President William Ruto has reiterated that the painful economic decisions taken by his administration on debt repayment have enabled Kenya to recover significantly and rise to become one of Africa’s top economic performers. Speaking at State House on Tuesday while receiving the Jukwaa la Usalama report, President Ruto said Kenya had been on the brink of a debt crisis due to ballooning external loans, warning that the country risked defaulting before corrective action was taken. He revealed that Kenya was among six African nations predicted to default, but his administration took firm steps to prevent that outcome.
Today I can confidently tell you our economy is on sound footing. Had I not made those decisions, we would be among the countries that defaulted on their debts
President Ruto‘Painful Decisions’ Helped Avoid Default
President Ruto recalled a crucial meeting at State House, which he referred to as “office number 6” where he and other leaders agreed that Kenya could not afford to default. Foreign reserves had reduced to $5.7 billion and everybody believed Kenya would not be able to pay its debt,” he said. “I had to make very difficult decisions
According to the President, the decisions taken have resulted in:
- Inflation dropping from 9.6% to 4.6%
- Dollar reserves increasing to $12.1 billion, the highest in Kenya’s history
- The shilling strengthening from Ksh 167 to Ksh. 129 to the dollar
He maintained that although the reforms were painful in the short term, their long-term benefits outweigh the temporary discomfort.
IMF Projects Strong Growth for Kenya
The International Monetary Fund (IMF), in its October 2025 World Economic Outlook (WEO), ranked Kenya sixth among Africa’s largest economies. The IMF projects Kenya’s GDP in 2026 to reach $140 billion (Ksh. 18 trillion), up from $136 billion (Ksh. 17.5 trillion) in 2025 — using an exchange rate of $1 = Ksh 129.
S&P Upgrades Kenya’s Credit Rating
Global financial agency Standard & Poor’s (S&P) upgraded Kenya’s long-term sovereign credit rating from ‘B-’ to ‘B’, citing improved external liquidity and strong economic indicators. The agency noted that Kenya’s near-term external liquidity risks had lessened due to:
- Revised external data
- Strong coffee export performance
- Increased diaspora remittances
Additionally, S&P highlighted Kenya’s successful $1.5 billion Eurobond issuance and buy-back operation in February 2025. The move reduced Eurobond repayment obligations for the 2025–2027 period to $108 million (Ksh.13.9B) annually from $300 million (Ksh.38.7B).
