Kenya’s economy showed signs of resilience in 2024 with a real GDP growth of 4.7 percent, a moderate dip from the 5.7 percent recorded in 2023, according to PKF Kenya’s latest economic outlook. The growth was driven by strong performance in services and a steady rebound in the agriculture sector, yet contraction in construction and mining raised concerns over sectoral imbalances.
Agriculture, Forestry and Fishing expanded by 4.6 percent, up from 6.6 percent in 2023, contributing 22.5 percent to the country’s GDP. Financial and Insurance activities also posted robust growth at 7.6 percent, while the real estate and transport sectors grew by 5.3 percent and 4.4 percent respectively. However, the construction sector contracted by 0.7 percent, and mining and quarrying saw a steep 9.2 percent decline, reflecting reduced output of key minerals.
Kenya’s nominal GDP rose from KES 15 trillion in 2023 to KES 16.2 trillion in 2024, while GDP per capita increased to KES 309,460. Consumer spending remained strong, with private final consumption hitting KES 12.48 trillion, up from KES 11.46 trillion the previous year.
The macroeconomic environment remained relatively stable. Year-on-year inflation dropped to a five-year low of 4.5 percent in 2024, driven largely by falling food prices. Interest rates also showed a downward trend; the Central Bank Rate was reduced to 10 percent in April 2025 to spur economic activity. The 91-day Treasury bill rate declined significantly from 15.7 percent in 2023 to 10.32 percent in 2024, and further down to 8.29 percent by May 2025.
PKF highlighted a notable appreciation of the Kenyan Shilling, attributed to increased investor confidence, successful Eurobond refinancing, and a strong performance of infrastructure bonds. The Shilling gained against most major currencies, especially within the East African region.
However, PKF warned that Kenya’s growing public debt remains a concern. By June 2024, the national debt stood at KES 9.95 trillion. Despite a slight easing due to currency appreciation, interest payments are projected to hit nearly KES 1 trillion in the 2024/25 fiscal year. While multilateral debt—particularly from the IMF—increased, bilateral debt fell, except for U.S. lending which surged due to the conversion of guaranteed loans into actual debt.
On taxation, PKF noted the government’s efforts to expand the tax base, having added 1.2 million new taxpayers and raised KES 24.6 billion through the Tax Base Expansion Strategy in FY 2023/24. Nonetheless, the gap between eligible and actual taxpayers remains wide.
The 2025 Finance Bill has stirred debate with proposals to limit tax incentives, restrict tax loss carry-forward to five years, and repeal investment deductions—measures PKF warns could hurt capital-intensive sectors. The firm also raised red flags on a proposal to allow the tax authority access to trade secrets and customer data, citing privacy and ethical concerns.
PKF emphasized the need for better implementation of the National Tax Policy and Medium-Term Revenue Strategy to enhance predictability and support long-term planning.
While Kenya’s economy is expected to remain stable in 2025, PKF urged caution, noting that policy consistency, debt sustainability, and balanced taxation will be key to sustaining growth.