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A new report highlights political instability and civil unrest as the primary threats to Kenya's economic activities in the coming year, urging stakeholders to seek clarity on policy execution and safeguards amidst a challenging business environment.
Political instability and civil unrest have been identified as the foremost hazards capable of disrupting economic activities in Kenya over the next year, according to the 2025 World Security Report. This assessment underscores a persistent challenge for the East African nation, which has experienced recurring periods of social unrest and political tension.
Recent years have seen a significant increase in protests and riots across Kenya. In 2024, the country recorded the highest number of such events in over three decades, with 2,005 demonstrations. July 2024 alone saw 250 recorded events, the highest monthly figure ever. These demonstrations, often driven by youth unemployment, high living costs, and concerns over corruption and contentious policy changes, have frequently escalated into violence, leading to business disruptions and economic losses.
Kenya's political stability index, which measures perceptions of the likelihood of government destabilisation by unconstitutional or violent means, stood at -0.94 points in 2023, an increase from -0.95 points in 2022. The historical average for Kenya from 1996 to 2023 is -1.15 points, with a maximum of -0.66 points in 1996 and a minimum of -1.43 points in 2009. This indicates a fluctuating but generally low perception of political stability compared to the global average of -0.06 points.
The economic toll of political unrest is substantial. The Kenya Private Sector Alliance estimated daily losses of KSh 3 billion (approximately US$23 million) during protests in June 2025, as commerce ground to a halt. Foreign direct investment (FDI) inflows dropped by KSh 35 million (US$3 million) in June 2025, breaking a streak of net inflows. Furthermore, between September and December 2024, foreign investors withdrew KSh 16 billion from the Kenyan economy, primarily due to political tensions. Sectors such as tourism and infrastructure have been particularly vulnerable, with the Kenya Tourism Board reporting a 14% decline in international arrivals during peak 2024 travel periods.
The government's response to protests has often involved the use of force. In 2024, 60 people were killed and hundreds injured due to excessive police force during demonstrations against the Finance Bill. Over 600 protesters were arbitrarily arrested and detained, with dozens reportedly forcibly disappeared. The deployment of the army to assist in policing protests, as seen in June 2024, has raised constitutional concerns, as such measures are typically reserved for emergencies or to restore peace with parliamentary approval.
Corruption and weak governance continue to be significant impediments to development. Transparency International's 2022 Global Corruption Perception Index ranked Kenya 123 out of 180 countries, highlighting persistent claims of corrupt dealings in land transactions and government contracts. These issues, coupled with government inefficiency and weak regulatory and judicial systems, contribute to a challenging business environment.
Analysts emphasise the need for clarity on timelines, costs, and safeguards related to policy execution. The ongoing political instability influences public debate and policy implementation, creating uncertainty for businesses and investors.
Despite these challenges, Kenya's economy has shown resilience in some areas. The country maintained a 4.8% growth rate in 2024 amidst political uncertainties and social unrest, with a projected growth of 5% in 2025. The services sector, particularly telecommunications and financial services, and agriculture continue to drive GDP growth. However, this growth is often limited by monetary tightening and fiscal consolidation efforts.
The long-term impact of sustained political instability on investor confidence and Kenya's ability to attract and retain foreign investment remains a critical concern. The effectiveness of current government strategies in addressing the root causes of civil unrest, such as high youth unemployment and cost of living, is yet to be fully seen. The balance between maintaining public order and upholding democratic rights to peaceful assembly also continues to be a point of contention.
Observers will be closely watching government actions regarding policy reforms, particularly those aimed at alleviating economic pressures on citizens. The handling of future protests and the adherence to constitutional provisions concerning the use of force and protection of human rights will be key indicators of political stability. The upcoming presidential and legislative elections in 2027 will also be a significant event to monitor for potential shifts in the political landscape.
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