National Treasury
Global credit ratings agency S&P upgraded Kenya’s long-term sovereign credit rating to ‘B’ from ‘B-‘.
The agency on Friday cited the upgrade to reduced near-term external liquidity risks, stronger foreign exchange reserves, and resilient economic growth.
S&P explained that Kenya’s foreign exchange reserves have been boosted by strong export earnings and steady remittances from the diaspora, helping cushion the economy against pressures from external imbalances.
“Robust export earnings and diaspora remittances have strengthened Kenya’s foreign exchange (FX) reserve position, helping to ease liquidity risks related to high external imbalances.
“Eurobond amortisation will remain manageable over 2025-2027, supported by debt liability operations earlier this year,” the Credit Rating Agency said.
S&P also said it expects Kenya’s solid economic growth and improved liquidity outlook to offset pressures stemming from high interest costs and a slow fiscal consolidation process.
In 2024, the credit rating agency downgraded Kenya’s sovereign credit rating from B to “B- citing uncertainties in Kenya’s future economic stability and debt management.
The downgrade was a direct response to President William Ruto’s decision to abandon the Finance Bill 2024, which aimed to generate Ksh346 billion through new taxes.
“The downgrade reflects our view that Kenya’s medium-term fiscal and debt outlook will deteriorate following the government’s decision to rescind all tax measures proposed under the 2024/2025 Finance Bill,” S&P said.
President William Ruto said on Wednesday that Kenya’s economic growth this year is expected to exceed official forecasts despite higher U.S. tariffs and other challenges.
The Head of State explained that the economy is expected to grow by 5.6% this year, he added, which is above the Kenyan finance ministry’s forecast of 5.3% and the central bank’s projection of 5.2%.
