Kenya’s economy is on an upward trajectory, with growth improving from 4.8 percent in 2022 to 5.2 percent in 2023, Prime Cabinet Secretary Musalia Mudavadi has said.
Mudavadi says projections indicate even greater growth in 2024.
He noted that inflation dropped significantly from 9.2 percent in September 2022 to 3.5 percent in February 2025, signaling positive trends in the overall Gross Domestic Product indicators.
“This has markedly reduced the cost of living and improved household incomes. Furthermore, the exchange rate has stabilized and interest rates fallen, improving credit access to the private sector,” said Mudavadi.
The Prime CS spoke as the government undertakes its Mid-term Review to assess performance and refine strategies for service delivery.
He stated that Kenya must rethink its approach to reducing reliance on external assistance, particularly in light of shifting global geopolitical landscapes, climate change, and conflicts adding that prudent resource management is critical.
“During the ninth review of our programme with the International Monetary Fund (IMF), Kenya terminated the multi-year programme, forgoing over Ksh110 billion ($853.5 million) in budget and balance of payments support. To bridge this gap, we must tighten our belts as we pursue a new IMF programme,” Mudavadi said.
He stressed the urgency of growing internal resources and tackling corruption, which he termed the greatest existential threat to economic growth.
To address this, the government has invited the IMF to conduct a Governance Diagnostic Assessment to identify vulnerabilities in key state functions.
Mudavadi revealed that the IMF has concluded a scoping mission that will lead to the detailed governance assessment in early June 2025.
This he said will help in developing and implementing a robust governance reform plan for the next few years.
Mudavadi said the government is cognizant of the higher expectations of Kenyans more than ever before with citizens yearning for more from the Government and its leaders especially in delivering on the main pillars of the Bottom-Up Economic Transformation Agenda (BETA)
On Universal Health Coverage, he noted that over 20.6 million Kenyans have registered for the Social Health Authority (SHA), but only four million have completed means testing meaning that 80 percent of the registered members cannot fully enjoy the envisaged benefits.
Mudavadi said the government is scaling up public communication and stakeholder engagement to fully onboard all Kenyans onto the SHA platform.
He noted that government is deepening dialogue with the private healthcare providers on the Government’s commitment to settle historical NHIF debts, accumulated to an estimated Ksh33 billion in the past decade.
So far, Sh8.6 billion has been paid, with President Ruto assuring that verified debts, starting with amounts below Ksh10 million will be settled.
“Our endeavour is to restore services throughout the healthcare value chain, while rethinking strategies for ensuring long term stability of the healthcare system. These include engaging members of parliament and county governments to build and equip more public health facilities and hire additional healthcare workers,” he said.
On affordable housing, Mudavadi highlighted progress in constructing 95,737 housing units, generating 200,000 jobs and Ksh4.4 billion in business opportunities for small enterprises.
“The Government is stepping up its promise to build 250,000 houses a year, and Kenyans will see how much affordable housing stimulates economic growth and promotes equity and inclusivity in the distribution of resources,” he said.
Mudavadi was speaking at the Kenya School of Government, where he chaired the 1st National Development Implementation Committee (NDIC) meeting of 2025.
The meeting brought together top government officials, including the Head of Public Service and Principal Secretaries from all State Departments.
“Kenyans remind us daily of our responsibility to deliver on the promises of the Kenya Kwanza Administration. We must engage more constructively with the people and persuade them to give us another term to realize our vision of an industrialized and prosperous Kenya,” he said.
