Kenya’s economic growth remains heavily concentrated in a handful of counties, with Nairobi commanding more than a quarter of national output while Wajir, Mandera and Turkana trail far behind amid limited investment, weak infrastructure and widespread poverty, according to a new development report.
The 2026 County Development Index (CDI) places Nairobi at the top of the economic performance rankings with a score of 0.96 and a Gross County Product (GCP) exceeding Sh4.1 trillion. The capital contributes 27.5 per cent of Kenya’s Gross Domestic Product (GDP), reflecting its dominance in finance, manufacturing, professional services and formal business activity.
Kiambu takes second place with a score of 0.89 and an economic output of Sh819.8 billion, while Nakuru follows at 0.87 with Sh771.8 billion. Mombasa ranks fourth at 0.84, recording Sh711 billion, and Nyeri completes the top five with a score of 0.81 and Sh265 billion.
The strong showing by Kiambu and Nakuru is linked to their closeness to Nairobi, a well-established manufacturing sector, active commercial markets and substantial private investment.
Mombasa's economic strength, meanwhile, reflects its position as the country's principal port and a major centre for trade and services. Manufacturing and services account for approximately 75 per cent of the coastal county's output.
The report uses an Economic Performance and Livelihoods Index to assess county economies beyond their total production levels. Its eight indicators cover GCP, each county's contribution to national GDP, labour force participation, youth unemployment, economic diversification, poverty levels, multidimensional poverty and the business environment.
GCP measures the value of goods and services produced within a county and is used to determine the overall size of its economy.
To arrive at the final scores, the indicators are standardised and assigned different weights, with results ranging from zero to one. GCP accounts for 20 per cent of the total, while labour force participation, youth unemployment and headcount poverty each carry a 15 per cent weighting.
The contribution to national GDP, the proportion of output from manufacturing and services, and multidimensional poverty each account for 10 per cent. The business environment makes up the remaining five per cent.
Other counties performing strongly include Meru, which scores 0.77 and records a GCP of Sh525 billion, and Machakos, with a score of 0.76 and Sh476 billion in output.
Murang'a and Uasin Gishu each score 0.76, with Uasin Gishu's GCP standing at Sh296 billion. Kirinyaga and Nandi follow with scores of 0.74 apiece.
The report links the performance of these counties to their range of economic activities, lower poverty levels, stronger participation in the labour market and business conditions that support investment.
"The top counties benefit from relatively diversified economic structures supported by manufacturing, commercial agriculture, logistics, wholesale and retail trade, education, tourism and professional services," the report released in Nairobi yesterday states.
However, the study identifies a different reality in northern and other arid parts of the country, where limited industrial development, inadequate infrastructure, high unemployment and low private investment continue to restrict economic progress.
Wajir records the lowest economic performance score in the country at 0.07, with a GCP of Sh69.6 billion. Mandera ranks next from the bottom at 0.09, with Sh88.4 billion, while Turkana posts a score of 0.12.
Samburu records 0.15 and an output of Sh36.8 billion, followed by Marsabit at 0.16 and Garissa at 0.18, with a GCP of Sh76.4 billion. Tana River scores 0.20, while Isiolo records 0.22 and Sh46.2 billion. West Pokot completes the group with a score of 0.25 and an output of Sh87.1 billion.
The low scores reflect limited economic diversity, weak business networks, high poverty and inadequate employment opportunities in the affected counties.
"Their low output reflects relatively small populations, limited industrial activity, low investment levels, dependence on livestock production and weak private sector development. These figures demonstrate the highly uneven spatial distribution of economic activity and underscore the importance of strengthening regional economic development to reduce concentration in a few counties," the report says.
The study was conducted by the SDG Kenya Forum with support from the Gates Foundation. It examines the relationship between economic performance and development, including employment creation, household earnings, poverty reduction, county revenue capacity and residents' quality of life.
Counties with a broader mix of economic activities, stronger labour markets, competitive business conditions and lower poverty rates are generally better positioned to sustain inclusive growth and improve living standards.
The Kenya National Bureau of Statistics identifies Nairobi as the country's main economic engine.
The wide differences in GCP point to the need for counties to expand their productive sectors, diversify their economies and increase the value of goods produced locally. Such measures could help boost output and improve household incomes.
The report calls on county governments to develop diversification plans that reflect their individual economic strengths. It also recommends improving agricultural value chains, expanding agro-processing and promoting manufacturing in rural areas with strong agricultural potential.
"Counties with diversified economies and stronger infrastructure perform better, while many dry counties face high poverty, limited economic diversification and weak labour-market opportunities. They should strengthen investment promotion and business-enabling systems to attract private sector investment," it says.
Narok leads in county financial management
The report also assesses how counties manage public finances, with Narok emerging as the strongest performer with a CDI score of 0.79.
Its position is supported by effective collection of revenue from local sources, strong budget implementation, a moderate wage bill and sound financial accountability.
Narok collects Sh4,800 per person in own-source revenue and has a budget execution rate of 95.5 per cent. Its wage bill accounts for 23.3 per cent.
Mombasa ranks second in fiscal management with a score of 0.69, followed by Nyeri at 0.68. Kirinyaga and Lamu each score 0.67, while Nandi records 0.63.
Turkana posts a score of 0.61, with Embu and Garissa each recording 0.60.
A larger group of counties falls within the moderate performance category. These are Siaya, Nakuru, Tana River, Uasin Gishu, Laikipia, Kilifi, Murang'a, Homa Bay, Tharaka Nithi, Trans Nzoia, Samburu, Meru, Kitui, Elgeyo Marakwet, Kiambu, Migori, Makueni, Bomet, Baringo, Kericho, Taita Taveta, Busia, Isiolo, Kwale, Kakamega, Marsabit, Kisumu and Nairobi.
Nyamira has the lowest fiscal management score nationally at 0.16.
The report attributes the county's poor showing to a wage bill that consumes 53.9 per cent, a budget execution rate of 53.8 per cent and low revenue collection from local sources.
Kisii is also among the weaker performers, scoring 0.22, followed by Kajiado at 0.28 and Mandera at 0.30. Bungoma, Machakos and Nyandarua each record a score of 0.33.
The fiscal rankings highlight differences in counties' ability to raise their own revenue, implement approved budgets and control spending. Together with the economic performance findings, they point to the importance of strengthening local production, improving infrastructure, attracting private investment and managing public funds more effectively.
The report recommends that counties combine economic development measures with better financial management to expand opportunities for residents and improve the delivery of public services.