Fitch Rankings has affirmed Kenya’s Lengthy-Time period Overseas-Forex (LTFC) Issuer Default Score at ‘B-’ with a Steady Outlook, citing the nation’s strong medium-term progress prospects, comparatively diversified financial system and a strengthening exterior liquidity place.
In a press release on Friday, the worldwide ranking company stated the ranking displays Kenya’s resilience in contrast with friends, underpinned by rising official foreign-exchange reserves and proactive debt-management measures.
“These strengths are balanced in opposition to weak governance indicators relative to friends, together with dangers to social stability and public safety, excessive debt-servicing prices, and monetary consolidation constrained by a big casual sector alongside political and social challenges,” Fitch stated.
Fitch famous that stronger foreign-exchange reserves have helped scale back exterior financing dangers, whilst fiscal coverage challenges proceed to weigh on prospects for multilateral financing.
The company added that authorities liability-management operations have lowered near-term exterior liquidity pressures, though the general exterior debt-service burden stays elevated.
Exterior liquidity pressures have eased in current months, supported by the build-up of FX reserves and energetic refinancing efforts. Kenyan authorities partially refinanced the $1 billion Eurobond due in 2028 in October 2025 and the $900 million Eurobond maturing in 2027 in February 2025.
The federal government additionally transformed a part of its US dollar-denominated debt owed to China’s Export-Import Financial institution into renminbi-denominated liabilities and renegotiated compensation phrases, producing estimated financial savings of about 0.1 p.c of GDP per 12 months.
Fitch estimates that gross foreign-exchange reserves rose to $12.4 billion at end-2025, supported by increased portfolio inflows and official loans, alongside sturdy export earnings, tourism receipts, remittances and up to date central financial institution FX purchases.
The company tasks that Kenya’s present account deficit will widen to 2.6 p.c of GDP in 2026, from an estimated 2.3 p.c in 2025, pushed by increased imports and rising exterior curiosity prices.
Regardless of this, Fitch expects FX reserves to cowl round 4 months of present exterior funds in 2026, supported by modest capital inflows.
Authorities exterior debt service—masking amortisation and curiosity—is forecast to rise to $5.3 billion (3.7 p.c of GDP) within the monetary 12 months ending June 2026, up from about $5.0 billion in 2025, earlier than easing to $4.5 billion (2.9 p.c of GDP) in full-year 2027.
Nonetheless, Fitch cautioned that exterior debt service is anticipated to climb again above $5 billion yearly between 2028 and 2030, retaining Kenya’s gross exterior financing wants elevated over the medium time period.
