Digital Transformation Emerges as the Engine of Kenya’s Economic Growth in 2026

Kenya, January 26, 2026 - Kenya’s economic outlook for 2026 is increasingly being shaped not by commodity cycles or external aid, but by the steady expansion of its digital economy. As global growth remains uneven, wider adoption of digital technologies and artificial intelligence is expected to provide the productivity gains needed to sustain momentum.

According to the Mastercard Economics Institute’s Economic Outlook 2026, Kenya is well positioned to benefit from easing inflation, resilient consumer demand and accelerating use of digital platforms across key sectors. The report points to technology-led efficiency as a central factor supporting growth, particularly as businesses adapt to a more fragmented global economy.

Inflation in Kenya is projected to remain contained, supported by softer energy prices and a weaker U.S. dollar. This could give the Central Bank room to lower interest rates, easing access to credit and allowing firms to invest in digital tools that improve operations, expand reach and reduce costs. For many businesses, especially smaller ones, technology adoption is becoming less of a competitive advantage and more of a survival strategy.

Artificial intelligence and data-driven platforms are already reshaping how companies operate, from supply chain management and customer engagement to payments and logistics. Increased automation is helping firms manage rising input costs and labor pressures, while digital channels are opening new markets at lower cost than traditional expansion.

Small and medium-sized enterprises sit at the heart of this transformation. Digital payments, e-commerce platforms and cloud-based tools are enabling SMEs to formalize operations, access customers beyond their immediate geography and compete with larger players. However, the report notes that the benefits are uneven. Firms with higher digital readiness and strategic flexibility are pulling ahead, while those slower to adapt risk being left behind.