KENYA'S ECONOMY REMAINS RESILIENT IN 2024 DESPITE MIXED SECTOR PERFORMANCE

KENYA'S ECONOMY REMAINS RESILIENT IN 2024 DESPITE MIXED SECTOR PERFORMANCE

Story by Stella Ranji 

Nairobi, June 10, 2025 — Kenya’seconomy demonstrated resilience in 2024, registering a real Gross Domestic Product (GDP) growth of 4.7%, despite headwinds in the construction and mining sectors. The performance, while slightly down from the revised 5.7% growth in 2023, reflects robust activity in key areas such as services, agriculture, and finance.

According to official economic data, the services sector led the charge, contributing 61.1% of GDP, buoyed by notable performances in Financial and Insurance Activities (7.6%), Real Estate (5.3%), and Transportation and Storage (4.4%). Agriculture, Forestry, and Fishing also made a significant contribution at 22.5%, an improvement from 21.5% in 2023, driven by favorable weather and government-supported inputs such as subsidized fertilizer and seeds.

However, not all sectors thrived. Construction activity contracted by 0.7%, reversing a 3.0% growth in 2023, largely due to reduced production of key materials like titanium, salt, and gemstones. Mining and quarrying fared even worse, shrinking by 9.2%, further highlighting vulnerabilities in Kenya’s extractive industries.

Economic Indicators Signal Stability
Kenya’s nominal GDP rose to KES16.22 trillion in 2024 from KES15.03 trillion the previous year. Per capita GDP increased to KES309,460, up from KES291,770 in 2023. Gross National Disposable Income also improved, reaching KES16.99 trillion in 2024.

Private final consumption expenditure rose to KES12.48 trillion, up from KES11.46 trillion in 2023, while government final consumption increased to KES1.81 trillion. The outlook for 2025 remains positive, supported by a stable macroeconomic environment and expected resilience in core sectors.

Inflation and Monetary Policy
Inflation cooled significantly to 4.5% in 2024 from 7.7% in 2023 — the lowest rate in five years. This was attributed to lower food and energy prices, as well as reduced global inflation pressures. The Central Bank of Kenya responded by lowering the Central Bank Rate (CBR) to 10% in April 2025, down from 11.25%, with the 91-day Treasury bill rate falling to 10.32% by December 2024.

Inter-bank rates and commercial bank lending rates showed marginal improvements, contributing to increased credit availability. These monetary policy shifts are expected to stimulate private sector activity further in 2025.

Exchange Rate Recovery
The Kenyan Shilling made a notable recovery against major international currencies in 2024, appreciating against the US Dollar, Euro, Pound, and regional currencies such as the Tanzanian and Ugandan Shillings. The Trade Weighted Index (TWI) improved from 138.25 in 2023 to 129.99 in 2024, signaling enhanced currency stability.

This resurgence was partly driven by renewed investor confidence and the successful issuance of a $1.5 billion Eurobond at a 9.75% yield, which also helped refinance part of the maturing $2 billion 2024 Eurobond. Increased demand for local Infrastructure Bonds by domestic investors also played a role by freeing up foreign currency supply.

Public Debt and Fiscal Position
Kenya’s public debt stood at KES9.96 trillion at the end of June 2024, with external debt comprising 50.9% of the total. While multilateral debt rose slightly, bilateral debt declined significantly from KES1.26 trillion in June 2023 to KES1.09 trillion in June 2024.

The debt sustainability analysis by the International Monetary Fund (IMF) classified Kenya as a “medium performer,” with debt levels still deemed sustainable. However, the risk of distress remains, particularly in the face of global economic shocks or policy missteps.

For the fiscal year 2024/25, government revenue is projected to increase by 13.4% to KES3.12 trillion, comprising KES2.54 trillion in tax revenue, KES529.6 billion in non-tax revenue, and KES50.3 billion from grants. Total expenditure is expected to rise to KES3.98 trillion, resulting in a projected budget deficit of KES862.7 billion.

OUTLOOK

With inflation under control, a stable currency, and consistent GDP growth, Kenya’s economic fundamentals appear solid heading into 2025. However, addressing sector-specific challenges—particularly in construction and mining—will be crucial to ensuring inclusive and sustained growth. A continued focus on fiscal discipline and debt management will also be key to preserving economic stability in a globally uncertain environment.





Popular posts from this blog

Global Leaders Convene in Nairobi to Forge Path for Climate-Resilient Africa

Image
Global Leaders Convene in Nairobi to Forge Path for Climate-Resilient Africa By Stella Ranji  Nairobi, Kenya – June 30, 2025 — A diverse coalition of global leaders, scientists, faith leaders, and grassroots actors convened in Nairobi today for the opening of the Vatican African Conference on Climate Resilience, a landmark summit aimed at designing a new era of climate adaptation rooted in equity, local knowledge, and science. Hosted at CIFOR-ICRAF, the two-day summit (June 30 – July 1) marks a pivotal step toward shaping a climate-resilient Africa, with an emphasis on decentralising climate policy and financing to reach the continent’s most vulnerable communities. The gathering is co-convened by the Pontifical Academy of Sciences (PAS) and the Pontifical Academy of Social Sciences (PASS), in collaboration with the Network of African Science Academies (NASAC) and other regional and international partners. At the heart of the conference is a call for urgent, inclusive, a...
Read more

Cricket Kenya Launches CK T20 League to Honour Past Glory and Usher in New Era

Image
Cricket Kenya Launches CK T20 League to Honour Past Glory and Usher in New Era By Stella Ranji  NAIROBI, August 27, 2025  In a bold move to revive the nation's cricketing legacy and propel the sport into a new era, Cricket Kenya (CK) on Wednesday officially launched the CK T20 League, a franchise-based tournament set to begin this November in Nairobi. The league will pay tribute to Kenya’s golden generation of cricketers — the national teams of 1996 to 2003, who famously elevated the country to global prominence, including a historic semi-final appearance in the 2003 ICC World Cup. The new T20 competition aims to not only honour those achievements but also develop the next wave of cricketing talent in Kenya and across the African continent. The initiative comes after the signing of a lucrative partnership between Cricket Kenya and AOS Sport Tournament, a Dubai/India-based sports promotion company. The collaboration is expected to inject professionalism, visibility,...
Read more

KISM Reaffirms Commitment to Digitizing Public Procurement through EGP System Rollout

Image
KISM Reaffirms Commitment to Digitizing Public Procurement through EGP System Rollout By Wilson Amondo  Nairobi  September 3, 2025 The Kenya Institute of Supplies Management (KISM) has reaffirmed its strategic support for the nationwide rollout of the Electronic Government Procurement System (EGPS), positioning supply chain professionals as a critical pillar in modernizing and professionalizing public procurement in Kenya. As a statutory body established under the Supplies Practitioners Management Act (SPMA) No.17 of 2007, KISM is mandated to register, license, train, discipline, and regulate supply chain professionals across the country. With over 28,000 members, the Institute is playing a leading role in facilitating the end-to-end digital transformation of procurement processes. “The rollout of EGPS is not just a government directive—it is a necessary evolution,” said the Institute in a statement released after the recent Heads of Procurement Forum held from Aug...
Read more