Kenya’s public procurement system faces persistent risks from non-competitive contracting, undisclosed business ownership and conflicts of interest involving public officials, according to the World Bank’s November 2026 Kenya Economic Update. The report warns that these weaknesses can inflate the cost of infrastructure and undermine fair competition for government contracts.
The report says direct contracting, rather than open competitive procurement, remains common in Kenya. It also identifies public-private partnership projects emerging from unsolicited proposals without adequate transparency as a continuing concern.
One of the risks highlighted is the awarding of government contracts to companies connected to public officials. Such arrangements can create opportunities for officials to influence procurement decisions in favour of businesses in which they have direct or indirect interests.
The World Bank notes that once contracts are awarded to connected companies, the likelihood of further collusion and cost markups during project implementation can increase.
Although Kenya’s Constitution and subsequent legislation provide safeguards against conflicts of interest, the report says implementation has remained challenging.
The update also points to weaknesses in the disclosure of beneficial ownership. Knowing the individuals who ultimately own or control companies bidding for public contracts is important in identifying links between suppliers and public decision-makers.
The report recommends stronger enforcement of beneficial ownership disclosure requirements and implementation of the new Conflict of Interest framework. These measures would help public institutions identify potential conflicts before contracts are awarded.
The World Bank further calls for the full rollout of electronic government procurement, known as e-GP, to improve transparency and accountability. Digital procurement systems can make tender information, contract awards and procurement processes easier to monitor.
The concerns have wider implications for public finances. When contracts are awarded without sufficient competition or oversight, taxpayers may pay more than necessary for infrastructure and services. Higher project costs can also increase borrowing requirements, particularly when government spending is already under pressure.
The report argues that improving procurement governance is therefore not simply an administrative reform. It is also part of the effort to reduce fiscal waste, strengthen public investment and create a more predictable environment for businesses competing for government work.
Kenya’s challenge will be to translate its legal and digital reforms into consistent practice across public institutions. Greater disclosure, competitive bidding and effective enforcement will be essential to ensuring that public contracts deliver value for money.
