NAIROBI, Kenya, Aug 23 – Global credit rating agency S&P has revised Kenya’s long-term sovereign credit rating to ‘B’ from ‘B-’, citing stronger foreign exchange reserves and easing near-term external financing risks.
The ratings agency pointed to stronger export receipts and remittance inflows as key factors supporting the upgrade.
“Robust export earnings and diaspora remittances have strengthened Kenya’s FX reserves position, helping to ease liquidity risks related to high external imbalance,” read a report by S&P in part.
“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.”
According to the rating agency, the revision comes after Kenya’s external position improved significantly.
Foreign reserves hit$11.2 billion (Sh1.46 trillion) in July 2025, up from $6.6 billion(Sh858 billion) at the end of 2023, while the current account deficit narrowed to 1.3% of GDP in 2024, down from 2.6% a year earlier.
On debt management, the $1.5 billion (Sh 195 billion) Eurobond issuance and buy-back in February helped lower annual Eurobond repayments to $108 million through 2027, from $300 million (Sh39 billion) previously.
S&P projects external debt amortizations will remain manageable at $2.7 billion (Sh351 billion) in the fiscal year ending June 2026 and $3.8 billion (Sh494 billion) in 2027.
Domestically, the Central Bank of Kenya has eased policy since August 2024, cutting rates by a cumulative 350 basis points to 9.5%.
This reduced yields on 91-day treasury bills to 8% in July 2025 from 16% a year earlier; lowering the government’s borrowing costs.
Inflation remained contained at 4.1%, while credit to the private sector has begun to recover.
S&P cautioned that the rating could come under pressure if reserves weaken or refinancing risks rise.
Conversely, a stronger fiscal consolidation and sustained deficit reduction could trigger further upgrades.
