Wednesday, June 25,
2025 - The World Bank has warned President William Ruto that Kenya’s heavy
involvement in commercial enterprises is stifling private sector growth and
distorting fair market competition.
In its Levelling the Playing Field report released on
Tuesday, June 24th, the Bank said state-owned enterprises (SOEs)
enjoy regulatory advantages that undermine private firms.
The report revealed that more than half of Kenya’s major
businesses are government-run, often operating in sectors where private
entities could provide services more efficiently.
It cited hospitality, manufacturing, and retail trade as
areas where private investment would likely perform better.
However, the World Bank noted that Kenya is not alone in
this challenge.
Countries such as Ethiopia, South Africa, Uganda, and Ghana
also face similar issues, with state enterprises enjoying disproportionate
regulatory benefits. In Kenya, Uganda, and Ghana, SOEs operate in over half of
all sectors, further limiting private sector prospects.
The lender also raised the alarm over Kenya’s rising public
debt.
It warned that unsustainable borrowing is reversing economic
gains and weakening the link between growth and poverty reduction.
Alongside Ethiopia and Ghana, Kenya is grappling with high
sovereign debt levels in 2024.
This follows a May 27th report warning Kenya
could default on its loans unless it urgently addresses corruption, with
potential consequences including a 6% rise in poverty levels.
The Kenyan DAILY POST
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