Kenya’s Informal Sector Contributes 36% to GDP, KNBS Reports

Kenya’s informal economy accounted for 36% of GDP in 2023—equivalent to Ksh5.8 trillion—according to a landmark KNBS study released in January 2024. The sector employs 83% of the workforce, with key activities including street vending, boda-boda transport, and micro-manufacturing. Kakamega, Kisumu, and Nairobi recorded the highest informal output. Despite its size, only 12% of operators are registered for tax or social protection. The government plans to digitize informal businesses via the Huduma Namba-linked BizPortal by 2025. Economists stress that formalization must be incentive-driven, not punitive, to avoid pushing workers deeper underground. The data will inform BETA’s inclusive growth metrics.