How Kenya's Singapore dream is fading under dark cloud of corruption

Dr Qimiao Fan, World Bank Group Division Director for Kenya, Rwanda, Somalia and Uganda, during the launch of the Kenya Economic Update in Nairobi on November 4, 2026. [Wilberforce Okwiri, Standard]

Corruption remains the biggest setback that President William Ruto faces in delivering his vision to move Kenya from a developing country into a high income country akin to Singapore, according to a new World Bank report.

The World Bank noted that taming corruption offered the easiest and fastest route to transform Kenya into a fast-growing economy that would create millions of new and high paying jobs, but the government has continued to put in lacklustre efforts in fighting it.

In the report, the Bank estimated that Kenya loses about Sh358 billion to corruption annually.

It also noted that Kenya could have saved more than Sh100 billion in building the Standard Gauge Railway had it put in strong anti-corruption measures in implementing the project, while Kenyans are paying significantly more for electricity due to opaqueness in the country’s power sector.

This has resulted in what officials at the Bretton Woods institution termed being trapped at its middle-income level.

In the report launched in Nairobi on Wednesday, the World Bank said that governance challenges are increasingly limiting Kenya’s prospects for faster and more broadly shared growth, “with corruption as the key binding constraint”.

“Control of corruption remains an area of significant underperformance (for Kenya) compared to all peer groups," said the World Bank in the Kenya Economic Update (KEU), which has a special focus on Governance Constraints to Economic Growth and Job Creation.

The World Bank estimated that corruption and collusion cost the country two per cent of GDP. This could translate to Sh358 billion annually, with government data showing GDP stood at Sh17.6 trillion in 2025.

Former President Uhuru Kenyatta said in the past more than Sh2 billion was lost to corruption every day or more than Sh700 billion annually.

The report by the World Bank noted that the losses translate into substantial additional borrowing needs accumulating over time.

Kenya became a lower-middle-income economy in 2014 but has since struggled to move up the ladder and transition to an upper-middle-income country.

President Ruto’s regime has an ambitious programme to transform the country into first-world status, mirroring the rapid industrialisation and disciplined governance model of Singapore. The administration is, however, being faulted for failing to tackle on corruption.

The World Bank said fighting corruption is a low-cost way to grow the economy and achieve the Singapore dream. While maintaining the importance of infrastructure development for Kenya, the institution said eliminating corruption is a much cheaper way to stimulate economic growth compared to spending billions on new roads, railways, ports and other mega infrastructure.

“With ambitious but feasible reforms... GDP could be more than 20 percent larger by 2035 relative to the non-reform baseline. Households could see a boost to their consumption by more than a quarter above the baseline,” said the World Bank.

“Better control of corruption would also translate into sizable impacts of more and better jobs for up to 7.7 million people and up to 27 percent greater household consumption.”

It added that the necessary improvements are within reach for Kenya and are among Kenya’s peers. including Tanzania, Côte d’Ivoire and India, which have implemented reforms successfully and are already witnessing results. It is also the route that countries like Singapore took in the past.

“In earlier decades, anti-corruption and public administration reforms laid the foundation for economic transformation in fast-growing economies in Asia – initially in Singapore and the Republic of Korea and later in Malaysia and Viet Nam,” said the World Bank.

“For Kenya to progress toward its long-term development vision, ‘Road to Singapore’, embarking on a governance transformation will be critical.”

Due to high levels of corruption, the World Bank said, Kenya has had to pay much more for infrastructure projects. Giving the case of SGR, the report noted that Kenya paid much more when compared to its neighbours that implemented superior SGR lines.

The report notes that Kenya could have made savings of Sh117 billion had it put in strong governance structures in procuring the SGR contractor as well as in the implementation of the project. It further notes that a third of this or about Sh35 billion was attributable to corruption related costs.

“Kenya’s SGR has been significantly costlier compared to similar projects in neighboring countries. The line connecting Mombasa to Nairobi cost US$7.6 million (Sh988 million) per km (diesel powered); compared to US$5.7 million (Sh741 million) per km for the Dar es Salaam to Dodoma line in Tanzania (electrified), and US$5.3 million (Sh689 million)  per km for the Djibouti to Addis Abeba line (electrified),” reads the report.

“With the same cost metric as the Tanzanian line, Kenya could have saved up to US$900 million (Sh117 billion) in initial construction costs. Of this amount, at least 30 percent is considered attributable to governance challenges—the preference for direct contracting rather than competitive tendering; land speculation; and outright fraud around titling, valuation, and compensation payments—rather than topographic or technical differences.”

Kenya has started expansion works on the 369km SGR to Kisumu and Malaba that is set to cost Sh650 billion.

It is also the case in power production, where independent power producers have signed Power Purchase Agreements in what the World Bank describes as opaque ways, resulting in costly power prices. This has seen Kenya become unconducive for manufacturers, with many choosing to relocate to destinations where power is cheaper and more stable while dissuading new companies seeking to set up in Kenya.

Households and businesses pay the highest for electricity in the region and it is even higher when compared to Asian economies that Kenya is looking to emulate. The cost of power has been subject to numerous inquiries, including by Parliament but also a taskforce that was set up by the Jubilee Administration, all recommending review of PPAs to lower costs.

“Kenya’s power is costly compared to structural and aspirational peers. Power costs are more than double those in Viet Nam and other Asian countries and close to 50 percent higher than those in Uganda for business users," said the World Bank.

“Opaque and rent-generating power purchase agreements (PPAs), stemming from governance weaknesses in the procurement of electricity from private providers, have contributed to high costs in the electricity sector.”

In various surveys,  including some by Kenya’s Ethics and Anti-Corruption Commission (EACC)), a majority of Kenyans have cited corruption as holding them back at the individual level and say that their livelihoods would be better and public service delivery would be better if the government put more effort into fighting corruption.

A 2025 EACC survey cited in the World Bank report shows that 54.3 per cent of Kenyans say that their incomes would double if corruption decreased by half and 56.5 percent said corruption has been hampering economic growth, increasing poverty levels, increasing cost of living and increasing unemployment levels.

While corruption sweeps across all sectors and is seen at all levels, the report noted it has a disproportionate impact on informal sector workers. Boda boda riders and market venders, who President Ruto romanticised as hustlers, lose up to 20 percent of their daily earnings to bribes according to the report.

“Governance constraints contribute to the challenges of informal workers, most importantly by lowering ‘post-corruption’ earnings, and increasing uncertainty. Informal workers face demands for bribes from frontline institutions such as traffic police, inspection services and municipal agencies. Reports put the share of bribe fees paid by riders at 5–20 percent of daily earnings (Sh50– 100 daily, plus occasional larger bribe demands),” said the report.

“These payments shrink take-home pay, coming on top of other costs such as fuel taxes, import taxes on motorcycles and county and Sacco fees.”

In its grand plans to achieve the Singapore Dream, Kenya plans to spend Sh5 trillion on infrastructure over the next decade.

The projects will be financed by public finance but also private sector, in what is seen as limiting government spending on essential services as well as growing Kenya’s debt, especially the off-budget borrowing as investors pump billions of shillings in projects and later charge the public for use of the infrastructure.

The World Bank noted that taming corruption is key in reducing budget deficits and in turn the need to borrow.

“Widespread corruption and rent-seeking contribute to wider public deficits and higher borrowing costs. Kenya has struggled with elevated deficits, keeping debt levels high,” reads the report, adding that corruption has an impact of reducing revenue collection, increasing infrastructure project costs as well as increasing country risk ratings, which translates into higher borrowing costs.