s GDP to grow by 5% in 2025, driven by agriculture and services, though this growth is expected to slow slightly in 2026.
However, concerns persist about inequality, poverty, and unemployment undermining inclusive development.
The report calls for stronger legal institutions, better governance, and fiscal discipline to curb losses and restore investor confidence.
Image credit: Metropol TV
