Growth is up, the shilling is steady, and borrowing costs have eased — yet millions of Kenyans are not feeling any of it.
By Viola Otieno
Kenya’s economy is performing better on paper than it has in some time. Real GDP grew by 5.3 per cent in the first quarter of 2026, up from 4.9 per cent in the same period last year, with manufacturing, construction, mining, and hospitality all recording positive growth. The Central Bank of Kenya now forecasts full-year growth of around 5 per cent — an upward revision from earlier estimates. The shilling has held steady and borrowing costs are lower than they were twelve months ago.
These are real achievements. They are also insufficient.
Inflation reached 6.5 per cent in September 2026, its highest level since January 2024, driven by rising processed food prices and global fuel disruptions linked to Middle East conflicts. The government has responded with fuel subsidies and a temporary VAT cut, measures the CBK says are containing the pressure — but households feel it daily at the market and on supermarket shelves.
The debt picture is starker. Total public debt is approaching KSh13 trillion, with the debt-to-GDP ratio at roughly 67.6 per cent. Debt servicing has consumed nearly 80 per cent of tax revenue this fiscal year, squeezing spending on hospitals, schools, and social programmes ordinary Kenyans depend upon.
Most troubling is the jobs gap. The World Bank notes that Kenya’s growth is not generating sufficient formal employment and that real incomes have fallen in recent years. Youth unemployment remains acute while the working-age population expands rapidly — a combination raising the risk of social unrest as the 2027 election cycle approaches.
Kenya’s economy in late 2026 is undeniably stronger than before. But growth that never reaches people’s pockets will eventually exhaust its political welcome.
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