• S&P raises Kenya’s sovereign rating from B- to B with a stable outlook
• $900m Eurobond buyback and stronger reserves reduce liquidity risks
• Economy expected to grow 5.6% in 2025, above official forecasts

Standard & Poor’s (S&P) upgraded Kenya’s long-term sovereign credit rating from B- to B, assigning a stable outlook in a statement released on August 22.

The agency said the move reflects reduced short-term external liquidity risks. “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,” S&P noted.

“Eurobond amortization will remain manageable over 2025-2027, supported by debt liability operations earlier this year," the agency added. A recent round of monetary easing has also lowered domestic interest rates and spurred private sector credit growth.

In early 2025, the Kenyan government repurchased about $900 million of its Eurobonds maturing in 2027, financed by issuing a new Eurobond. The operation boosted investor confidence in the country’s ability to service international debt and eased repayment burden.

S&P said that strong medium-term growth and improved liquidity should offset challenges from high borrowing costs and a slow pace of fiscal consolidation.

President William Ruto stated on August 20 that Kenya’s economy is projected to expand by 5.6% in 2025 despite higher U.S. tariffs. This is higher than the Finance Ministry’s 5.3% estimate and the central bank’s 5.2% projection.

This new S&P note comes a year after the agency downgraded Kenya’s long-term rating from B to B- in August 2024, citing rising external debt risks following the withdrawal of a controversial finance bill that had proposed new taxes.