Graft reforms could unlock double-digit growth potential for Kenya - WB
A new World Bank report suggests that Kenya could achieve significant economic growth by implementing governance reforms to combat corruption. The report notes that graft increases public debt and discourages private investment.
Why it matters
Addressing systemic corruption is presented as a low-cost, high-impact strategy for Kenya to reach upper-middle-income status.
National Treasury Principal Secretary Chris Kiptoo speaking during the launch of Kenya Economic Update by World Bank in Nairobi Kenya could unlock substantial economic growth and raise household incomes by tackling corruption, according to the World Bank.
It said graft pushes up public borrowing needs, raises financing costs and weakens private investment.
In its latest Kenya Economic Update, released in Nairobi on Wednesday, the global lender identified corruption and collusion as major constraints to faster, more inclusive growth, arguing that governance reforms offer a relatively low-cost way to accelerate the country's economic transformation.
“Addressing governance constraints represents a significant and low-cost opportunity for accelerating growth as needed to achieve upper-middle income status,” the report says.
The report estimates that corruption and collusion widen Kenya's fiscal deficit by about two percentage points of gross domestic product annually, creating additional borrowing requirements that accumulate over time.
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