Kenya has received a major vote of confidence after global credit ratings agency S&P Global upgraded the country’s long-term sovereign credit rating from ‘B-’ to ‘B’. The move, announced on Friday, signals renewed optimism about Kenya’s economy, particularly its improved external liquidity and growing foreign exchange reserves.

Internal Security and National Administration Principal Secretary Raymond Omollo praised the upgrade, describing it as a strong endorsement of President William Ruto’s leadership and economic reforms.

“Global credit ratings agency S&P has upgraded Kenya’s sovereign credit rating to B from B- (minus), a strong endorsement of President William Ruto’s leadership and economic reforms,” Omollo posted on his X account on Saturday, August 23, 2025.

He noted that the recognition showed Kenya was steadily regaining global confidence while delivering tangible benefits for its citizens.

The improved rating comes with a stable outlook, meaning S&P expects Kenya to manage its debt obligations in the near term while benefiting from better access to international markets. The agency cited strong performances in exports and diaspora remittances, which helped strengthen foreign reserves to a record-high of $11.2 billion (Sh1.5 trillion) in July 2025, up from Ksh852.72 billion at the end of 2023.

Eurobond buy-back eases burden

Another factor behind the positive review was the government’s February 2025 Eurobond buy-back, which eased repayment pressures. According to S&P, this reduced Kenya’s Eurobond obligations over the next two years from Ksh38.760 billion annually to about Ksh13.953 billion, creating more manageable debt levels.

Kenya’s economy is now projected to grow by 5.6 per cent in 2025, higher than both the central bank’s and Treasury’s earlier forecasts. This growth has been supported by contained inflation, steady exports such as coffee, and stable exchange rate conditions.

The Central Bank of Kenya has also played a role by easing monetary policy. Since August 2024, it has cut its key lending rate by 350 basis points to 9.5 per cent. As a result, domestic borrowing costs have fallen, with treasury bill yields dropping from 16 per cent a year ago to around eight per cent by July 2025.

However, S&P warned that challenges remain. Rising interest costs and a slow fiscal consolidation process could still weigh on public finances. The agency cautioned that ratings could be revised downwards if foreign reserves fall or if Kenya undertakes debt operations that are seen as distressed.

Even so, the upgrade marks a turning point for Kenya, reinforcing investor confidence and positioning the country as a more attractive destination for global capital.