Kenya could attract up to Sh194 billion in new private investment and create more than 80,000 jobs by addressing barriers holding back three sectors with strong growth potential, according to a new World Bank report.
The World Bank’s Private Sector Diagnostic report identifies avocado and mango value chains, coastal tourism and medical consumables manufacturing as areas where increased private investment could help Kenya compete more strongly in regional and international markets.
The report says unlocking the potential of the three sectors will require targeted measures to deal with challenges affecting investment, production, market access and business growth.
"The selected sectors align with the tourism, agriculture, and manufacturing priorities under Vision 2030, and the recommendations illustrate how sector-specific actions can help accelerate progress while deeper structural reforms advance," the report read in part.
Avocado and mango value chains
The World Bank said Kenya can generate more employment and attract additional investment in agriculture by moving away from exporting raw fruit and expanding processing and other higher-value activities.
For the avocado industry, the report recommends increasing fresh exports to European markets by making better use of Kenya’s counterseasonal harvesting periods, competitive production costs and existing export networks.
Mangoes, however, remain largely underused for processing and export. Only about 10 per cent of the country’s mango production is processed, while just three per cent is exported.
The World Bank wants private investors to establish and expand facilities that can produce mango pulp for juice manufacturers in Kenya and across the region.
It said processors seeking to grow their African markets can compete through shorter delivery periods, flexible order sizes and products designed around local consumer preferences.
The report also calls on exporters and processors to improve systems at farm level, including quality control, pest management and traceability, while investing in better packhouse operations to meet international phytosanitary requirements.
To ease pressure on investors’ cash flow, the World Bank recommended measures such as deferring import VAT on equipment used for processing.
The avocado and mango value chains have the potential to generate up to Sh21.6 billion ($167 million) in additional investment over 10 years, while creating 36,000 new and better-paid jobs.
Coastal tourism
Coastal tourism is another area the World Bank has identified as having room for major private-sector growth, given the region’s established tourism flows, natural attractions and cultural assets.
The report noted that Mombasa receives about 134,000 European visitors, compared with roughly two million from the same markets visiting similar long-haul beach destinations.
Although international arrivals through Mombasa have recovered strongly during the six years following the COVID-19 pandemic, the Kenyan coast continues to attract fewer visitors than Zanzibar, which is a major competing Indian Ocean destination.
In 2024, Mombasa recorded about 100,000 international arrivals, while Zanzibar received more than 600,000.
At the same time, coastal bed-nights in Kenya increased to about 25 per cent above pre-pandemic levels in 2024. The recovery was supported by the return of package tourism, new European markets, increased domestic travel and growing MICE tourism.
Despite the rise in visitor numbers, hotel investment along the coast has not kept pace with demand. New developments remain focused largely on Nairobi and safari destinations, while coastal hotel construction remains limited and many existing facilities are outdated.
The World Bank said private investors could expand the sector by adding and modernising accommodation while creating new tourism experiences and connecting beach holidays with Kenya’s established safari and business travel markets.
It recommended construction and upgrading of hotels, alongside investment in marine, cultural, golf and wellness tourism.
Operators could also develop combined bush-and-beach packages aimed at European tourists, domestic travellers, MICE visitors and high-spending safari tourists.
The report said stronger international air links would also help expand the market, with additional direct flights making the Kenyan coast easier to reach for international travellers.
To make the region more attractive to investors, the World Bank recommended clearly defined coastal tourism zones, better spatial planning, digitisation of land registries and stronger management of beach and marine assets.
According to the report, these steps would give investors greater certainty while helping improve the quality and competitiveness of the coastal tourism industry.
The sector has the potential to attract between Sh49 billion ($380 million) and Sh72 billion ($560 million) in private investment and generate up to 14,000 additional and better-paid job equivalents.
Medical consumables manufacturing
Medical consumables manufacturing has been identified as having the biggest investment potential among the three sectors, with the World Bank projecting up to Sh101 billion ($780 million) in additional private investment over 10 years.
The sector could also generate about 33,200 additional and better-paid direct jobs during the same period.
The report said Kenya has an opportunity to establish itself as a manufacturing centre for products such as gloves, syringes, gauze and intravenous kits, which are used in large quantities by healthcare facilities but are mostly imported across the region.
Kenya’s domestic market for medical consumables was worth about Sh55 billion ($430 million) in 2025 and is expected to grow to approximately Sh70 billion ($540 million) by 2030.
Manufacturers could also use Kenya as a base to supply neighbouring and regional markets, including Uganda, Tanzania, Ethiopia, Somalia and South Sudan, while seeking opportunities in wider African and global markets.
However, the World Bank identified complex and unpredictable regulations as a major challenge for investors in the sector.
It said overlapping requirements and lengthy approval processes raise the cost of setting up and expanding manufacturing businesses.
The report recommended simplifying the regulatory system, including introducing a tiered approach that would allow Kenya to recognise approvals issued by approved reference regulatory authorities.
It also called for more predictable government procurement to give manufacturers a clearer picture of future demand.
The World Bank recommended bringing together public-sector demand, improving forecasts of the products required and ensuring suppliers are paid on time.
Government procurement, it said, could provide a stable initial market for new manufacturers before they expand into private healthcare, donor-supported programmes and export markets.
Manufacturers were also encouraged to include environmental standards and circular-economy practices in their operations from the beginning, particularly when dealing with waste, chemicals, water and energy.
Across the three sectors, the World Bank said targeted reforms and increased private-sector participation could help Kenya unlock Sh194 billion in investment and more than 80,000 additional jobs over the next decade.