Kenya's National Bureau of Statistics (KNBS) released its annual economic survey in early May 2026. The country posted 4.6% growth in 2025, created 822,100 jobs and saw its stock market soar. But behind these positive indicators looms a record public debt of KSh 11,400 billion, with interest payments alone surpassing the combined health and housing budgets.
4.6% growth driven by diverse sectors
Kenya's economy grew 4.6% in 2025 (down from 4.7% in 2024), lifting nominal GDP to KSh 17.6 trillion. Top-performing sectors were accommodation and food services (+15.6%), mining and quarrying (+14.9%, reversing a -7.8% contraction in 2024) and financial services (+6.5%). Inflation eased to 4.1%, driven by lower energy prices.
822,100 jobs created, but 84% in the informal sector
The economy generated 822,100 net jobs in 2025, bringing total employment to 21.6 million. But 83.8% of these workers operate in the informal sector — 18.1 million individuals. The formal sector accounts for only 3.31 million jobs, highlighting the limits of structural transformation.
Nairobi stock exchange surges 56%
The NSE-20 index soared 56% year-on-year, reflecting renewed investor confidence. The shilling appreciated, though monetary transmission remains incomplete: despite the policy rate being cut from 11.25% to 9%, bank lending rates only fell from 16.89% to 14.82%.
The debt shadow
Kenya's public debt stands at KSh 11,400 billion. Annual interest payments — KSh 851 billion — alone exceed the combined health and housing budgets. Meanwhile, manufacturing grew only 2%, its weakest pace in five years — a warning signal for large-scale formal job creation.
Why it matters
Kenya remains the undisputed engine of East Africa. But its growth model shows its limits: a dominant informal economy, sluggish industry and a debt burden squeezing fiscal space. For Indian Ocean regional investors, macro-financial stability is real — but vigilance on debt sustainability is essential. The country has the fundamentals to accelerate, provided it secures its public finances.