Global ratings agency S&P Global has revised Kenya’s long-term sovereign credit rating to ‘B’ from ‘B-’, pointing to stronger foreign exchange reserves and easing near-term external financing risks.
In its latest assessment, S&P cited robust export earnings and rising diaspora remittances as key factors that have bolstered Kenya’s external position.
“Robust export earnings and diaspora remittances have strengthened Kenya’s FX reserves position, helping to ease liquidity risks related to high external imbalance,” the agency noted.
The stable outlook, S&P said, reflects expectations that resilient growth and reduced liquidity pressures will offset elevated borrowing costs and the government’s ongoing struggle with fiscal consolidation.
Kenya’s foreign reserves climbed to $11.2 billion (Sh1.46 trillion) in July 2025, nearly doubling from $6.6 billion at the end of 2023. The current account deficit also narrowed sharply, falling to 1.3% of GDP in 2024 compared with 2.6% a year earlier.
Debt management measures have further supported the improved outlook. In February, Nairobi issued and partially bought back a $1.5 billion Eurobond, reducing annual repayments through 2027 to just $108 million, down from nearly $300 million.
External debt amortisations are projected to remain manageable at $2.7 billion in the year to June 2026 and $3.8 billion in 2027.
Domestically, the Central Bank of Kenya has eased policy since August 2024, cutting interest rates by 350 basis points to 9.5%.
The move has lowered yields on short-term treasury bills to 8%, from 16% a year earlier, easing government borrowing costs. Inflation has remained contained at 4.1%, while credit to the private sector has begun to recover.
S&P cautioned, however, that Kenya’s rating could come under renewed pressure if foreign reserves weaken or refinancing risks rise.
Sustained fiscal discipline, it added, could pave the way for further upgrades.
