Kenya’s economic outlook is improving, with growth rising from 4.8% in 2022 to 5.2% in 2023, Prime Cabinet Secretary Musalia Mudavadi has announced. He noted that projections indicate even stronger growth in 2024, signaling a positive trajectory for the country’s economy.
Mudavadi also highlighted a significant drop in inflation, which fell from 9.2% in September 2022 to 3.5% in February 2025. He said these figures reflect positive growth in Gross Domestic Product (GDP) indicators, easing financial pressure on households.
“This has markedly reduced the cost of living and improved household incomes. Furthermore, the exchange rate has stabilized and interest rates have fallen, improving credit access to the private sector,” Mudavadi stated.
These economic gains come as the government conducts its Mid-term Review, an evaluation of its performance over the past two and a half years. The review aims to measure progress and refine strategies to improve service delivery across various sectors.
Reducing Dependence on Foreign Aid
Mudavadi stressed that the “New World Order”—shaped by shifting geopolitical dynamics, climate change, and global conflicts—is a wake-up call for Kenya to reduce its reliance on external aid and develop innovative ways to finance its budget.
He emphasized the need for prudent resource management within the government to enhance economic resilience.
“During the ninth review of our program with the International Monetary Fund (IMF), Kenya terminated the multi-year program, forgoing over Ksh.110 billion ($853.5 million) in budget and balance of payments support. To bridge this gap, we must tighten our belts as we pursue a new IMF program,” he said.
Mudavadi noted that growing Kenya’s internal resources is now a top priority.
“The biggest lesson we have learned from this experience is the urgent need to reduce our dependence on foreign aid. We must deal firmly with corruption, which remains the greatest threat to Kenya’s economic growth and social transformation,” he added.
To tackle corruption, Kenya has invited the IMF to conduct a Governance Diagnostic Assessment aimed at identifying weaknesses and corruption risks in key government functions essential for economic stability and growth.
Mudavadi revealed that an IMF team has completed a scoping mission, paving the way for a detailed governance assessment in June 2025.
“This will help us develop and implement a robust governance reform plan for the next few years,” he stated.
He called on leaders and institutions to support this initiative by providing accurate data and necessary information when requested.
Universal Health Coverage and Debt Settlements
Mudavadi acknowledged that Kenyans now have higher expectations of the government and emphasized that the administration remains committed to delivering on the Bottom-Up Economic Transformation Agenda (BETA).
A key focus of BETA is Universal Health Coverage (UHC). So far, over 20.6 million Kenyans have registered for the program, marking a major milestone in transitioning from the National Health Insurance Fund (NHIF) to the Social Health Authority (SHA).
However, he pointed out challenges in SHA eligibility, which is determined through means testing. Only four million Kenyans have completed the process, meaning 80% of registered members cannot fully access the program’s benefits.
“The solution is to enhance public awareness and engage stakeholders to onboard all Kenyans onto the SHA platform,” Mudavadi explained.
He also addressed the government’s commitment to settling historical NHIF debts owed to private healthcare providers. Over the past decade, these debts have accumulated to approximately Ksh.33 billion.
So far, the government has cleared Ksh.8.6 billion, and President William Ruto has assured that all verified debts will be settled, starting with amounts below Ksh.10 million, which make up 91% of creditors.
“Our focus is to restore healthcare services across the value chain while developing long-term strategies to ensure stability in the health sector,” Mudavadi said.
He added that the government is working with Members of Parliament and county governments to build and equip more public health facilities and hire additional healthcare workers.
Affordable Housing and Job Creation
Mudavadi also reassured Kenyans that the government is actively addressing concerns surrounding the Affordable Housing Agenda.
He highlighted major achievements, including the launch of 95,737 affordable, social, and institutional housing units across the country.
So far, the initiative has generated approximately 200,000 direct and indirect jobs and created business opportunities worth Ksh.4.4 billion for the Jua Kali sector and other small businesses.
“The key goal is to create sustainable opportunities for jobs, incomes, and shared prosperity. The government is committed to building 250,000 houses annually, and Kenyans will soon see how much affordable housing stimulates economic growth while ensuring fair resource distribution,” Mudavadi explained.
Government’s Commitment to Development
Mudavadi made these remarks on Wednesday at the Kenya School of Government, where he chaired the first National Development Implementation Committee (NDIC) meeting of 2025.
The meeting brought together top government officials, including representatives from the Office of the Head of Public Service and Principal Secretaries from all State Departments.
He emphasized the importance of accountability, acknowledging that Kenyans continuously remind the government of its responsibility to deliver on promises made under the Kenya Kwanza Administration.
“There is a need for us to engage more constructively with the people and persuade them to support us for another term, so we can achieve our vision of an industrialized and prosperous Kenya for all,” Mudavadi stated.
