NCBA warns of slower growth in 2027 amid economic risks

The NCBA Group has revised its growth forecast for Kenya's economy in 2026 downward to 4.8 percent from a previous prediction of 5.1 percent. The bank anticipates that growth will continue between 4 to 5 percent in 2027, warning that geopolitical tensions, fluctuating commodity prices, unpredictable weather conditions, and the upcoming general elections could hamper economic progress.

NCBA Group's Managing Director and CEO, John Gachora, highlighted the resilience of the economy despite numerous shocks, including the Middle East crisis, the Russia-Ukraine conflict, monetary policy tightening in key economies, and volatility in sovereign bond markets. During the NCBA Economic Forum 2026, industry leaders urged for more fiscal prudence and increased investment to sustain economic expansion.

The National Treasury's Secretary, John Mbadi, reported that Kenya's economy expanded by an average of 5 percent from 2022 to 2025, with inflation at 7.3 percent in October 2026. He also mentioned that the Kenyan shilling averaged around Sh129.9 per US dollar and foreign exchange reserves of $14.9 billion, covering six months of imports.

The government aims to uphold fiscal discipline, enhance tax collection, and curb public spending to safeguard these achievements, particularly as debt interest payments and pension obligations strain public finances. The Treasury projects a 5.1 percent growth rate in 2027, with inflation staying within target levels and the shilling remaining stable.

The government is also pursuing reforms to boost credit access, such as interest rates based on credit risk, advancing payment systems, and restructuring the Credit Guarantee Scheme to lend more to small and medium-sized enterprises. David Ndii, Chairperson of the President's Council of Economic Advisors, noted improvements in growth across agriculture, manufacturing, and other sectors, citing boosted milk, sugar, and coffee production, as well as vehicle registrations.

Ndii also pointed to an investment pipeline worth around $45.7 billion in infrastructure, manufacturing, agriculture, and information and communication technology. Additionally, a proposed National Infrastructure Fund aimed to raise $10 billion, and a projected $24 billion investment in the Lamu Port and oil complex were mentioned.

The forum emphasized the need for better collaboration among government, businesses, and development partners to draw in investment, enhance productivity, and promote job creation.