Four in ten firms in Kenya have reported making informal payments to get things done in 2025, an increase from previous years that highlights the continued cost of corruption to businesses, according to the World Bank’s November 2026 Kenya Economic Update.
The report said 40 per cent of firms made informal payments in 2025, compared with 29 per cent in 2013 and 22 per cent in 2018. The payments are associated with interactions with public officials and efforts to access government services and approvals.
Medium-sized businesses were the most affected, with 48.2 per cent reporting requests for gifts or informal payments. Among large firms, the share was 30.7 per cent.
The World Bank said the reported incidence among Kenyan businesses was higher than the Sub-Saharan African averages cited in the report, which stood at 20.9 per cent for medium-sized firms and 21.6 per cent for large firms.
Nearly 36 per cent of firms in Kenya also reported experiencing at least one request for a bribe in the previous year. The report said businesses were more likely than firms in several comparison groups to encounter expectations of gifts when dealing with tax officials, seeking electricity connections or applying for construction permits and licences.
These demands can increase the cost and uncertainty of operating a business. Firms may face additional expenses, delays in obtaining approvals and pressure to make payments outside official procedures.
The report also linked bribery exposure with weaker business performance, including lower innovation, productivity and sales growth. Such conditions can disadvantage firms that follow formal procedures while giving an unfair advantage to businesses with stronger connections or greater ability to absorb unofficial costs.
The World Bank noted that digital reforms, including eCitizen and iTax, have helped reduce discretion and improve access to information. However, their impact remains uneven because manual processes and informal workarounds continue, while implementation differs across counties.
The lender recommended simplifying administrative procedures, strengthening digital systems and providing businesses with clear channels to challenge improper demands. It also called for more consistent enforcement of accountability measures.
The findings suggest that reducing informal payments is not only an anti-corruption priority but also a business environment reform that could help firms operate more efficiently, invest and create jobs.
