Kenya has secured a 25 billion yen facility, roughly equivalent to Ksh22 billion, through what is known as Samurai financing.
The announcement was made at the Ninth Tokyo International Conference on African Development, where Prime Cabinet Secretary Musalia Mudavadi signed the agreement with Nippon Export and Investment Insurance in the presence of President William Ruto and Japanese leadership.
This strategic move underscores Kenya’s mission to diversify funding sources, reduce costly borrowing, boost local industries and deepen infrastructural development.
Kenya’s interest in Samurai financing stems from its long-standing reliance on US dollar loans. As of December last year, 62 percent of Kenya’s external debt was denominated in dollars, while exposure to the yen was minuscule.
This skew leaves Kenya vulnerable to fluctuations in global dollar markets. By tapping into yen-denominated financing, Nairobi aims to mitigate currency risk, lower borrowing costs and strengthen macro‑financial stability.
The funds are earmarked for critical sectors that underpin Kenya’s sustainable growth agenda. Of the total, 15 billion yen (around Sh13.1 billion) will support the Ministry of Investment, Trade and Industry to develop local vehicle assembly, parts manufacturing, and technical training, reinforcing the National Automotive Policy’s goals of phasing out used car imports and promoting green automotive production.
Another 5.5 billion yen (approximately Sh4.8 billion) will be allocated to the Ministry of Energy to improve energy efficiency. This will be achieved by installing high-efficiency transformers to reduce the 23 percent average electricity transmission and distribution losses a development expected to lower power costs for households and businesses.
The remaining 4.5 billion yen (Sh3.9 billion) will go toward general budget support. This flexibility allows the government to direct resources toward other national development programs, enhancing fiscal stability amid shifting global financing dynamics.
The Samurai facility carries a seven‑year maturity period and is backed by NEXI, offering Kenya favorable terms in contrast to expensive dollar‑denominated debt. It forms part of a broader debt management strategy that moves beyond mere refinancing to focus on reducing borrowing costs.
Kenya is also exploring other instruments such as renminbi‑denominated Panda bonds and sustainability‑linked bonds.
This infusion of funding coincides with Kenya’s Bottom‑Up Economic Transformation Agenda, which aims to drive inclusive growth and shared prosperity through industrialisation, energy access, and sectoral innovation.
Kenyan leaders describe the Samurai loan as a “leap forward” in resource mobilisation through innovative, market-diversified financing channels.
In summary, Kenya’s embrace of Samurai financing reflects visionary fiscal stewardship reducing reliance on dollar borrowing, fostering local industries, cutting power losses, and unlocking new growth pathways. It is a bold structural move designed to prepare the nation for a more resilient and prosperous future.
Written By Ian Maleve
