Kenya’s inflation rate fell to 3.6% in September 2024, down from 9.6% in 2022, as oil pump prices and essential goods such as sukuma, maize flour, and fuel declined. Treasury Cabinet Secretary John Mbadi credited the shilling’s stability to key government actions, including a $2 billion Eurobond buyback, monetary policy adjustments, and a new Government-to-Government oil procurement deal.
The shilling’s rise from 160 to 128.7 units per dollar has reduced Kenya’s external debt by Sh40 billion per unit, lowering the debt-to-GDP ratio to 67%. President Ruto’s administration has also curbed dollar demand in the petroleum sector by $500 million monthly by enabling local oil marketers to receive credit from major suppliers.
Looking ahead, officials plan to stabilise the debt-to-GDP ratio at 55% by 2028 through budget consolidation, predictable tax policies, and partnerships. However, Moody’s recent downgrade of Kenya’s credit rating and an IMF call for tax reforms signal remaining challenges.
