Nearly half of Kenya’s medium-sized businesses face pressure to offer gifts to public officials to obtain government services, permits and other processes, according to a new World Bank report.
The findings raise fresh questions about the real cost of doing business in Kenya, where companies trying to grow may face an additional burden before they can expand, innovate or create jobs.
The World Bank’s November 2026 Kenya Economic Update found that 48.2 per cent of medium-sized firms, employing between 20 and 99 workers, reported being expected to give gifts to public officials “to get things done”.
The figure is more than twice the average of 19 per cent recorded among medium-sized firms across Sub-Saharan Africa and four times the 11.9 per cent reported across all economies covered by the comparison.
The report’s findings suggest that businesses in the critical growth stage between small enterprises and large corporations may be particularly exposed to corruption-related pressure.
The World Bank says medium-sized businesses appear to face especially strong pressure because their expansion brings them into more frequent contact with public institutions.
As companies grow, they require more permits, licences and access to land. Those interactions can create opportunities for officials to demand unofficial payments, the report explains.
“Growing firms will need more permits, licenses, and access to land compared to smaller firms,” the report states.
It adds that expanding businesses can become attractive targets for officials who see them as having more resources to pay bribes, but less protection and direct access to senior decision-makers than larger companies.
The figures show that the pressure is not limited to medium-sized enterprises. Some 35.7 per cent of small firms, employing five to 19 people, also reported being expected to give gifts.
Among large firms with at least 100 employees, the figure stood at 30.7 per cent.
However, the gap between Kenya and its regional peers is particularly striking for medium-sized businesses. In Sub-Saharan Africa, 19 per cent of firms in this category reported the same expectation, compared with Kenya’s 48.2 per cent.
Beyond the money businesses may lose through unofficial payments, the World Bank warns that corruption can undermine their ability to grow, train workers and introduce new products.
Analysis of the 2025 Kenya Enterprise Survey found that firms expected to give gifts or that had experienced bribery requests were less likely to provide formal employee training, introduce product or process innovations, or invest in research and development.
The report says firms that experienced at least one bribery request were between five and 10 percentage points less likely to provide formal training or introduce a new product.
They were also five percentage points less likely to introduce a new production process.
The consequences extend to business performance. Firms reporting bribery requests or informal payments recorded lower growth in labour productivity and sales, with the report estimating differences of between two and four percentage points.
The World Bank describes the impact as substantial, warning that corruption can undermine the transition towards formal businesses and the creation of new formal jobs.
That matters in an economy where growing firms are expected to expand employment opportunities.
The report argues that stronger governance and control of corruption could reduce the costs and uncertainty facing businesses.
For entrepreneurs in Nairobi, Mombasa, Kisumu and other commercial centres, the findings raise a practical question: how much harder is it for a business to grow when accessing public services comes with expectations of unofficial payments?
The World Bank says improvements in governance can generate economic gains by reducing the costs and uncertainties faced by firms.
But the findings also point to the need for accountability beyond policy promises.
Business owners, particularly those running medium-sized enterprises, can help establish how these demands occur, which public processes are most affected and whether unofficial payments delay investment or recruitment.
The report does not establish that every firm pays a bribe, nor does it identify every institution responsible. Its findings measure firms’ reported expectations and experiences.
Still, the central warning is difficult to ignore: when nearly half of medium-sized businesses say they are expected to give gifts to get things done, corruption is not simply an ethical concern. It is a potential obstacle to business growth, productivity and job creation.
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