Global ratings agency S&P Global has upgraded Kenya’s long-term sovereign credit rating from ‘B-’ to ‘B’, citing a reduction in near-term external liquidity risks.
On Friday, the agency said 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," the Credit Rating Agency said.
"Eurobond amortisation will remain manageable over 2025-2027, supported by debt liability operations earlier this year."
S&P said it expects Kenya’s healthy economic growth and improved liquidity outlook to balance out challenges posed by high interest payments and a gradual pace of fiscal consolidation.
The agency maintained the country’s outlook as "stable.”
It stated that the 2024 downgrade was a direct response to President William Ruto’s decision to abandon the Finance Bill 2024, which aimed to generate Sh346 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.
On Wednesday, Ruto projected that the country’s economy would expand by 5.6 per cent in 2025.
He noted that this outpaced the Treasury’s forecast of 5.3 per cent and the Central Bank of the country's estimate of 5.2 per cent.
"GDP (gross domestic product) is expected to grow 5.6% this year, despite global domestic headwinds arising from escalating tariffs and trade disruptions affecting many economies," Ruto said at the Japan-Africa leaders conference in Yokohama.
