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World Bank Kenya Director Qimiao Fan has called for urgent fiscal reforms to address Kenya’s mounting debt and worsening jobs crisis, warning that spending cuts alone will not close the country’s fiscal gap. In an opinion piece published in The Standard on Monday, Fan emphasized the need to “spend smarter” by protecting investments in health, education, infrastructure, and climate resilience.
Citing estimates from the Ethics and Anti-Corruption Commission, Fan noted that inefficiencies amounting to Ksh608 billion annually drain public resources. He illustrated the opportunity cost, observing that redirecting even part of this wastage could finance the construction of a new Talanta Stadium or cover the salaries of 100,000 junior secondary school teachers each year.
The World Bank director also criticized Kenya’s tax exemptions, which cost the country more than Ksh510 billion annually or 3.4 percent of GDP according to the National Treasury’s 2024 Tax Expenditure Report. “This is enough to build a new Nairobi Expressway every year,” he argued, urging reforms to exemptions alongside stronger property and wealth taxes to raise revenues without overburdening ordinary citizens.
On job creation, Fan underscored the central role of the private sector, calling for regulatory streamlining, improved access to finance, and lower borrowing costs. He urged the government to invest in Kenya’s youthful population through expanded vocational training, better school-to-work transitions, and innovation support to prepare young people for a rapidly changing economy.
Fan also highlighted the green economy as a potential growth engine, encouraging investments in clean energy, climate-smart agriculture, and resilient infrastructure. However, he cautioned that corruption remains a significant barrier to progress. For example, he estimated that bribes paid to traffic police alone amount to 0.5 percent of GDP annually funds that, if redirected, could finance the Standard Gauge Railway expansion to Uganda within five years or significantly boost social protection programs.
According to the World Bank’s latest Public Finance Review, adopting these five policy shifts could reduce Kenya’s debt-to-GDP ratio by a third within a decade, restoring levels last seen in the early 2010s. The report also urged a review of the rollout and funding model of Universal Health Coverage to reduce the financial burden on citizens.
