Kenya Report 2023

Kenya is emerging from the economic impact of the COVID-19 pandemic, the war in Ukraine and global monetary policy tightening. Kenya’s government is implementing subsidy cuts, broader austerity measures, and tax increases, as part of bold IMF-backed fiscal and monetary policy changes that are aimed at slowing inflation, cutting the budget deficit, and bringing public debt to more sustainable levels.

The outcome of these reforms, along with privatisations of state assets and new loans for small businesses and farmers, should improve Kenya’s economic outlook in coming years. In the meantime, multilateral and development finance support, as well as alternative financing solutions, will be crucial to fund the balance of payments and allay investor concerns over a possible sovereign default, which is improbable at least in the one-year outlook.