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Published: 16-06-2025
Kenya’s construction sector is experiencing steady growth, driven by urbanization, infrastructure investment, and government-led initiatives under Vision 2030. The economy is projected to grow at around 5% annually, reaching a GDP of $140.3 billion by 2028. Inflation has eased to 4.5% in 2024, helping to stabilize construction input costs, while the urban population is expected to grow from 15.8 million in 2024 to 18.1 million by 2028—boosting demand for housing, transport, and utilities.
The sector is valued at $191.1 billion as of May 2025, with infrastructure (36%) and oil and gas (37%) projects dominating. Key initiatives include the $29 billion LAPSSET Corridor, Nairobi Expressway Phase 2, and the Affordable Housing Program targeting 500,000 units by 2027. Construction activity is heavily concentrated in Nairobi (63% of total value), followed by Mombasa, Kisumu, and Nakuru.
Public investment accounts for 93% of project funding, though public-private partnerships and foreign investment—particularly from China, the EU, and the UAE—are gaining traction. The construction sector contributed 5.4% to GDP in 2024 and is expected to reach $20.3 billion in output by 2028, supported by continued infrastructure rollout and urban development.
Opportunities are strong in affordable housing, renewable energy, smart cities, and logistics infrastructure. However, challenges persist, including land acquisition delays, high material costs, skilled labor shortages, and bureaucratic inefficiencies. Political risks ahead of the 2027 elections and regional security threats also pose potential disruptions.
In summary, Kenya’s construction sector holds strong long-term potential, supported by demographic trends, strategic public investment, and growing international partnerships. Realizing this potential will require regulatory reform, improved implementation, and expanded private sector participation.
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