Kenya’s economy under President William Ruto has shown significant improvement, according to the latest World Bank Country Policy and Institutional Assessment (CPIA) Report for 2025, which evaluates policy and institutional reforms across Sub-Saharan Africa.
The report indicates that Kenya’s overall CPIA score increased to 3.9 in 2024, up from 3.8 the previous year, placing the country above the International Development Association (IDA) average.
This enhancement was primarily driven by improved economic management, where Kenya achieved a score of 4.2.
A major factor contributing to Kenya’s economic performance was the issuance of a Eurobond in February 2024, which facilitated the early buyback of a US$2 billion Eurobond set to mature in June.
Word Bank Explains How Kenya’s Economy Improved from 2024
According to the World Bank, this action helped stabilize foreign exchange markets. As a result, the Kenyan shilling increased in value by 20 percent against the US dollar, recovering from a previous 30 percent drop after several months of instability.
International reserves also saw an increase, bolstered by higher remittances, exports, and foreign investments.
“Large maturity payments increase the risk of needing to roll over debt under tight credit conditions and can test public market liquidity, making debt service especially costly. The most extreme case in 2024 was Kenya, whose successful Eurobond issuance in February allowed for the early buyback of a US$2 billion Eurobond maturing in June, thereby calming the forex markets,” the report noted.
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The Central Bank of Kenya was credited for taking important steps to stabilize the economy. It changed interest rates and stopped funding budget deficits with loans.
These actions helped control inflation expectations. As a result, the overall inflation rate dropped to 2.7 percent by September 2024.
Other Factors That Led to Good Economic Performance
Kenya’s fiscal reforms also enhanced market confidence, contributing to the country’s avoiding an economic crisis despite strong adverse circumstances. This was partly driven by a stronger macroeconomic policy framework and access to concessionary financing, which helped stabilize the exchange rate.
The banking sector’s profitability indicators strengthened, leading to increased lending activities.
In 2024, financial access in Kenya rose, with 82.3 percent of adults using mobile money, and the gender gap in financial access narrowed.
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However, the World Bank identified ongoing challenges. Non-performing loans remained at 14.3 percent, raising concerns over banking stability, while governance issues in public financial management and transparency persisted.
The Bank urged Kenya to strengthen fiscal discipline, improve revenue collection, and address structural barriers to private sector growth. It stressed that long-term resilience will depend on sustained investment in human capital, infrastructure, and inclusive reforms.
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