Towards a Fairer and More Just Economic System in Kenya: KESA 4th National Economics Debate (2025)

 

A speech by Peter Gakunu , former Executive Director of the IMF,  Economic Secretary & Director of Planning, Senior Advisor Office of the President Kenya Government and Director ACP Group at the 4th Annual KESA National Economics debate at Machakos University at Which Liberty Sparks was a partner and sponsor. 

Opening and Purpose
Good morning, ladies and gentlemen. Thank you to Machakos University and the Kenya Economics Students Association for this gracious invitation. I am honored to interact with you
at this 4th National Economics Debate. I stand here not only as a former IMF Executive
Director and public servant, but as a fellow Kenyan who has walked the halls of policy and the
streets of our communities.
I greet you all. I see in this hall the future of Kenya’s economy: bright students, dedicated
academics, and practitioners. My heart is full of optimism knowing we can have an honest
inter-generational dialogue. I come with decades of experience in macroeconomic
management and governance, but I also come as a lifelong student eager to learn from your
fresh perspectives.
Our theme today is “Towards a Fairer and More Just Economic System in Kenya.” Let me be clear at the outset: this is not just an abstract topic for me – it is a personal mission. I’ve seen how economic decisions made in boardrooms affect lives in classrooms, clinics, and
marketplaces. I have seen when policies succeed in uplifting people, and when they fail the
test of fairness. I believe deeply that an economy must work for all its citizens, not just a few.

My goal this morning is to inspire and challenge us to build an economy grounded in fairness
and justice. I will draw on Kenya’s past journey, analyze where we stand today, and outline
practical steps – a kind of roadmap – to move forward. Throughout, I’ll weave in human
stories and data, because numbers alone can’t capture why fairness matters – but people’s
lives do.
By the end of this talk, I hope we all feel a renewed sense of purpose. Whether you are a
student aspiring to public office, a lecturer shaping young minds, or a professional in the field,
we each have a role in making our economic system more just. Let us commit to that shared
purpose today.

The Historical Continuum: From Independence to Inclusion
Let us begin by looking back. When Kenya gained independence in 1963, the struggle had
been about more than flags and anthems – it was deeply about fairness and economic justice.
The clarion call of the freedom fighters was “Land and Freedom!” – political self
determination and the right of Kenyans to regain control of resources and opportunities. The
founding vision of our early leaders, articulated in principles of African Socialism, emphasized
eliminating poverty, illiteracy, and disease. In essence, the promise of independence was that
every Kenyan would have a fair shot at prosperity in our new nation.
In those early decades, we made some strides. The government expanded education and
health facilities, and community self-help spirit – Harambee – built schools and clinics across
the country. Many families saw their first generation attend university, and smallholders
gained from programs like cooperative marketing of coffee and dairy. Fairness and inclusion
were north stars guiding these efforts.

Yet, as the years went on, the practice often fell short of the promise. Economic power
became concentrated among a few. By the 1970s and 80s, cracks had appeared: corruption
and patronage networks meant opportunities were not equally shared. Certain regions that
had been favored in colonial times continued to advance faster than others. The ideal of
fairness – the Mau Mau dream that all children of Kenya would enjoy the nation’s wealth –
was not fully realized.
The very land and freedoms that Mau Mau fighters shed their blood for were not fully secured
for all. Historical injustices in land ownership remained largely unaddressed, and new
inequalities took root. A wealthy few amassed large farms and businesses, while many
landless families, especially in the Coast and Rift Valley, waited for the fruits of independence.
Corruption and “crony capitalism” crept in early – favoritism toward those connected to
power, often called the “inner court” back then, meant not everyone had an equal chance.
So even as the economy grew, the benefits did not reach the wananchi evenly. The promise
vs. practice gap began to show.

Then came the 1980s/90s and the era of Structural Adjustment Programs (SAPs). Facing debt
and stagnation, Kenya underwent painful reforms – currency devaluation, removal of
subsidies, trimming of public jobs. Those steps stabilized the economy, yes, but at a high social
cost. Many poor Kenyans bore the brunt: user fees in hospitals, fewer jobs for the youth, and
a widening gap between rich and poor. We liberalized markets, but fairness as a priority was
somewhat lost in that harsh prescription. The social safety nets just weren’t there yet, and
inequality deepened. In those tough years, ordinary Kenyans often asked, “Where is the
justice in this economic system? Who is it really working for?”

Economic policy is never neutral. Every choice about taxation, about spending, about
regulation, about debt creates winners and losers. The question is not whether our policies
will have distributional consequences—they always do. The question is whether those
consequences align with our values. Whether they move us toward fairness or away from it.
Whether they honour the promise of independence or betray it.
Fast forward to the 2000s: Kenya experienced a renaissance of hope. A new democratic space
in politics allowed fresh ideas on economic reform. Vision 2030 was launched in 2008,
painting a picture of Kenya as a middle-income country with inclusive growth. We anchored
that vision on three pillars – economic, social, and political. Notably, the social pillar explicitly
aimed for a “just and cohesive society enjoying equitable social development.” Fairness was
formally back on the agenda.

Soon after, the 2010 Constitution of Kenya cemented equity and inclusiveness in law –
introducing a devolved system of governance to address regional imbalances. We created 47
county governments to bring resources and decision-making closer to the people, so that
historically marginalized areas could catch up. The constitution’s values – human dignity,
equity, social justice – reflect exactly the fair economic system we are discussing today.
So there has been a continuum: from independence to today, Kenyan discourse has always
valued fairness and inclusion. But there have also been discontinuities – moments where our
policies didn’t live up to those ideals. For example, we celebrated high GDP growth in some
years, but unemployment among the youth remained painfully high. We saw modern
highways constructed, even as some communities lacked clean water. This contrast between
promises and practice has been our challenge.

And yet here we are in 2025, still grappling with deep inequalities with the promise unfulfilled
for too many Kenyans. It begs the question – why? Why does the promise still outrun the
practice? It is a question for us economists and for all Kenyans. Part of the answer lies in
policies and implementation, yes. But part of it, I would argue, lies in our values and
governance. Somewhere along the journey, the moral compass of our economy lost true
north. We celebrated GDP growth but ignored who was left behind. We assumed a “trickle
down” that never quite trickled far enough – BOTTOMS UP economics of yester years and the
hustler and dynasty narrative of yesterday.

Let me highlight one telling fact: nearly 40% of Kenyans live below the poverty line to this
day[1]. That’s roughly 20 million people unable to meet basic needs[2]. This, despite decades
of development plans. Think of what that means: the dreams of independence – that every
Kenyan would live in dignity and comfort – are still unfulfilled for almost half our brothers and
sisters. At independence, poverty was extreme but we were hopeful to eradicate it. Today,
we have modernized in many ways, yet millions of children go to bed hungry or drop out of
school due to poverty. It forces us to ask: Where did we deviate? How can we do better going
forward?

The lesson I draw from our history is this: fairness and justice have always been the right
goals, but we must constantly renew our commitment to them. Economic models changed – from state-led, to market-led, to the devolved hybrid we have now – but fairness must be
the constant yardstick by which we judge each model. Each generation of Kenyans has fought
its own battle for fairness. Our grandparents fought colonial exploitation; our parents pushed
for multi-party democracy and constitutional reform; now it falls to us to fight against
economic exclusion, inequality, and corruption.

Today, we stand at another junction. We have the benefit of hindsight and the foundation of
a progressive constitution. We know what has worked and what hasn’t. It is up to us –
especially you, the young economists – to not repeat mistakes but to truly actualize the
dreams of our forbearers. I believe we can, because Kenya’s story is one of resilience and
reinvention. We have bounced back from turmoil before. And now, with eyes open to past
shortcomings, we can deliberately steer toward an economy that is fairer and more just than
ever before.

In summary, our history teaches us that the pursuit of economic justice is not new – it runs
like a thread through Kenya’s narrative. The task of our time is to finally deliver on that
promise. Let’s use that historical perspective as motivation: we owe it to the freedom fighters
in the forests, and to the children in our classrooms today, to build the fair society envisioned
at independence.

Fairness as an Economic Engine
Now, why focus on fairness? Some may think of fairness as merely a moral issue or a luxury
for wealthy nations. I argue the opposite: fairness is an economic engine for growth and
stability. It is not charity or soft-hearted idealism; it is efficient, and it is necessary for long
term prosperity.

First, consider efficiency. An economy cannot reach its full potential if large segments of its
people are left behind. When a bright child from a poor family cannot afford secondary school
education, we potentially lose a doctor or an engineer –that’s not smart, that’s wasted talent,
a hit to our human capital. When a small entrepreneur with an innovative idea is shut out of
credit markets because of who they are or where they live – that’s inefficient, that’s a business
that never grows, jobs never created. Fairness in access – to education, to finance, to markets – means we use all our country’s talents and ideas, smartly and efficiently. It’s like a football
team: you wouldn’t bench half your best players and expect to win. In the same way, an
economy that empowers all its people will outperform one that favors only a few.

Next, trust and social stability. Fairness breeds trust in institutions, and trust is the invisible
fuel of economic life. Think about taxation: if citizens believe the tax system is fair – that
everyone pays their due and the money is spent on public good – they are more willing to pay
taxes. Compliance improves, and government revenue rises without coercion. Conversely, if
people perceive the system as rigged – say, big companies or the well-connected not paying
their share, or taxes being wasted through graft – then even honest folks feel cheated and
may evade paying. Kenya today struggles with this: only a small fraction of our businesses and
individuals are in the formal tax net, and part of the reason is a trust deficit. Fairness can fix
that. A fair tax policy (we’ll discuss specifics later) would broaden our tax base and increase
revenue simply by improving goodwill and voluntary compliance[3].

Similarly, in public spending: if communities see that resources are allocated equitably – for instance, historically marginalized counties getting more attention, or poorer neighborhoods
receiving quality services – it legitimizes the government. It fosters national cohesion. People
support policies, even tough ones, when they believe the burden and benefits are fairly
shared. We have witnessed the opposite as well: when austerity measures or new taxes are
perceived as unjust, protests erupt (indeed, we saw social unrest last year over certain tax
hikes[4]). That disruption hurts the economy. Thus, fairness isn’t a fuzzy ideal; it has direct
economic and political consequences. It can mean the difference between stability and chaos,
between cooperation and resistance to change.

Productivity and innovation. Fairness, especially based on meritocracy, is a huge driver of
innovation. If young people know that success depends on their hard work and creativity –
not on nepotism or bribery – they are motivated to put in effort, to take entrepreneurial risks.
They trust that the “rules of the game” will reward them appropriately. We’ve seen Kenyan
innovators create world-leading solutions (like mobile money M-Pesa) because our relatively
open business environment allowed it. We must ensure that continues – that even a kid from
a village with a great tech idea can rise, not only the well-connected. A fair playing field in
education and business competition will yield an explosion of new enterprises and industries,
because talent is everywhere in this country. We often say SMEs (small and medium
enterprises) are the backbone of our economy – creating over 80% of jobs. Fairness means
giving them equal opportunity to thrive – access to credit, prompt payment for goods,
freedom from harassment. If we do that, their increased productivity lifts growth for
everyone.
Another angle: Fairness reduces costly conflicts. Look at it as a bargain: citizens accept and
support the economic system if it delivers equitable progress. If too many feel excluded,
society fragments. We’ve unfortunately experienced periodic tensions and even violence
often rooted in perceived injustice – whether economic or political. Those events scare away
investment, slow growth, and require resources to resolve. Investing in fairness – like
reducing inequality, ensuring all regions feel included – is investing in peace. And peace is a
prerequisite for any economic activity. No investor wants to build a factory where strife is
brewing, and no tourist will come if streets are in turmoil. So fairness is actually a form of
preventative maintenance for our economy’s engine, keeping it running smoothly by avoiding
breakdowns due to social friction.

Let’s illustrate briefly. You may have heard the phrase “spreadsheet economics vs street
economics.” On spreadsheets, one might see Kenya’s GDP expanding, budgets balanced,
good inflation numbers. But what do the streets say? If the ordinary Kenyan – the boda boda
rider, the mama mboga, the recent college graduate or a lecturer who has been on strike–
cannot perceive improvement in their lives, those positive numbers on the spreadsheet are
at risk. Ultimately, the economy lives or dies on the streets.
Fairness is the bridge between the two: it ensures that what looks good on paper translates
into better livelihoods in reality. For example, a budget could look balanced by cutting funds
for rural clinics – but on the street that means a sick child doesn’t get care, which isn’t fair or
productive in the long run. A fair approach would find savings in waste or high-end luxuries,
not in basic services to the poor. In doing so, it keeps that human capital healthy and
productive.

We also have data linking fairness to growth. Countries that have more equal income
distribution often sustain growth longer and bounce back faster from downturns. The World
Bank’s recent Kenya Economic Update noted that while our fiscal policies do reduce inequality
somewhat, they haven’t yet reduced poverty effectively[5]. The recommendation was to
“spend smarter, not just more” on social programs[6]. Smarter spending means targeting
resources to those who need them most – that’s fairness. And by doing so, we can actually
create a more dynamic economy, as the poor gain purchasing power and invest in their
children’s futures.
Fairness is not a zero-sum game where someone must lose for another to win. Done right,
fairness grows the pie for everyone. A fair tax system yields more revenue to fund
infrastructure that benefits all businesses. A fair labor market where workers are paid a living
wage means they spend more in the economy, fueling demand for goods. Inclusive policies
that lift the poorest create new consumers, new talent, new ideas. It’s a positive feedback
loop: fairness drives prosperity, and prosperity gives us resources to further enhance fairness.
I want you to remember this key message: Equity and efficiency are friends, not foes. It’s a
false choice to think we must sacrifice one for the other. A fair economy is a robust, resilient
economy. It has the broad support of its people, the full utilization of its talents, and the
stability to weather storms.

Now, having spoken in broader terms, let me ground these ideas with real stories – because
fairness or the lack thereof is something Kenyans experience in their daily lives. I will share
with you brief sketches of three Kenyans – Wanjiku, Kiptoo, and Amina – and how our
economic system feels through their eyes.

Meet Wanjiku. Wanjiku is a spirited young woman who runs a small kiosk in a Nairobi
informal settlement. She sells fruits, vegetables, and tea to support her family. She doesn’t
have much, but she’s proud to be an entrepreneur. Wanjiku’s dream is to expand her kiosk
into a proper shop. But on her journey, she encounters the everyday obstacles of unfair
systems. For one, credit is hard to come by – she has no collateral for a bank loan. When she
once borrowed from an informal lender to buy a new stock of bananas, the interest rate was
punishing and ate up most of her profit.

Another hurdle: Wanjiku often wakes up at 4 a.m. to queue for water because her
neighborhood lacks proper infrastructure. She pays a higher price per liter of water from
vendors than wealthier Kenyans pay in their piped homes – imagine that! And when the
county government officials come around, she sometimes has to close her kiosk or pay a small
“fee” to avoid harassment over permits. Still, Wanjiku perseveres.
Now, imagine how fairness could change her life: if microfinance programs offered her a low
interest loan, she could buy a refrigerator and stock more goods. If city services reached her
area, she wouldn’t spend hours securing water – she could focus on her business. If
regulations were clear and just, she’d pay a reasonable license fee and be free to work without
intimidation. Wanjiku doesn’t want charity; she just wants a fair chance to prosper from her
hard work. When fairness is lacking, she feels invisible and discouraged; when it is present,
she will be unstoppable.
Next, meet Kiptoo. Kiptoo is a small-scale farmer in Eldoret. He grows maize and keeps a few
cows on a small piece of family land. Farming is his passion and his livelihood, but it often
feels like a gamble. This year, for example, the rains were inconsistent and his maize yield
suffered. What truly frustrated him, though, was not just the weather – it was the market.
After harvest, Kiptoo took his maize to the National Cereals Board hoping to sell at the support
price. He did, but then had to wait and wait for payment as the government delayed releasing
funds. For months he had empty pockets while his grain sat in a depot. It hurt him deeply that
when he needed fertilizer at planting time, prices were sky-high and the subsidized fertilizer
program ran out before he got any – some well-connected folks seemed to have gotten it in
bulk. So he planted less, and yields were low. Now even the little he grew isn’t paid for on
time. Kiptoo wonders, is this fair? He toils from dawn to dusk but feels let down.
Imagine a fairer system for Kiptoo: fertilizer subsidies that actually reach genuine farmers like
him, transparently and without middlemen games. A reliable crop insurance or irrigation
support so that droughts don’t wipe him out. And prompt payment for produce delivered – if
the government owes him, they pay as reliably as he repays his own small loans. With those
conditions, Kiptoo could invest confidently in the next season, maybe diversify into higher
value crops, maybe hire a neighbor or two on the farm. He wants to feed Kenya – a noble
contribution – but fairness must fertilize the soil he works on.

Lastly, meet Amina. Amina is a young nurse at a county hospital in northeastern Kenya. She
is dedicated and well-trained. Every day, she treats dozens of patients, from pregnant
mothers to injured children. Amina finds deep meaning in her job, but also daily heartbreak.
Her hospital often lacks essential supplies; she sometimes has to tell a mother of a sick child,
“we have run out of that medicine, please try a pharmacy in town,” knowing full well the
family can barely afford food, let alone expensive medicine. It pains her that some of her high
school friends who grew up in Nairobi work in private hospitals with modern equipment,
while she struggles with unreliable power and old tools.

And beyond her work, Amina faces another unfairness: as a woman in a still male-dominated
society, she fought hard to get her education. She thanks the government bursary she got
that allowed her to finish nursing school – without it she’d be married off early like her elder
sister was. Fairness intervened in her life at that point and changed her trajectory. Now she
pays it forward by serving her community. But on the tough days, when salaries are late or
when she hasn’t had a day off in weeks due to understaffing, she feels the weight of
inequality. She asks, why should a Kenyan in one county have so much less healthcare access
than another Kenyan elsewhere? All lives, she believes, have equal worth. In a fairer system,
Amina’s hospital would be adequately funded no matter its location, so that her patients
receive the same standard of care as anyone in the country. In a fairer system, dedicated
public servants like her would be supported, mentored, and equipped – not left to burn out.
I share these stories of Wanjiku, Kiptoo, and Amina because they are at the heart of our topic.
They remind us that when we talk about macroeconomic statistics and reforms, we’re
ultimately talking about whether people – real people – can live decently and pursue their
dreams. Fairness is Wanjiku being able to expand her business. Fairness is Kiptoo getting his
rightful pay and farming without fear about what he will do with his produce. Fairness is
Amina having the tools to heal and never having to turn a patient away.

These three represent millions of other Kenyans. Each of you here can probably think of a
“Wanjiku” in your neighbourhood or a farmer like Kiptoo in your county or you may have an
“Amina” in your family. Or perhaps you see yourself in one of them. Their struggles
underscore why a fairer economic system is not a lofty ideal but a pressing need. An economy
that consistently fails people like them is an economy that is ultimately failing the nation. But
an economy reformed to empower people like them will unleash Kenya’s full promise.
Let’s carry Wanjiku, Kiptoo, and Amina in our minds as we examine Kenya’s current economic
landscape. With their stories as context, the data we discuss next will not be just numbers –
it will be measures of how far we still need to go to achieve the fairness they deserve.
Kenya’s Economic Landscape — Data and Reality
Having set the human context, let’s turn to an overview of Kenya’s economic condition today.
This is our reality check – a mix of encouraging progress and sobering challenges.
Understanding these facts and figures will ground our discussion of solutions.

Kenya Economic Snapshot 2025
Growth: Kenya’s economy has been growing, but at a moderate pace. After a strong rebound
in 2021, growth slowed to about 4.8% in 2022 and is estimated to be the same for 2024
2025[7]. In simpler terms, we are growing, but not fast enough to dramatically reduce
unemployment or poverty. The World Bank projects we might edge up to around 5% growth
in a couple of years[7]. What’s holding us back?
Several factors: recent droughts hit agriculture; global inflation and financial tightening made
things harder; and domestic issues like high interest rates and the aftermath of COVID-19
dampened activity. Additionally, episodes of political unrest and uncertainty (for instance, last
year’s protests over living costs and taxes) have shaken investor confidence[8][9]. But the
greatest hustle is mismanagement of our scant resources. On the positive side, some sectors
are resilient – we’ve had decent performance in areas like transport, ICT, and parts of
agriculture when rains cooperate. But overall, our growth is below the Vision 2030 targets
and below what is needed to absorb the tens of thousands of young people entering the job
market every year.
Inflation and Cost of Living: After experiencing high inflation last year (north of 9% at times),
inflation has begun to come down, now hovering around 6-7% – within the Central Bank’s
target range[10]. This is thanks in part to better weather stabilizing food prices, and aggressive
monetary policy (our Central Bank raised interest rates to tame inflation). That’s good news – easing inflation gives households some breathing room and protects the purchasing power
of the poorest who suffer most when prices soar.
However, let’s note: a lot of the public anger we saw in recent times stems from that period
of high fuel and food prices, coupled with new taxes that kicked in mid-2023. Even with
inflation moderating, many basics remain expensive relative to a couple of years ago. So the
cost of living is still a pressing political and social issue. Looking ahead, continued prudent
monetary and fiscal management should keep inflation in check around mid-single digits –
which is essential for economic fairness because inflation is effectively a tax that hits low
income families hardest.
Public Debt: Now to a major challenge – our public debt. Kenya’s debt levels have increased
significantly over the past decade, and mush more in our recent past. At independence we
inherited almost no debt; by 2013 our debt-to-GDP ratio was about 42%. Today, public debt
stands at roughly 65-70% of GDP[11][12]. In shilling terms, that’s about KSh 10.5 trillion owed
by the end of 2024. The IMF has flagged Kenya as at high risk of debt distress[13]. What does
this mean practically? It means a large chunk of our national budget now goes to paying
interest and principal on loans, rather than to services and development. In the current
budget, one out of every three shillings of revenue is being spent on interest payments
alone[14]. If you include repaying the loan principals due, total debt servicing takes up over
half of our collected taxes[13]. That is huge – it squeezes out funds for things like education,
healthcare, and infrastructure maintenance. For fairness, this is worrisome: the more we
spend on yesterday’s debts, the less we have to invest in improving Kenyans’ lives today and
for the future.
Let’s break the debt down further. Roughly half of it is external debt (owed to foreign lenders
like the World Bank, China, or Eurobond investors) and half is domestic debt (owed to local
entities like banks, pension funds, and individuals holding government securities)[11][12].
External debt has the risk of foreign exchange swings – indeed, as the shilling weakened this
past year, paying dollar or euro debts became more costly in shilling terms. Domestic debt,
while in our control, has its own issues: the government has borrowed heavily from local
banks through short-term Treasury bills, leading to very high interest rates. At one point early
this year, the 91-day T-bill (a 3-month government paper) carried an interest of about 16%[15] – a clear sign of the strain and crowding-out in our financial system. When government offers
16% risk-free, banks would rather lend to the state than to say, a small business at maybe
18% with risk. Thus, heavy domestic borrowing at high rates has meant less private credit
available and more expensive loans for businesses and households. It’s a circle that can slow
growth and job creation – again hitting ordinary Kenyans.
We also face immediate debt pressures: for example, a $2 billion Eurobond matured in June
2024 which we successfully paid (with difficulty), and others loom in coming years[16][17]. If
global financial conditions are tight, refinancing or rolling over such loans is challenging. That’s
partly why the government sought additional support from institutions like the IMF and World
Bank – to bolster reserves and meet obligations. Our Treasury has announced a goal to reduce
the debt-to-GDP ratio to about 55% in the next few years[18][19] (roughly around 52-53% by
2027/28[19][20]). Achieving that will require painful belt-tightening and, hopefully, economic
growth to outpace borrowing. We’ll talk solutions soon, but it’s important to keep in mind:
the debt burden we carry is one of the reasons our current system struggles to deliver
fairness. It’s like a family that’s paying off a huge mortgage – there’s less money for food,
education, or starting a new business.

Poverty and Inequality: I’ve mentioned poverty at ~40%. Let’s add a few more nuances.
Poverty is higher in rural areas (~43%) than urban (~33%)[1], indicating regional disparities
and the urban-rural divide. Certain counties have extremely high poverty rates – for instance,
Turkana, Mandera, Samburu are 60% or more in poverty[21][22]. In contrast, Nairobi is about
16%[23], Kiambu around mid-teens, etc. This tells us that where you are born in Kenya can
massively influence your life chances – something devolution aims to address, but it’s a work
in progress.
Inequality, measured by the Gini coefficient, is around 0.39 in Kenya[24], meaning we have a
significant income gap (for comparison, that’s better than South Africa’s extremely high
inequality, but worse than many of our East African neighbors). To put it plainly, the top 10%
of households enjoy a large share of income/wealth while the bottom 40% struggle with a
very small piece of the pie. We also have inequality within cities – pockets of extreme wealth
next to informal settlements. Why does this matter economically? High inequality can depress
overall demand (the poor can’t spend on goods) and breed social discontent. It can also lead
to a “brain drain” internally – talented people from marginalized areas migrating to places of
opportunity, reinforcing disparities back home. For sustainable growth, more Kenyans need
to be lifted into the consuming middle class – that requires reducing poverty and inequality.
Unemployment – especially Youth Unemployment: Official unemployment (narrowly
defined) might be around 12%, but that doesn’t capture underemployment and discouraged
workers. The more telling figure is youth unemployment/underemployment. For our young
people aged ~15-34, various estimates put it between 30% to as high as 60-65% depending
on the definition[25][26]. The Federation of Kenya Employers cites about 67% of youth are
jobless or not fully engaged[25]. That is an alarming two-thirds of our youth potentially not
realizing their full productive potential. Even if the exact number is debated, the reality is
clear: we have a youth jobs crisis. Every year around a million youth enter the labor market;
the formal sector creates only a fraction of that in new jobs; less than 20%. So many end up
in informal work – some hustling in jua kali with unstable earnings, others unfortunately idle
or feeling hopeless. This is both a fairness issue (everyone deserves a fair chance at a decent
job) and an economic ticking time bomb. As I mentioned earlier, a populace that feels locked
out will eventually react. Conversely, if we can tap this youthful energy through employment
and entrepreneurship, it could drive growth for decades – the so-called demographic
dividend. So job creation isn’t just an economic statistic, it’s the lifeline for maintaining a fair
and peaceful society.
This current youth is educated and well informed. It is more adventurous, willing to go to
extremes to test a despotic regime, even their parents.
Regional and Social Indicators: Kenya has made progress in areas like education – for
example, near universal primary school enrollment. But quality and transition to secondary
still lag especially in poorer counties. Health outcomes have improved in aggregate (longer
life expectancy, lower child mortality over the decades), yet the disparities are wide. A child
in Nairobi has a far better chance of surviving and thriving than a child in a far-flung arid
county. Maternal mortality remains high in some regions.
These differences reflect unequal resource management and historical neglect. The
constitution mandates equitable sharing of national revenue (at least 15% goes to counties,
distributed by a formula that favors need). That has helped – counties like Mandera now get
large budget allocations for health, for instance. But governance has not kept pace. It will take
time and vigilance to ensure those translate to real services on the ground. From an economic
lens: when we improve human development in lagging regions, we actually expand our
economy’s capacity (healthier, educated populations become productive). So fairness in
social spending is also smart economics long-term.

Comparison with Peers: Briefly, how do we stack up in the region? Our GDP is larger than
that of any other East African nation – we are a regional economic leader. However, our debt
level (~70% of GDP) is higher than, say, Tanzania’s (which is around 40-50% of GDP)[27].
Tanzania has enjoyed similar growth rates to us with lower debt and inflation; Rwanda has
had very high growth (~7%+)[28] but also took on debt that pushed its debt-to-GDP toward
70-80%[29]. Uganda has lower per capita income but also lower cost of living in some
respects. Each country has its story, but one thing stands out: those who have managed their
finances prudently (lower debt, focus on investing in people) are now in a better position to
accelerate growth than those needing to consolidate fiscally. We don’t want to be left behind
in East Africa’s economic momentum. We also see, in countries like Ethiopia (prior to recent
conflicts) or Ghana (which had to restructure debt), that economic gains can quickly unravel
if underlying issues – including mismanagement, inequality or unsustainable debt – aren’t
addressed. These are cautionary tales we must heed.

“So our reality is a mixed canvas: a resilient economy with great potential and entrepreneurial people, yet weighed down by corruption, debt, inequality, and joblessness. It’s like we’re driving a car with a powerful engine but also with the handbrake partly on and uneven weight distribution causing friction.”

The encouraging part is that our challenges are well-identified, and thus solvable with
determined action. We have up-to-date data, thanks to institutions like the KNBS and others,
that guide us on where the gaps are. We know, for instance, that simply improving how we
manage debt and spending could free resources (the World Bank said interest absorbs a third
of revenue[14] – imagine halving that burden, how much more we could do for Wanjiku,
Kiptoo, Amina). We know that tackling corruption could save enormous sums – the new
Finance Minister estimated that if we cut theft by 50%, we might not need to borrow from
the IMF at all[30]. And we know that investing in sectors like agro-processing, digital
technology, and green economy can provide the jobs our youth need.
In summary, Kenya’s economic state today presents a pivotal opportunity. We have stabilized
some macro fundamentals (inflation down, exchange rate more stable now, moderate growth
continuing[31]), which gives us a platform. But we also have these clear flashing indicators –
corruption, debt distress, poverty pockets, youth unemployment – telling us that now is the
time to implement bold reforms for fairness. If we ignore them, we risk economic stagnation
and social upheaval. If we address them, we could usher in a new era of inclusive prosperity.
With that understanding of “where we are,” let’s move to the next logical question: what do
we do about it?

Domestic Debt and “Odious Debt”
Before we delve into broad reforms, allow me to tackle a specific but crucial issue head-on:
our domestic debt situation and the recent debate over “odious debt.” Both relate to fairness
at a macro and moral level – fairness between generations and fairness between the
government and its citizens.
First, domestic debt dynamics. As noted, the government has heavily borrowed from the local
market in recent years. This domestic borrowing, while useful to avoid exchange rate risk, has
come with problems: crowding out private sector credit (as banks lend to government instead
of businesses), short maturities (a lot of it via 3- and 6-month T-bills that force frequent
refinancing), and high interest costs (rates for government securities climbed to highs not
seen in years). When the government competes with the private sector for loans and drives
up interest rates, it is essentially making it harder for Wanjiku to get an affordable business
loan or for a young family to get a mortgage. That is an internal fairness issue – the state’s
financing needs versus the people’s financing needs.
Also, interest payments on domestic debt consume a large share of our taxes (most of that
one-third of revenue interest bill I mentioned goes to domestic lenders). Many of those
lenders are actually Kenyan pension funds and banks – so one could argue it’s Kenyans paying
Kenyans. True to an extent but consider: the benefits of those interest payments accrue
mostly to those who have excess cash to invest in T-bills and bonds. Meanwhile, the average
Kenyan taxpayer, who might never be able to buy a government bond, is subsidizing relatively
well-off bondholders through taxes. In plain terms, an overly high domestic debt burden can
have regressive implications – it can widen inequality.
So what do we do? The government must manage domestic borrowing responsibly to avoid
harming the broader economy. This includes developing a strategy to gradually bring down
interest rates – perhaps by better coordinating with the Central Bank and giving clear signals
to the market – and to spread out debt maturities to reduce refinancing risk.
“Odious debt” has made headlines recently in Kenya due to a landmark court petition filed
earlier this year. Traditionally, in international law, odious debt refers to debt contracted by
a government without the consent of the people and not used for their benefit, especially if
creditors were aware. It’s often associated with despotic regimes: classic criteria being – no
public consent, no public benefit, and creditor awareness equals an odious debt that morally
(some argue legally) shouldn’t be enforceable on the public[32]. Think of a dictator borrowing
billions and pocketing them; the citizens, once free of him, claim they shouldn’t have to pay
those bills.

Kenya is a democracy, but concerns have arisen about the legitimacy of some recent debts.
The petition E216 of 2025, led by civil society and a senator, essentially claims that about KSh
6.9 trillion of debt incurred between 2014 and 2022 might qualify as odious or illegal[33][34].
They argue that these loans were taken without proper parliamentary approval or
transparency, that some of the money cannot be accounted for (e.g., the Eurobond funds,
where audits found discrepancies and offshore accounts[35][36]), and that a lot of it did not
benefit Kenyans (projects that were never completed or were grossly overpriced due to
corruption)[37][38]. In essence, they claim citizens should not be forced to repay debt that
vanished into corrupt pockets or was incurred in violation of our laws.
This is a bold claim. The High Court has constituted a bench to hear it – that alone shows how
seriously it’s being taken. We must acknowledge the moral logic behind it: it offends common
sense of justice to repay, say, a loan for a phantom project (a project that never materialized
because funds were embezzled). It’s like being asked to keep paying a bank loan when the car
you bought with it was stolen and the bank’s agent colluded in the theft – naturally you’d feel
you shouldn’t have to pay.
However, on the other hand, there is the practical reality of global finance: debt contracts
are binding, and if we simply refuse to pay certain debts, we’d face severe consequences –
loss of creditworthiness, legal action by creditors, and possibly an even worse economic crisis.
No Kenyan government – even a new one – can just unilaterally cancel half its debt without
grave fallout.
So how do we balance justice with stability? I believe the answer lies in a strategy of audit
and accountability rather than outright repudiation. First, we absolutely should conduct a
thorough audit of recent public debt – bring in our Auditor General (who has already flagged
issues), maybe partner with international forensic experts, to trace every major loan: Who
approved it? Did it follow the law (like the requirement that Parliament okays all loans)? How
were the funds used? What assets or value do we have to show for it? Publish these findings.
If this process reveals, for example, that a certain loan’s proceeds were mostly stolen, then
use that evidence to pursue those responsible – both the corrupt officials and any complicit
contractors or middlemen. That’s the accountability and remedy part: holding people to
account, recovering stolen funds (including from abroad – we can cooperate with foreign
governments to repatriate illicit wealth).
In cases where it’s clear the Kenyan people got virtually zero benefit from a loan, we have
some moral high ground to approach the creditor for renegotiation or relief. Now, creditors
are not saints – but they are sensitive to reputational risk and often will come to the table if
a country is in distress (we see this in ongoing debt restructuring talks for countries like
Zambia). Kenya could invoke international principles, like the UNCTAD Principles on
Responsible Sovereign Lending and Borrowing[39], which say lenders have a responsibility
too – for instance, they should ensure a country’s loans are sustainable and used well. If a
lender clearly violated that (lent recklessly or turned a blind eye to corruption), we could seek
partial forgiveness or restructuring of that particular loan. This is a diplomatic and
negotiation-heavy path, but it’s more viable than flat-out refusal to pay.
Meanwhile, domestically, we should strengthen laws to ensure “never again” will such
dubious debt accumulation happen. This means tightening parliamentary oversight for any
borrowing (perhaps even amending the Public Finance Management Act to void any loan not
reported to Parliament), capping debt ratios in law (with escape clauses for emergency), and
enhancing transparency – perhaps a public debt registry online that any citizen can inspect to
see details of all government loans. We want to restore trust that future debt will be
legitimate and beneficial.

The term “audit, remedy, account, and sustain” sums it up: Audit the debt, Remedy the
injustices (through legal action and renegotiation), Account for every shilling (transparency),
and sustain our credit by showing the world we’re committed to reform, not default. This
balanced approach seeks justice for citizens without blowing up our economy’s stability.
Lastly, let me tie this to fairness between generations. High debt can be seen as unfair to
future generations – our children and grandchildren – if they inherit a mountain of obligations
because of our mismanagement. We have a duty of inter-generational fairness. That’s why
reducing our debt to a sustainable level is part of building a fairer system. It’s akin to not
overfishing the lake so that our kids can also fish tomorrow. In economic terms, it means
keeping debt at levels that our economy can handle so that tomorrow’s Kenyans can still
invest in their development rather than just pay our bills.
In conclusion on this topic: dealing with our debt, including the question of odious portions,
is not only a financial necessity but a moral one. We must show Kenyans that we will not
tolerate mortgaging our country for no gain to the people. By addressing this issue head-on
through transparency and justice, we also lay a stronger foundation for all other reforms. It’s
about resetting the norm: public finance must be for the public good, always.

Globalisation and Trade
The trade war between China and the United States is having knock-on effects globally and
on Africa in particular, primarily from reduced demand for exports of raw materials. To
protect their economies and to seize new economic opportunities, African governments
across the continent should promote deeper intra-regional integration.
Global trade has been guided by emphasis on the benefits of free trade. These principles are
enshrined in the WTO statutes that acknowledge the need for Most favoured Nation
Treatment for the developing countries and Dispute Settlement procedure for addressing
misunderstandings that could arise among the members.
The new tariff war started by President Trump outside the armpits of the WTO threaten global
trade. The unilateral action of reciprocal tariffs by the United States against all countries
undermine the multilateral trading system and threaten the cohesion that has existed on
trade since the WTO came into existence in 1992. These actions have shattered the
foundations of traditional trade theories such as competitive and comparative advantage and
rendered the Dispute Settlement mechanism toothless.

These actions have also disrupted global supply chains, undermined multilateral agreements
and exposed the inadequacy of institutions like the WTO to manage modern trade conflicts.
The mechanisms of classical trade theory and the role of the Bretton Woods institutions (the
International Monetary Fund, the World Bank and WTO) are being rendered irrelevant at a
time when they are most needed for peace and prosperity.
The Trump tariffs have complicated already a muddied global environment for most African
countries coming in the wake of the withdrawal of programs under USAID and a claw back on
Official Development Assistance. The weakening of financial buffers and the diminishing role
of lenders of last resort like the IMF are bad omens coming as a shock for many poor
countries. But they can serve as a wake-up call too for the continent.
These developments should prompt African governments to change the mindset and to take
control of their economic future – moving away from external lifelines and towards self
reliance and resilience.

The shocks arising from these unilateral actions may have caught many developing countries
unprepared. A rearranging of the external environment that is required comes with new
challenges for the weak and vulnerable. External shocks to the global economy – from trade
wars to financial crises, to pandemics – place a disproportionate burden on developing
nations, particularly in Africa, exacerbating vulnerabilities and widening inequalities. This
time, limited integration into global value chains of most African countries, which is often
viewed as a weakness, might serve as a buffer against external volatility. But when two giants
fight the grass suffers. In this case both China and the United States are Africa’s major trading
partners and a little cough from either might make many countries on the continent to
literally catch a cold.
The imposition of tariffs by the Trump administration in 2025 has significantly impacted trade
and investment in several African nations, notably Kenya, Lesotho, Madagascar, and Côte
d’Ivoire. These measures have disrupted long-standing trade relationships established under
the African Growth and Opportunity Act (AGOA), which previously allowed duty-free access
to the U.S. market for eligible African countries.
Kenya, which exported approximately $548 million in textiles and apparel to the U.S. in 2024,
was subjected to a baseline 10% tariff under the new policy. While this rate is lower compared
to other affected countries, it still poses challenges for Kenyan exporters operating on thin
margins. The increased costs may lead to reduced competitiveness, potential layoffs, and
slowed economic growth in sectors reliant on U.S. markets.
Lesotho has been among the hardest hit, initially facing a 50% tariff on its exports to the
U.S. In 2024, Lesotho exported $237 million worth of goods, primarily textiles, to the U.S.,
while importing only $2.8 million. The textile industry, which employs about 40,000 people
and constitutes a significant portion of the country’s GDP, is now at risk. The steep tariff has
resulted in the collapse of factories, increased unemployment, and has destabilized the
already fragile economy.

Madagascar too was slapped, with a 47% tariff imposed on its exports. In 2024, the country
exported $733 million in goods to the U.S., largely under AGOA. The textile industry,
employing approximately 180,000 people and contributing about 20% of Madagascar’s GDP,
is at significant risk. Officials estimate that the tariffs have led to the loss of around 60,000
jobs, a third of the workforce previously employed in the industry.
Finally, Côte d’Ivoire was initially subjected to a 21% tariff on its exports to the U.S. While
specific figures on the impact are limited, the country’s agricultural exports, such as cocoa
and coffee, are likely to suffer from reduced competitiveness in the U.S. market. This could
lead to decreased export revenues and affect the livelihoods of farmers and workers in the
agricultural sector.
These four economies demonstrate the likely direct impact of the Trump tariffs. At the same
time the impact of these tariffs on China and the EU in particular could have a ripple effect on
African countries dependent on these markets. As a result, African GDP growth rates are
projected to reduce by as much as 0.4% in 2025 and 0.6% in 2026, meaning economic growth
rates of 3.8% in 2025 and 2026.
Under the circumstances African leaders must seize the moment to steer towards self-reliant
growth. They have the opportunity to transform insulation into opportunity. On the trade
front, the potential impact of increased US tariffs on African economies comes primarily from
the ripple effects of tariffs imposed on China and the EU, Africa’s largest trading partners. As
China and the EU face economic deceleration due to higher tariffs, the knock-on effects may
reshape global demand and trade dynamics. US tariffs on Chinese goods are slowing China’s
production and reducing its demand for raw materials from sub-Saharan Africa, which could
have a significant effect on African exports.
Many countries continue to face structural challenges, including limited industrial capacity
and reliance on raw materials. This persistent reliance on primary commodities underscores
Africa’s commodity-dependence trap (whereby countries that are reliant on exporting
commodities are vulnerable to fluctuating commodity prices and struggle to diversify their
economies).
Africa must now turn into domestic resource mobilization, enhancing tax collection, plugging
revenue leakages and managing public debt effectively. Strategic investments must focus on
directing resources towards infrastructure, education and technology to build a strong
foundation for economic diversification.

Strengthening African-oriented institutions, particularly the continent’s regional economic
communities (RECs) should be a priority being the only safety valve left.
The Trump tariffs have brought chaos into the multilateral trading system that allowed the
developing countries to at least listen to trade debates between those with muscle and voice.

Now these countries are no where when these discussions take place in Washington. The
benefits that they derived from AGOA or through the MFN have been tossed through the
window, practically overnight with catastrophic effects for some of them, like Kenya,
Madagascar, or Lesotho.
Africa cannot afford to be passive in the face of these realities. We are a continent of 1.4
billion—young, ambitious, and endowed with vast resources. Yet, intra-African trade remains
a mere 15%. Despite similarities in our exports—coffee, cocoa, maize, wheat—we have yet
to build strong value chains that benefit our people. The time has come to fully leverage the
African Continental Free Trade Area (AfCFTA), deepen our commitments to COMESA and the
EAC, increase trade with each other, and speak with a united voice on the world stage.
Kenya must lead this charge. We possess the talent, an innovative digital sector, and a
respected regional voice. Yet, we are still shackled by stubborn inequalities. To move forward,
we must reform our tax system to ensure it is progressive—taxing wealth, not just
consumption—and protecting our industries from unfair competition. We should renegotiate
trade agreements that do not serve our national interest.

Most critically, we must place our youth at the centre of our economic agenda. Let us invest
in their ideas, equip them with future-ready skills, and empower MSMEs to form the
backbone of our economy. We must see the youth as an asset ready to be transformed and
exploited for national building. We should not see them as a burden.
Our focus should be on championing regional trade—exporting more to African markets, and
building the roads, railways, and ports needed to connect us all.
We must also strengthen our institutions, fight corruption, promote open budgeting, and
ensure citizen participation in decision-making. This is how we build trust and accountability.
A fairer, more just economic system is not a utopian dream. It is a conscious decision—a
blueprint within our grasp. If we choose action and design our policies with courage and
inclusivity, we can realise shared prosperity and justice for all Kenyans.
It is almost like looking at a glass half full or half empty. I see it as half full of potential, but the
empty half represents millions of lives confronted by many challenges, talents not yet tapped.

“Our challenge is to fill that glass to the brim.”

Let’s not forget one sobering metric: The debt service to revenue ratio – over 50% by some
IMF estimates when including principal repayments – basically means we’re borrowing more
to pay old debts, a sign of distress. This cannot continue ad infinitum. It is unfair to future
generations to mortgage their future because of our present inefficiencies or corruption.
When we talk about a fair system, it is not only fairness among people today – it’s fairness to
the next generation too, not saddling them with unsustainable burdens.
Yet, in all this, I want us to carry hope from the data as well. Kenya still has one of the most
dynamic economies in East Africa. We have become a lower-middle-income country. We have
successful sectors – floriculture, mobile banking, creative arts – that were born from virtually
nothing. Kenyans are incredibly entrepreneurial and optimistic by nature, with a young and
vibrant educated population. Even our protests demonstrate that we are a society that can
voice demands vigorously (some places do not have that freedom).

These are strengths. If we are offered an economy that can channel the energy seen on the
streets into constructive enterprise, if we convert the resilience of our farmers and small
businesses into productivity gains through support, if we make each shilling count – we can
truly break out. The government’s role in this transformation is crucial. By prioritising
investment in sectors that drive inclusive growth—such as education, healthcare,
infrastructure, and digital connectivity—the government can unlock opportunities for
millions. Continued expansion of programmes like affordable credit for small and medium
sized enterprises, support for agricultural innovation, and targeted social protection
initiatives can help ensure that the benefits of economic progress reach every corner of
society. More than anything else transparent and accountable public spending, alongside
policies that encourage entrepreneurship and job creation, will harness the nation’s potential
and create a fairer, more prosperous future for all.

So, this is the reality check: a nation full of promise, held back by certain harsh realities. The
data neither damns us to doom nor guarantees success – it simply illuminates where attention
is needed. And clearly, much attention is needed on the fairness elements – who is benefiting
and who is left behind and what can the government do to make sure there is fairness. It also
hinges on whether there is fairness at the global level in finding markets for our products
competitively.

How do we turn our hard choices now into smart choices that drive fairness and prosperity.
From Hard Choices to Smart Choices
We have identified the problems: a tight fiscal space, high youth unemployment, poverty
pockets, inequality, and public distrust. The good news is that we have a menu of solutions.
They involve tough decisions, yes, but I call them smart choices because in the long run they
yield big benefits and are better than avoiding the issues.
The steps to build a fairer, stronger economy draw on recommendations from our own
experts, from the World Bank and IMF analyses, and are drawn from examples of other
countries that have succeeded.

Key Reforms for Fair and Sustainable Growth
1. Restore Fiscal Health with a Domestic Debt Plan:
a. We must get our fiscal house in order in a way that doesn’t crush the economy
or the poor. A top priority is managing domestic debt. I propose we establish
a clear Domestic Debt Management Charter. This would be an official
commitment to gradually reduce reliance on expensive short-term borrowing.
For example, the Treasury can pledge to refinance short-term T-bills into
longer-term bonds to spread out repayments. It should also commit to a
transparent issuance calendar – telling the market in advance how much it will
borrow and when – to reduce uncertainty (currently, sudden heavy borrowing
spikes cause interest rates to jump).
b. Another part of this plan is reviving retail bonds like the M-Akiba mobile bond,
making it easier for ordinary Kenyans to lend to their government and earn
interest. This not only raises funds but democratizes the benefits of interest
earnings beyond banks. By broadening the base of domestic lenders, we can
potentially negotiate slightly lower rates (since we tap into more savings). And
with more longer-term bonds (say 5, 10, 20-year tenors), we won’t be caught
in a crunch every three months. The overall goal: bring down domestic interest
rates and make credit available again for the private sector. This will take
disciplined execution – for instance, sticking to borrowing targets and not
deviating because of political pressures. But if we do it, we’ll see savings in
interest (freeing money for services) and a more liquid financial market for
businesses.
2. Responsible Borrowing Framework (No more hidden loans):
a. Hand-in-hand with managing existing debt, we need to prevent a future pile
up. That means enshrining a responsible borrowing framework. In practice,
this could be a policy or law requiring that any new public debt meets certain
criteria: it must finance a project or need that has been evaluated for its
economic return or social value; it must be approved transparently (no off
budget sneaky loans); and preferably, it should be concessional (cheap and
long-term) unless no alternative.
b. We should also push for debt transparency – for example, publishing loan
agreements or summaries thereof (excluding any truly sensitive info) so that
citizens and markets know our obligations. Sunshine is a great disinfectant: if
everyone knows a certain contract is overpriced, it creates pressure to
renegotiate or avoid it. The days of borrowing in darkness must end.
Parliament has a role here too: they should rigorously vet loans and ensure
that the debt ceiling that is not arbitrarily breached without special approval
(some countries do this via law).

3. Fair and Efficient Taxation – “Collect Smart, Not Hard”:
a. We cannot talk fairness without talking how we raise revenue. Our tax system
has room for improvement both in equity and in capacity. The mantra “Collect
Smart, Not Hard” means widening the tax net and leveraging technology and
compliance rather than simply raising tax rates on the same small base.
Practically, this involves a few things: continue expanding use of digital tax
systems (KRA’s iTax and new electronic invoicing for VAT) to catch evasion –
for instance, ensuring businesses can’t under-report sales because
transactions are recorded digitally. Use data matching – if someone imports a
luxury car or has large M-Pesa flows and never files taxes, KRA should politely
inquire why. At the same time, make taxes simpler, especially for small
businesses and informal sector players.
b. Many Kenyans avoid formalization because they fear heavy taxation or
cumbersome processes. If we introduce, say, a low flat turnover tax for micro
enterprises or presumptive taxes (where you pay a small fixed amount if you’re
below a certain size), more might voluntarily comply. It’s better to get a little
from many, than to try to get a lot from a few and discourage them.
c. Also, for fairness: we should shift relatively more of the burden to direct taxes
on income and wealth and relieve excessive reliance on indirect taxes like VAT
on basic goods that hurt the poor. That could mean things like an additional
top income tax bracket for very high earners (ensuring a billionaire pays a
higher marginal rate than a middle-class manager – currently they’re often
similar), or eventually some form of property/wealth taxation for the ultra
rich. Crucially, improve tax enforcement at the top end – go after the big fish
evaders, not just small traders. This improves both revenue and the perception
of fairness. If citizens see rich individuals and large corporations paying their
share, they will be more willing to comply.
d. One more point: timely tax refunds – like VAT refunds to businesses – are part
of fairness. When government delays a legitimate refund, it’s unfairly using
private firms as involuntary lenders. Clearing refund backlogs and automating
the process going forward will help businesses (especially exporters who often
rely on VAT refunds) and send a message that government deals fairly.

4. Expenditure Reforms – Cut Waste, Boost Value:
a. On the spending side, we have to do more with what we have (since raising
new revenue takes time). First, aggressively cut waste and corruption. This
sounds obvious but needs action: implement the recommendations of audit
reports. If the Auditor General says X billion shillings can’t be accounted for in
a ministry, insist on answers, punish those responsible, and recover funds.
Empower the Ethics and Anti-Corruption Commission to actually bite. Enforce
procurement rules – and I suggest using tech here too: adopt e-procurement
systems where bids and awards are visible, reducing human discretion. Some
countries have saved a fortune by simply purchasing through transparent e
platforms.
b. Second, restructure loss-making State-Owned Enterprises (SOEs) not
necessarily by selling them. There are parastatals that each year require
bailouts. We need to make tough calls: either reform them to profitability
(maybe through new management, right-sizing, strategic investors) or in some
cases consider phasing them out if their public benefit doesn’t justify the cost.
The bottom line is, they shouldn’t be perpetual drains. Imagine if those bailout
billions were redirected to health or education – that’s an opportunity cost we
can’t ignore.
c. Third, prioritize high-impact social spending. Even as we tighten budgets,
protect programs like immunizations, school feeding in poor areas, and cash
transfers to the very vulnerable. These relatively modest expenditures have
huge fairness and human capital payoffs. Meanwhile, we can delay or slow
lower priority capital projects (especially if they’re nice-to-have but not must
have). It’s about sequencing: do first what yields fairness and growth,
postpone what can wait. Our Budget Policy Statement already hints at some
of these measures – we must actually implement them and resist political
pressure to do the opposite.

5. Job Creation and MSME Support – Ignite the Engine of Employment:
a. Solving youth unemployment is complex, but several practical actions can
help. A big one is ensuring government itself does not stifle small businesses. I
cannot emphasize enough the point from our stories: pay what you owe on
time. The national government and counties must clear pending bills owed to
suppliers, many of whom are MSMEs. It’s inexcusable that businesses collapse
or lay off staff because the government delayed payment for goods delivered
a year ago.
b. There’s a commitment to settle verified pending bills – this needs urgency.
Going forward, write contracts that include interest penalties for late payment,
to enforce discipline.
c. Another action: expand access to credit for MSMEs. Government has started a
credit guarantee scheme for small enterprises – basically co-signing loans from
banks so that the perceived risk goes down. We should enlarge this program,
as it encourages banks to lend to groups they used to shun. Leverage mobile
finance too: what became of the “Hustler Fund” that was meant to provide
micro-loans to reach informal entrepreneurs. This was a novel idea that should
be refined and scaled to make it effective.
d. On the labor side, we need to walk the talk on public-private partnership in
skills and jobs: by borrowing from countries like Germany and more recently
some Asian economies where it had worked. Our technical training institutions
(TVETs) can partner with industries in local areas so that training matches job
market needs. In agriculture (where many youth are, or could be, employed):
invest in programs that help young farmers access land, training, and markets – “agri-preneurship” incubation hubs, for example. Ultimately, the private
sector creates jobs; the government must create the environment. Ensuring
stable power, easing business registration, fighting corruption (so a small
business doesn’t have to pay bribes at every turn) – all these encourage
enterprises to start and grow, which means jobs.

6. Social Protection & Human Development – Don’t Sacrifice the Vulnerable:
a. Even as we fix budgets, we must uphold a basic floor of dignity. Expanding
universal health coverage (UHC) is a critical reform. Practically, this means
reshaping the National Hospital Insurance Fund (NHIF) to cover more Kenyans
(especially the poor, whose premiums should be subsidized by government)
and to cover a broader package of services. We piloted UHC in a few counties;
now we need to implement the lessons nationwide. COVID-19 taught us that
health shocks can devastate not just lives but livelihoods – UHC is both a
fairness measure and an economic resilience measure.
b. Similarly, continue and increase targeted cash transfers – to the elderly,
orphans, persons with severe disabilities, and extremely poor households.
Studies in Kenya show that these modest stipends often go straight into
productive uses: better nutrition, keeping kids in school, or investing in a cow
or a small shop. They have been effective for the elderly no longer able to cater
for themselves. They have multiplier effects in local economies. So even in lean
times, protecting (or even modestly raising) the social safety net budget is a
smart choice because it prevents people from falling into destitution from
which they can’t recover, and it injects money at the base of the economy
where it circulates.
c. We should also finally operationalize the social justice fund envisaged in law –
possibly financed by a small percentage of revenue – to systematically fight
extreme poverty. This is fairness at the most basic level: no Kenyan should be
left to starve or die due to lack of a few shillings of help. It’s doable within our
means if we prioritize it.

7. Anti-Corruption and Accountability Measures – Trust through Transparency:
a. For every reform I’ve listed to work, transparency and accountability are the
enablers. We should embrace open governance: strengthen institutions: give
more support and independence to bodies like the Auditor General’s office and
EACC.
b. Public engagement is key: involve citizens in budgeting. It is enshrined in our
constitution. Make public participation real and meaningful. When people
have a voice in decisions, they trust outcomes more. All this builds trust in
society – which is vital for economic progress.
It’s a hefty agenda: fiscal reform, tax and spend changes, job creation strategies, social
protection, and anti-corruption. It might seem daunting, but I am convinced we can walk and
chew gum at the same time. We do not have the luxury to do these sequentially. Our task is
to integrate and accelerate them under a unifying vision of fairness.
Importantly, the international community is watching and willing to assist if we show
commitment. The IMF and World Bank are already supporting with loans tied to reforms (for
instance, World Bank budget support can help ease the pain of adjustment). If we make smart
choices, we’ll maintain that backing and possibly negotiate even better terms (like longer
repayment schedules) as confidence grows. If we dither or backtrack, we risk being left to
market forces which could be much harsher.

Let me also highlight the timeline: these reforms, if started now, will bear fruits over the next
several years – by 2029 or 2030, we could realistically see debt down to safer levels (the target
~52% of GDP by 2028[19]), poverty falling significantly, and youth employment rising due to
a more vibrant SME sector. That aligns with our Vision 2030 timeline – it’s like a course
correction to achieve the vision’s promises. We may be a bit behind schedule, but with
urgency we can catch up.
The message here is one of responsibility and opportunity. Yes, we have to tighten belts and
correct wrongs (responsibility), but in doing so we unlock the vast opportunity of Kenya – the
energy of our youth, the creativity of our entrepreneurs, the richness of our lands. Hard
choices become smart choices when they are guided by a long-term vision of an inclusive, fair
Kenya where everyone can thrive.
Now, to organize these ideas and ensure we keep our eye on the ball, I find it useful to group
them into thematic pillars. These pillars are like the beams supporting the house of a just
economy.

Pillars of a Fairer Economic System
Think of these pillars as the guiding principles under which specific policies fall. They are
interconnected and together hold up the structure of a fair economy. Each pillar has a simple
tagline – a rallying call, if you will – to keep the core idea front and center.

Pillar 1: Fair Taxation – “Collect Smart, Not Hard.”
A fair economic system needs a tax system that is just and efficient. “Collect smart, not hard”
means we broaden and modernize tax collection instead of overburdening a small base.
Under this pillar, we aim for progressivity (those with greater ability to pay should contribute
more) and simplicity (make it easy to comply). It means using data and technology to catch
evaders at the top, while making it straightforward for small businesses to enter the tax net
through low, flat rates or presumptive taxes. When everyone pays what they should, the load
on each individual is lighter. Fair taxation will raise the revenue we need for services without
strangling the economy or increasing inequality. It builds trust when citizens see the tax
burden shared justly and the money put to good use.

Pillar 2: Public Services & Social Safety – “No Kenyan Should Die Because They Fell Sick.”
This pillar is about equity in basic needs – health, education, social protection – ensuring that
the fruits of our economy reach every Kenyan in tangible ways. To uphold this, we pursue
Universal Health Coverage, so that a mother in a village can access hospital treatment just as
easily (and as affordably) as one in the city. It includes strengthening our public education, so
a child in Turkana gets quality schooling comparable to a child in Nairobi – that’s fairness in
opportunity.
And it means having robust safety nets: pensions for the elderly, disability support, and cash
transfers that prevent extreme poverty. In a fair economy, falling sick or losing a job doesn’t
mean falling into destitution. We all pool risks and care for the vulnerable, which also keeps
society stable. Importantly, this pillar is not just social policy – it’s economic investment. A
healthy, educated population is more productive and innovative. So, fairness here also fuels
growth. The guiding ethic is simple: every Kenyan life has equal worth, and our public
services must reflect that.

Pillar 3: Jobs & Enterprise – “Pay on Time; Jobs Will Follow.”
At the heart of economic justice is the chance to work and earn. This pillar focuses on enabling
livelihoods, especially through small and medium enterprises (SMEs), which are Kenya’s job
engine. “Pay on time; jobs will follow” zeroes in on a very actionable item – the government
and big companies honoring their obligations promptly. When the government pays suppliers
(many of them SMEs or youth contractors) without delay, those businesses can thrive and
hire more staff. When a big firm ensures a small distributor is paid on schedule, that small
business can, in turn, pay its workers and vendors.
Timely payment may sound mundane, but it’s transformative – it injects liquidity into the
economy’s lower levels and builds confidence. Beyond payment, this pillar includes easing
access to credit for entrepreneurs (through loan guarantees and micro-loans), reducing red
tape for startups, and providing training and mentorship to young businesspeople. It also
covers initiatives like public works programs or apprenticeships that equip and absorb the
youth. The broader principle: inclusive growth.
Growth driven by a broad base of local enterprises and widespread employment is far fairer
and more sustainable than growth arising from, say, one or two sectors or mega-projects that
don’t create many jobs. If we empower the hustler – the jua kali artisan, the farmer, the tech
startup founder – we empower the nation.

Pillar 4: Transparency & Digital Governance – “If It’s Public Money, It’s Public Data.”
The phrase “if it’s public money, it’s public data” encapsulates the idea that citizens have the
right to know how their resources are used. In practical terms, it means government should
operate with open books. Budgets, tenders, expenditures, development results – these
should be readily accessible. Why? Because transparency deters corruption and
mismanagement. When processes are out in the open, there’s less room for backroom deals.
Digitizing government services also levels the field: it removes the petty power of gatekeepers
who exploit citizens.
A transparent, rules-based regional trade system where our traders can compete fairly in East
Africa and beyond without hidden barriers. In essence, information is power: by
democratizing data, we democratize economic power. And embracing e-governance makes
government more efficient and responsive, which disproportionately helps those who lack
connections to “work the system.” A fair system is one where the rules are clear and apply
equally, and transparency plus technology are tools to achieve that.

Pillar 5: Inclusive Growth & Equality – “Leave No One Behind.”
In practice, this means we actively work to bring marginalized communities into the economic
mainstream. For gender inclusion: ensure women have equal access to property, finance, and
employment opportunities. We can’t achieve our economic potential if half the population is
disadvantaged.
For regional inclusion: accelerate development in historically neglected areas – continue
investing in roads, water, electricity and internet in pockets where they lag behind.
Devolution is a powerful tool here, and we should strengthen it – increasing county capacities
and ensuring equitable sharing of revenue.
This pillar also covers youth and persons with disabilities – special programs to support their
education and employment make the system fairer. When we say no one left behind, it also
implies that growth policies are evaluated by how widely the benefits are spread. Not just
GDP growth, but how much poverty went down, how many jobs created in various counties,
how income gaps are narrowing. Ultimately, a fair economy is one which all citizens feel they
have a stake in – where a kid in Wajir and a kid in Kiambu both see a path to a bright future.
That sense of shared prosperity is both the goal and the glue of our nation.
If we uphold these pillars, what might Kenya look like in, say, 10 years? We’d have a tax system
where everyone – from boda boda operators to mega-corporations – contributes fairly, and
the government has ample revenue to invest in people. We’d have universal healthcare
operational, plus strong safety nets, so being poor doesn’t mean being one illness away from
tragedy. We’d see SMEs flourishing, young people confidently starting ventures because they
know they’ll get support and fair treatment. Government processes would be largely online,
quick and corruption-free – people would talk about bribes as a thing of the past. And all parts
of Kenya would be rising – perhaps not equally in absolute terms, but equally in opportunity:
a bright girl in Marsabit would have basically the same chance to attend a good university as
a bright girl in Mombasa. That’s the Kenya these pillars aim for.
To achieve it, we need to measure progress and keep everyone accountable.

Accountability — The Fair Economy Scoreboard
To keep us on course toward a fairer economy, we should establish what I’d call a “Fair
Economy Scoreboard.” There is nothing novel in this because we have done it before, under
vision 2030.
Imagine a simple dashboard that tracks a handful of key indicators which together signal
whether we are getting fairer and more inclusive. The idea is to regularly measure and publicly
display these indicators, so that leaders and citizens alike can see where we’re improving and
where we’re lagging. It’s like a report card for the nation’s economic justice.
Think of how we all pay attention to, say, GDP growth or inflation because they’re reported
regularly. We need to give fairness the same prominence. When a minister is interviewed,
they shouldn’t just be asked “what’s the growth rate?” but also “what are you doing to reduce
the poverty rate this year?” If every quarter the public sees that, say, poverty in rural areas
barely budged or interest payments ate up even more revenue than last time, it creates
pressure on officials to act. Conversely, if youth unemployment ticks down significantly,
leaders can be applauded and encouraged to do more of what works.
Let’s recall how in the past, a lack of accountability allowed issues to fester. For instance, debt
ballooned in part because there wasn’t a readily accessible, widely-discussed metric that
people watched – it was talked about mostly by experts. Now debt-to-GDP is commonly cited
due to IMF programs, etc., and there’s more public debate around it – that’s accountability in
action. Similarly, we must bring these fairness metrics into everyday discourse.
To sum up, the Fair Economy Scoreboard is a tool to keep us honest. It will tell us – without
spin – if our reforms are translating into real improvements in people’s lives and in the
integrity of our system. It also helps prioritize: if something like interest-to-revenue isn’t
improving, it signals “fix debt” remains urgent; if jobs aren’t growing, it means our business
environment reforms need acceleration. It turns lofty goals into trackable deliverables.

Shared Roles — Who Does What on Monday Morning
Building a fairer economy is a collective enterprise. Every sector of society has skin in the
game and a role to perform. I often think of Kenya as a great orchestra – when each section
plays its part, in harmony and tempo, we produce beautiful music (in our case, shared
prosperity). If even one section is off-beat or out of tune, the whole performance suffers. So,
who must do what?
National Government (Executive): Lead by example, implement boldly.
To the President, Deputy, and Cabinet: the nation looks to you for leadership and political
will. If something isn’t working, adjust quickly. Your steadfast leadership can keep all other
players aligned.

Parliament: Legislate and oversight for fairness.
Our Members of Parliament and Senators have the mandate of the people to shape laws and
scrutinize the executive. Make laws that lock in fairness and keep government honest
through tough, objective oversight. Do not let partisan politics derail this focus – economic
justice is a unifying national agenda.

County Governments: Deliver inclusive development on the ground.
Governors and County Assemblies, you are the front-line of service delivery now. Ensure that
public participation in county budgets isn’t a mere check-the-box exercise – actively involve
communities in deciding local priorities. Be agents of fairness at the grassroots. When
counties succeed in equitable development, the whole country succeeds.
The Judiciary: Uphold justice and the rule of law in economic matters.
Though not typically seen as economic players, our courts have a huge influence on fairness.
Your integrity and diligence will assure Kenyans that the social contract is protected by an
impartial arbiter.

Private Sector & Business Community: Practice responsible business, be partners in
inclusion.
To our business leaders – whether of large corporations or small enterprises – you are the
engine of growth and job creation. A fairer society is good for business: more people with
disposable income, a level playing field so new entrants can thrive (which spurs healthy
competition and innovation). So it’s win-win to join this cause.
Civil Society, Academia, and Media: Be the watchdogs and educators.
To NGOs, researchers, student associations, and journalists – your role is crucial in sustaining
momentum and keeping everyone honest. Amplify the voices of the voiceless – make
Wanjiku, Kiptoo, and Amina’s experiences heard by policymakers regularly. Because when
policymakers are face-to-face with the human impact, it spurs them to act.

Citizens: Engage, demand, and embody the change.
A government by the people means ultimately you shape it by what you tolerate or demand.,
Demand transparency: make use of the data that comes out, like checking public
expenditures for your area, and raise alarm if something looks off. Be active citizens, not
passive subjects. Remember, every great change in history was driven by regular people
standing up and saying, “we want better.” You have that power – use it constructively,
whether through dialogue, petitions, peaceful demonstrations, or community projects. And
importantly, support each other across communities – a fair economy for Kenya benefits all
tribes, all regions, all classes. So reject those who try to divide us for selfish ends. Unity in
purpose is our strength.

I will quote our national motto: Harambee – “Let’s all pull together.” That spirit is what we
need now. Each of us should ask: what can I do in my role to make Kenya more just
economically? And then do it, knowing that millions of others are doing their part in concert.
I want to conclude by returning to the bigger picture – the vision of Kenya we seek – and to
make a heartfelt call for the courage it will take to get there. Because plans and roles mean
little if we don’t have the courage to see them through. So allow me to close on that note of
vision and courage.

Closing — Vision and Call to Courage
My dear friends, let us take a moment to envision the Kenya we are striving to create – a
Kenya transformed by fairness and justice in its economic life.
I invite you to project yourself a decade or so into the future. Picture Kenya in the mid-2030s.
To get there – the reforms, the vigilance, the unity – must come into play. And underpinning
all of it is one essential ingredient: Courage. The courage to change, the courage to sacrifice
short-term comfort for long-term gain, the courage to stand up for what is right even when
it’s not popular or easy.
Why courage? Because entrenched interests will resist some of these changes. Because we
might find ourselves tested by external shocks or internal doubts. Because to break from the
past and do things differently – whether as a leader choosing transparency or a citizen
refusing to pay a bribe – requires bravery.

Our history offers inspiration. The generations before us showed immense courage for justice:
the freedom fighters who faced down the colonial empire; the reformers of the 1990s who
endured detention and intimidation, like the late Raila Odinga and many others still alive with
us today, to win multiparty democracy and a new constitution. Compared to their struggles,
what we are called to do – fix budgets, insist on honesty, and hold each other accountable –
should be entirely achievable. We stand on the shoulders of these giants. They handed us
freedom; now we must hand the next generation a fair and prosperous nation. Let’s not let
fear or fatigue stop us when our ancestors did so much more under far greater repression.
To the youth especially – you are more than just the future, you are the present actors of
change. You have tools and knowledge at your fingertips that prior generations could only
dream of. Use them. Be the generation that finally says, “We will eradicate extreme poverty;
we will end corruption in our lifetime; we will make Kenya a land where everyone can stand
tall.” Do not let anyone tell you it’s impossible – impossibility has been disproven by Kenyans
time and again. If Wangari Maathai could start with one tree and spark a movement, if young
techies could turn mobile phone payments into a world-changing innovation, then you can
transform governance and inclusion through your creativity and idealism. Start where you are – improve something in your community, build a prototype solution, mobilize your peers
around data or civic action. Small acts, multiplied millions of times, become a revolution.

I am confident that if we all have the courage to act in whatever capacity we hold – a minister
setting a new policy, a teacher mentoring poor kids, a business refusing to cheat, a voter
rejecting the corrupt candidate – our combined effort will reach a tipping point where fairness
becomes the norm, not the exception.
Kenya is often admired for its dynamism and resilience. Let the next admiration be for our
inclusive growth and fairness. There is a beautiful Swahili proverb: “Ua la haki halinyauki” –
“A flower of justice does not wither.” If we plant seeds of fairness now, the blooms will be
perpetual for generations to enjoy.
Ladies and gentlemen, we started by recalling the dream at independence and the unfulfilled
promise of fairness. We end now looking ahead, hopeful and determined. The journey will
have hurdles, yes. But I take inspiration from all of you here – the fact that we can have this
frank discussion, that you care enough to spend your time on a debate about economics and
justice – it tells me we have the human capital of idealism and intellect to succeed.
So, as we step out of this hall and into the world of action: let us carry the vision of a fair
Kenya in our hearts and the work-plan for it in our hands. Let’s support each other in doing
what’s right. Let’s celebrate progress when it happens and hold each other accountable when
we slip. Let’s make fairness the standard we live by.
Because ultimately, true prosperity is not measured by how high the towers rise, but by how
many of us stand tall beneath them. Each and every Kenyan standing tall – free from want,
empowered by opportunity, and united in purpose – that is the real measure of success. Not
the skyline of our cities, but the dignity of our people.
I am confident that with courage and collaboration, we will achieve this. In ten years, in
twenty, historians will look back and mark this period as the turning point when Kenya chose
the path of inclusive prosperity and never looked back.
Thank you, asanteni sana, for your kind attention and engagement. Mungu awabariki – may
God bless you all, and may God bless the Republic of Kenya.

References / Sources
World Bank (2025) Kenya Public Finance Review & Economic Update; IMF (2024) Article IV
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UNCTAD (2023) Principles on Responsible Sovereign Lending and Borrowing; Kenya National
Bureau of Statistics (2023) Household Survey and Poverty Assessment; Kenya National
Treasury (2025) Budget Policy Statement; Ecofin Agency (2025) Kenya Debt Reports.
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