NAIROBI, Kenya— Kenya has scored a major victory after S&P Global Ratings upgraded the nation’s sovereign credit standing to ‘B’ from ‘B-’, citing stronger reserve buffers and reduced short-term external funding pressures.
The international ratings firm highlighted export gains and consistent diaspora inflows as the main drivers behind the adjustment.
“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 stated.
“The stable outlook reflects our view that Kenya’s robust growth and reduced near-term external liquidity risks balance still-high interest costs and challenges in consolidating the government’s fiscal position.”
The move follows a marked strengthening of Kenya’s external accounts. Foreign exchange holdings climbed to $11.2 billion (Sh1.46 trillion) in July 2025, compared with $6.6 billion (Sh858 billion) at the end of 2023, while the current account gap narrowed to 1.3% of GDP in 2024 from 2.6% the year before.
In February, Nairobi carried out a $1.5 billion (Sh195 billion) Eurobond sale and repurchase program, trimming annual repayments to $108 million (Sh14 billion) through 2027 from $300 million (Sh39 billion) previously.
Based on S&P’s estimates, external debt service obligations will remain within reach at $2.7 billion (Sh351 billion) in the financial year ending June 2026 and $3.8 billion (Sh494 billion) in 2027.
At home, the Central Bank of Kenya has pursued an accommodative stance since August 2024, lowering the policy rate by 350 basis points to 9.5%.
That shift pushed down 91-day T-bill yields to about 8% in July 2025, from 16% a year earlier, cutting borrowing costs for the Treasury.
Price growth remained anchored at 4.1%, while lending to businesses is slowly gaining pace.
S&P warned that Kenya’s standing could weaken if reserve levels deteriorate or refinancing difficulties intensify.
On the other hand, stricter budget discipline and further deficit cuts could pave the way for additional upgrades.
