According to S&P Global Ratings, Kenya is among African countries facing debt pressures that could weaken local currencies. External debt repayments across the continent are set to exceed USD 90 billion in 2026. This surge may intensify pressure on the Kenyan shilling, currently trading at around Ksh129 per US dollar.
A recent S&P Global Ratings report highlights that African countries, including Kenya, Egypt, Angola, South Africa, and Nigeria, face substantial external debt obligations that could boost demand for foreign exchange. These repayments are projected to surpass Ksh11.61 trillion (USD 90 billion) in 2026, over three times the 2012 level. The increase may deplete reserves and elevate rollover risks.
For Kenya, the need to acquire more dollars for debt servicing could further strain the shilling, with experts forecasting it might approach Ksh134 per dollar. A depreciating currency would raise import costs for essentials like fuel, machinery, and food, thereby fueling inflation and higher living expenses.
Nevertheless, Kenya has adopted liability management tactics such as debt buybacks, exchanges, and maturity extensions to mitigate refinancing strains. Key upcoming payments include a Ksh116.11 billion (USD 900 million) Eurobond due in May 2027 and a Ksh129 billion (USD 1 billion) one in February 2028. The 2025/26 fiscal budget allocates Ksh246 billion for external debt service and Ksh851 billion for domestic bonds and Treasury bills, totaling over Ksh1.09 trillion. Domestic maturities alone could range from Ksh400 to 600 billion. Kenya's total debt stood at Ksh11.8 trillion as of June last year.
Experts note that structural issues like elevated debt levels and limited revenue bases remain significant risks, though average sovereign ratings in the region have edged up slightly due to reforms and economic growth.
