The National Treasury of Kenya said on Monday that the recent downgrade of the country's credit rating has significantly impacted its ability to borrow commercial loans from various credit sources. Rating downgrades lead to increased borrowing costs, limiting access to credit markets, low investor confidence, currency depreciation, and debt sustainability risk, the Treasury said in its 2025 Public Debt Management Strategy released in Nairobi, Kenya's capital. In August 2024, the global credit ratings agency Standard & Poor's downgraded Kenya's long-term sovereign credit rating to B- from B due to weaker fiscal consolidation and increasing public debt. The National Treasury said that Kenya's public debt remains sustainable but with a high risk of debt distress, as the nation's present value of public debt was 63 percent of the gross domestic product (GDP), against the benchmark debt threshold of 55 percent of debt to GDP. The institution stated that it has to bring the present value of the public debt within the threshold until Nov. 1, 2028. It also said that due to the downgrade, it intends to borrow 25 percent of its gross borrowing from external sources and 75 percent from the domestic market during the period.
