NAIROBI, Kenya, Nov 3 – NCBA Group has lowered its economic growth forecast for Kenya in 2026 to 4.8 percent from an earlier projection of 5.1 percent, citing external shocks and domestic economic pressures.
The bank expects growth to remain between 4 and 5 percent in 2027, warning that geopolitical tensions, volatile commodity prices, changing weather patterns and the upcoming General Election could weigh on economic activity.
NCBA Group Managing Director and CEO John Gachora said the economy had remained resilient despite several shocks but warned that its ability to absorb further disruptions was limited.
“The year 2026 has been characterised by a convergence of shocks, including the crisis in the Middle East, the ongoing Russia-Ukraine conflict, a sudden tightening of monetary policy in several key economies and volatility in sovereign bond markets,” Gachora said.
He spoke during the NCBA Economic Forum 2026, where industry leaders called for stronger fiscal discipline and increased investment to sustain economic growth.
National Treasury Cabinet Secretary John Mbadi said Kenya’s economy grew by an average of 5 per cent between 2022 and 2025, while inflation stood at 7.3 per cent in October 2026.
He also cited the shilling’s average exchange rate of about Sh129.9 against the US dollar and foreign exchange reserves of $14.9 billion, equivalent to 6.1 months of import cover.
Mbadi said the government would need to maintain fiscal discipline, improve revenue collection and control public spending to protect these gains, particularly as debt interest payments and pension obligations put pressure on public finances.
The Treasury projects the economy will grow by 5.1 per cent in 2027, with inflation remaining within the target range and the shilling maintaining stability.
Mbadi said the government was also pursuing reforms to improve access to credit, including risk-based lending rates linked to the Kenya Shilling Overnight Interbank Average (KESONIA), modernising payment systems and restructuring the Credit Guarantee Scheme to increase lending to small and medium-sized businesses.
President’s Council of Economic Advisors Chairperson David Ndii said growth in agriculture, manufacturing and other sectors was showing signs of improvement, citing increased milk, sugar and coffee production, as well as vehicle registrations.
Ndii said the government was tracking an investment pipeline worth about $45.7 billion across infrastructure, manufacturing, agriculture and information and communication technology.
He also cited a proposed National Infrastructure Fund expected to mobilise $10 billion and a proposed $24 billion investment in the Lamu Port and oil complex.
The forum called for closer cooperation between government, businesses and development partners to attract investment, improve productivity and support job creation.
