Kenya’s graduation to middle-income status, officially recognized in 2014 when the country rebased its GDP, reflects its significant economic progress, with nominal GDP estimated at USD 110 billion in 2024 and a per capita income exceeding USD 2,100. Yet, this growth belies persistent vulnerabilities: Kenya’s investment needs to achieve Vision 2030 and the Medium-Term Plan IV (MTP IV)—the final plan under Vision 2030, running from 2023 to 2027—are estimated at over 25% of GDP annually, while current domestic savings and fiscal allocations fall short, leaving an investment financing gap of over 9% of GDP each year (equivalent to about USD 10 billion).

Compounding these challenges, Kenya faces diminishing Official Development Assistance (ODA) and declining donor commitments. For instance, ODA flows have dropped from 4.7% of GNI in 2015 to about 3.2% in 2023, reflecting global fiscal tightening and shifting donor priorities. As a result, Kenya must increasingly rely on international and domestic capital markets to finance its development agenda.

However, Kenya’s sovereign credit ratings—currently B/B2/B+ as assigned by S&P, Moody’s, and Fitch, respectively—have remained stagnant over the past five years, despite periodic downgrades due to rising debt service costs and fiscal pressures. This constrained rating profile has led to higher borrowing costs: for example, Kenya’s June 2021 Eurobond was priced at 6.3%—significantly above peer countries like Senegal (5.7%)—with yields driven by a perceived elevated country risk premium and credit spread. Debt service as a share of revenues has grown from 28% in 2018 to over 32% in 2023, further squeezing fiscal space and threatening to crowd out critical investments in infrastructure, health, education, and climate resilience.

These challenges have been central to recent regional and international discussions. The United Nations Development Programme (UNDP) Regional Capacity Building Workshop, held in Addis Ababa in September 2024, and the African Peer Review Mechanism (APRM) Africa Annual Conference on Credit Ratings, held in Cape Town in April 2025, highlighted the urgency for African countries, including Kenya, to strengthen their technical capacity, build institutional frameworks for transparent engagement, and proactively address rating agency concerns. For Kenya, improving sovereign creditworthiness is no longer a financial technicality—it is a national priority to unlock the low-cost capital needed to achieve inclusive and sustainable development. 

The Africa Credit Ratings Initiative is a flagship effort led by UNDP to support African countries in improving their sovereign creditworthiness and accessing development finance on fairer terms. Through a combination of technical assistance, regional workshops, research, and partnerships at regional and global levels, the initiative aims to strengthen institutional capacity, promote data transparency, and address methodological subjectivities that contribute to inflated risk premiums. With support from the Government of Japan, the initiative works closely with governments, rating agencies, and regional bodies to ensure countries are not only better prepared for rating assessments but also empowered to shape the narratives that influence investor perception.