A fragile economic moment as Kenya grapples with envisaged 2027 polls
NAIROBI: AS Kenya approaches its 2027 General Election, the country faces a number of interconnected economic issues that threaten both immediate stability and long-term growth.
Although some macroeconomic indicators point to resilience in GDP growth and inflation management, firms and households are still grappling with weak growth, heavy debt burdens, credit constraints and persistent unemployment.
Public trust in the economic path remains low, posing a major political risk as the campaign heats up, a position I personally witnessed while in Nairobi on Tuesday this week.
Kenya’s economy is expected to increase within a range of around 4.9 per cent to 5.2 per cent in 2026, indicating a little rebound after a period of weaker expansion.
This was disclosed during the Kenya Private Sector Alliance (KEPSA)’s 2026 Economic Outlook Forum, held in Nairobi in partnership with the Nairobi Securities Exchange (NSE) and KPMG.
This suggests official optimism that the economy is stabilising after local and international challenges. However, these growth rates indicate a slower pace of structural transition, as they remain below the historical norm of about 6 per cent.
Even with macro-level growth, not everyone is benefiting equally. Rural incomes are constrained by the fact that agricultural output, which employs a significant share of the population, grew by only 3.2 per cent.
Prior to recent reductions, high interest rates had reduced private-sector financing, which is essential for jobs and enterprises.
As a result, the economy is growing without significant structural change, meaning the majority of Kenyans remain unhappy with how the economy is run, and many do not benefit financially from the country’s progress.
The focus now shifts to the 2027 election. Most Kenyans are concerned about a range of issues, including low household incomes and living standards.
According to a lesson learned from Kenyans interviewed at Uhuru Park Gardens, there is a general decline in economic confidence, as evidenced by opinion polls.
According to a TIFA Research survey (see the survey report released on Dec 18, 2025, at 01:43 PM), 67 per cent of families believe their financial situation has worsened since the 2022 election. Just a tiny percentage reported feeling better or unaltered.
The lived economy remains a significant weakness for the government as we move toward 2027, even though the rate of decline may be moderating, and most households still feel worse off financially.
The economic narrative remains disproportionately pessimistic, and modest improvements have yet to result in a widespread recovery—TIFA 2025.
This perspective highlights a significant gap between headline growth estimates and real-world realities, and it is not merely political noise.
Respondents raised concerns about poverty, unemployment, high taxes, corruption, limited access to essential services such as health care, and issues with crime and government.
In a similar vein, 49 per cent of participants in another survey believe the economy will continue to worsen in 2026, underscoring mounting concerns about the future.
These perceptions are significant, particularly in the run-up to elections, as residents’ perceptions of their financial well-being influence their voting behaviour.
Growing discontent may lead to political instability or a decline in trust in the incumbent’s performance. Public debt and the associated servicing costs are among Kenya’s most urgent structural issues.
With interest payments consuming a significant share of government revenue, Kenya’s public debt remains at high risk of distress, according to numerous publications, including those from the World Bank and the IMF, which are used in economic analysis.
The two main issues are rising fiscal risks and debtto-GDP ratios that exceed the advised level. Additional issues include rising borrowing rates and reduced funding for infrastructure, education and health care.
Critics warn that the government’s domestic borrowing scheme may displace privatesector credit, raising borrowing costs for both consumers and enterprises.
Pressure from public debt makes it harder for the government to fund social safety nets and essential services, while also tightening fiscal policy, which may hamper economic growth.
This is a challenging balancing act, particularly in the run-up to elections, when public expectations are higher.
In Kenya, unemployment is still a persistent political and economic problem, particularly for young people.
In addition to lowering salaries, high unemployment increases societal unrest and puts pressure on governments to implement populist economic policies.
Perception surveys conducted by the-star.co.ke show a high level of public concern about job security and employment prospects, despite differences in official unemployment rates.
The surveys also show that 49 per cent of Kenyans believe the country’s economy will worsen in 2026.
A lack of strong job creation is directly caused by the low rate of private-sector credit growth, which the World Bank recognised as a barrier to private investment, contributes directly to a lack of robust job creation.
Much as Kenyans would like to be known to the public, rising food prices and living expenses remain major concerns for most Kenyans, even though headline inflation has recently decreased.
Household finances are being squeezed by gradually rising inflation, particularly in food and necessities.
Due to cost pressures, a growing number of households are turning to lending, particularly informal or digital borrowing, to make ends meet, which exacerbates household debt stress.
In addition to making daily living more costly, these financial strains reduce purchasing power as salaries stagnate. Pre-election economic difficulties are exacerbated by persistent governance issues.
Despite civil society and certain parliamentarians demanding greater accountability for the use of borrowed resources and public funds, debt transparency remains a significant problem.
For instance, discussions surrounding the Medium-Term Debt Management Strategy emphasise the need for enhanced monitoring and real-time public dashboards to increase public confidence in how loans are granted and disbursed, a signal showing governance issues are a major concern for Kenya’s resources.
Concurrently, the public’s annoyance with resource mismanagement has been heightened by scandals involving government agencies and news of pending legislation at the county level.
These ideas have the potential to erode investor trust and slow down regional economic growth. Beyond routine economic difficulties, Kenya also faces financial and administrative strains closely linked to election preparations.
The Independent Electoral and Boundaries Commission (IEBC) has expressed concerns about a substantial budget imbalance of approximately Sh22.9 billion, which jeopardises election preparations, including voter registration and educational initiatives.
Concerns regarding governance and institutional preparedness can be exacerbated by underfunding of important democratic institutions, which can also slow down the election process and cast doubt on the validity and fairness of the 2027 polls.
Political risk is directly correlated with economic concerns as national elections draw near. Voters become more volatile when they lose faith in institutions and incumbents amid public discontent with the direction of the economy.
According to polls, a large portion of Kenyans think the nation is headed in the wrong direction. Voters’ concerns about the expense of living have already been expressed in by-elections and mini-polls, which are a prelude to the national ballot.
In addition to ideology, promises of improved livelihoods and economic messages also play a role in coalition negotiations and internal party divisions.
Given these factors, political campaigns will focus heavily on economic performance; if structural issues are not addressed, opposition voices may gain traction, and political polarisation may worsen. In 2026, Kenya faces a crucial economic turning point.
Despite resilient inflation and GDP forecasts, millions of people face daily financial hardship due to deep structural issues such as high debt, poor job creation, public dissatisfaction, and enduring poverty.
These difficulties unfold against the high-stake backdrop of a national election cycle, in which voter preferences and governmental legitimacy are directly affected by economic conditions.
Economic concerns could escalate into political unrest if policymakers fail to demonstrate noticeable improvements in the lives of ordinary Kenyans before 2027. This underscores the importance and complexity of Kenya’s economic policy agenda.
