Kenya’s Treasury has criticised what it described as unfair or ill-informed credit ratings by foreign agencies that it says have inflated the country’s borrowing costs, The Standard reports.

Treasury Cabinet Secretary John Mbadi said the government would intensify engagement with global raters to ensure fairer assessments and lower debt-servicing expenses.

Sovereign credit ratings determine how much governments pay to borrow internationally. Biased or inaccurate assessments can raise yields, forcing countries to divert resources from development projects to debt repayment.

Speaking at a sovereign credit-rating workshop in Mombasa, Mbadi announced that Kenya would establish a fully resourced Credit Rating Committee to coordinate and domesticate the rating agenda.

“Rating defence requires a well-prepared narrative that acknowledges risks while outlining actionable responses and demonstrating reforms, particularly when seeking positive rating adjustments,” he said as quoted by The Standard.

Mbadi added that lower debt-servicing costs would free up funds for infrastructure, agriculture, and climate resilience. He said that Kenya’s improved fiscal perception and stable outlook reflected reforms under the 2025 Finance Act, which enhanced tax compliance and strengthened fiscal credibility.

Fitch Ratings in September 2025 affirmed Kenya’s Long-Term Foreign-Currency Issuer Default Rating at ‘B-’ with a stable outlook, maintaining the same level as its March 2024 review. The agency cited persistent fiscal pressures but noted that Kenya continues to meet its external obligations and maintain access to domestic funding.

As bne IntelliNews reported, Fitch Ratings warned of weak revenue mobilisation and rising debt-service obligations. The agency projected Kenya’s fiscal deficit will reach 5.2% of GDP in FY26, above both the government’s target and the 3.6% median for similarly rated peers.

Moody’s Investors Service, in a separate review in July 2025, also maintained Kenya’s sovereign rating at ‘B3’ with a stable outlook, warning that a rising debt-service burden and reliance on domestic borrowing continue to weigh on fiscal flexibility. Moody’s noted that nearly two-thirds of fiscal financing—just under 4% of GDP annually—is expected to come from domestic markets, which could raise repayment risks.

Mbadi noted that Kenya’s reclassification by the World Bank to lower-middle-income economy in July 2014, following a GDP rebasing exercise, meant the country no longer qualifies for the most concessional International Development Association (IDA) loans, relying more on market and semi-concessional sources.

The Mombasa forum brought together the United Nations Development Programme (UNDP), the Government of Japan, AfriCatalyst, the African Peer Review Mechanism, and representatives of leading credit-rating agencies. Kenya, identified as a focus country for 2025, has already participated in specialised engagements in Addis Ababa and Cape Town.

UNDP pioneered the Credit Rating Initiative in Africa in 2005, enabling at least 18 countries to secure their first sovereign ratings. The programme supports governments in presenting data-driven narratives to raters and improving fiscal transparency. AfriCatalyst, an independent development advisory firm, works with African governments on financing, debt management, and economic reform.