NAIROBI, Kenya, Nov 5 – Corruption is costing Kenya between 1.2 percent and 4 percent of its Gross Domestic Product (GDP) annually through bribery, fraudulent schemes and inflated public procurement, the World Bank says.
In its latest Kenya Economic Update, the lender warns that corruption is undermining public finances by reducing government revenue, increasing expenditure and weakening the delivery of public services.
The report draws on findings from the Ethics and Anti-Corruption Commission (EACC), Auditor-General reports, court cases and other studies to estimate the scale of financial losses associated with corruption.
“Estimates of annual losses due to bribes, fraudulent schemes involving public and private parties, and overcharging in public procurement are substantial (between 1.2–4.0 percent of GDP).”
“The potential economic and social payoffs from anti-corruption reforms are substantial and attainable.”
The World Bank estimates that corruption and collusion may have increased Kenya’s annual fiscal deficit by about two percentage points of GDP through higher public spending and reduced revenue collection.
The report also links corruption to a deteriorating business environment. In 2025, 39 percent of firms identified corruption as a major or severe constraint to doing business, up from 25 percent in 2013. Additionally, 36 percent of firms reported experiencing at least one request for a bribe in the preceding year.
The Bretton woods institution warns that the economic consequences extend to investment, productivity and employment, as businesses face additional costs and uncertainty when accessing public services and opportunities.
It says improving control of corruption to levels recorded in Ethiopia or India could make Kenya’s economy more than 13 percentage points larger by 2035 compared with maintaining the status quo.
More ambitious reforms could raise GDP by over 20 percentage points, while household consumption could be up to 27 percent higher and create better employment opportunities for up to 7.7 million people.
The report argues that stronger enforcement, transparent public procurement and improved revenue administration are critical to reducing corruption-related losses and creating fiscal room for development spending.
