How Kenya Is Advancing Inclusive Economic Development through Public Procurement

SUMMARY
Public procurement reform doesn’t just combat corruption—it can also address inequality. Greater inclusion, especially in the public procurement process, offers a critical opportunity for governments to deliver on large-scale investments for a more resilient, equitable economy while reinforcing anti-corruption reforms. Learn how Kenya aims to increase the proportion of contracts awarded to marginalized groups while improving the interoperability of its procurement system in its current open contracting commitment.

Kenya is undergoing rapid transformation, with its digital economy projected to reach USD 5.13 billion by 2028. However, this growth must be inclusive, as marginalized groups face significant barriers to participating in an increasingly digital society. Greater inclusion, especially in the public procurement process, offers a critical opportunity for the Kenyan government to deliver on large-scale investments for a more resilient, equitable economy while reinforcing anti-corruption reforms.

However, corruption in government contracting poses a threat to its transformative potential, given that public procurement accounts for 60 percent of Kenya’s annual budget. By one estimate, corruption cost Kenya between USD 3.8 billion in 2024, with high-profile cases like the Kiambu County public procurement scandal demonstrating its pervasiveness. When corruption is allowed to thrive, public services for women, youth, and other marginalized groups tend to suffer from the drain on public finances. Opaque public procurement systems also prevent these groups from accessing opportunities that can help build their economic independence.

Kenya is committed to making its public procurement more inclusive and open through its membership in the Open Government Partnership (OGP). Through its current open contracting commitment, the government aims to increase the proportion of contracts awarded to marginalized groups while improving the interoperability of its procurement system.

Public Procurement Reform in Kenya

To make the public procurement process more inclusive, Kenya introduced the Access to Government Procurement Opportunities (AGPO) program in 2013. The AGPO program reserves 30 percent of government contracts for businesses owned by marginalized groups, simplifies procurement processes, and tailors requirements to enhance participation. Yet over a decade later, the 30 percent target remains largely unmet.

One issue is that AGPO has often been manipulated by politically connected individuals who register proxy companies under the names of people from target groups to illegitimately access reserved tenders. Another is that system-wide barriers to participation persist, such as the lack of access to cheap financing for small, less-formal businesses and the low capacity and lack of knowledge about opportunities among target business owners.

In fulfilling a commitment from its current action plan (2023–2027), the government took a major step forward by launching the e-Government Procurement (e-GP) platform in April 2025. Through this commitment, the government also aims to increase awareness of the AGPO program and create a clearer public procurement process and guidelines for the groups targeted by the program. This progress can be traced back to the country’s second OGP action plan, which laid the groundwork for better, more inclusive open contracting practices. In the second action plan, Kenya launched the Public Procurement Information Portal (PPIP) in 2018, which serves as a central database of awarded contracts.

For John Mbadi Ng’ongo, Cabinet Secretary for the National Treasury and Economic Planning, “This reform has been seven years in the making, involving wide consultations with stakeholders including the private sector and development partners.”

The tool has been designed to digitize and automate the entire procurement process, from planning and tendering to payment, while consolidating procurement data across ministries, departments, agencies, and county governments. Its implementation is guided by the Open Contracting Data Standard to ensure that procurement information is published in a structured, accessible, and analyzable format. Suppliers can also be verified in real time during the required registration process, because e-GP is integrated with other government platforms.

These changes matter because they make it easier to connect public procurement data to other key data, like beneficial ownership information. Through these connections, civil society organizations (CSOs) can better support the monitoring and oversight of the public procurement system. Titus Gitonga, Program Coordinator at Transparency International Kenya, explains how through the e-GP system, “CSOs can verify procurement data, tracking project implementation, and identifying red flags for corruption.” For him, having this system in place enables “CSOs to help build the capacity of both the public and the media to scrutinize and understand procurement information.” This, in turn, can help catch instances of abuse that negatively impact the AGPO program.

The e-GP system is also expected to directly advance the AGPO program. By bridging access to procurement information and verifying eligibility, the system can ensure that targeted groups can transition from the informal economy into more stable business opportunities, enabling those involved to improve their living standards. This will be achieved by increasing outreach and awareness to targeted groups as well as improving procurement alerts and platform accessibility.

Gitonga explains that “The e-GP system will be a game-changer for AGPO as it will simplify how special interest groups access tender opportunities.” He notes that “it adds a layer of transparency that builds trust and ensures public resources benefit the intended groups.”

Recommendations to Ensure Effective and Equitable Public Procurement

There are a few key challenges that Kenya must overcome to meet the goals of the AGPO program. On the technical side, beneficial ownership data is not currently available to the public and only about 40 percent of private firms are compliant. As organizations like the Open Contracting Partnership and Open Ownership explain, making this information accessible, accurate, and complete helps governments prevent corruption, increase economic stability, and promote competition. Following open data practices in public procurement will make it easier to achieve data interoperability, which will make it harder for bad actors to use proxy companies to submit bids for contracts reserved for marginalized groups.

“If we’re serious about reducing waste, beneficial ownership data and open contracting can’t be treated separately…You can’t have meaningful openness in contracting without knowing who’s behind the companies. Interoperability between these systems is essential to build trust and accountability,” says Gitonga.

Additional support is also needed to involve more businesses owned by marginalized groups in the public procurement process. For one, even though computer access is low outside of urban areas, especially for women, many Kenyans have access to a mobile phone and use the M-PESA payment system. According to Edwin Muhumuza, Head of Africa at the Open Contracting Partnership, the government can build on this existing foundation to simplify the e-GP platform and make it easier for target business owners to compete. He says, “In Tanzania, their e-procurement system has a mobile version for simpler procurements that can be accessed on a phone, which is easier to use. I would fast-track the rollout of the e-procurement platform, ensuring that there’s a mobile version.”

Another recommendation is to make public procurement opportunities more accessible. For Muhumuza, this could take several forms—increasing access to cheap credit or financing, tendering contracts for smaller amounts to make them more manageable for smaller businesses, and investing in a wider capacity-building strategy for targeted groups.

A Future of Transparency and Accountability

Kenya’s open contracting commitment is part of their wider policy ambitions related to national development, including Vision 2030 and the Bottom-Up Economic Transformation Agenda. Both plans place digital innovation at the heart of inclusive growth as a way to rebuild public trust and drive inclusive economic transformation. The e-GP platform has a key role to play in this broader digital innovation strategy.

During the platform’s launch, Cabinet Secretary John Mbadi Ng’ongo emphasized that the system contributes to the government’s broader goal of delivering 80 percent of public services online. Improving public procurement efficiency through the e-GP platform can also help Kenya save over USD 665 million (KES 85.9 billion) annually, about 0.9 percent of its GDP.

With the right policy, technical, and political support, the e-GP platform could significantly curb corruption, inefficiency, and inequality. Strong coordination within government and in collaboration with civil society is critical to ensure the e-GP platform delivers on its promises, especially when it comes to making public procurement more inclusive and equitable.