President William Ruto used his third State of the Nation address to highlight what he described as a stabilising economy anchored on a stronger shilling, easing inflation, moderated public debt and lower fuel costs.
He reminded Parliament of the turbulence inherited in 2022, when inflation was edging towards double digits and the government of the day resorted to expensive, unsustainable subsidies to cushion Kenyans from soaring prices of essentials. Fuel shortages loomed as oil marketers struggled to secure dollars.
He recalled a period when the shilling was rapidly depreciating, foreign exchange reserves were at record lows and more than half of government revenue was being swallowed by debt repayments. Investor confidence had evaporated, and global analysts were openly predicting Kenya would eventually default. That, he said, was the backdrop against which his administration took corrective action.
Ruto argued that his reforms have since put Kenya on a steadier economic footing. Inflation has fallen from 9.6 percent to 4.6 percent, bringing relief to households. He claimed the price of basic goods has eased, noting that a 2-kg packet of maize flour now sells for under Sh150, down from about Sh200 when his administration came in.
He credited tighter foreign exchange management for keeping the shilling anchored at around Sh129 to the dollar for two years, which has lowered business costs for importers and passed savings to consumers. Foreign reserves, he noted, are now above $12 billion, the highest level on record.
On debt, Ruto pointed to the country’s early settlement of the $2 billion Eurobond maturing in June 2024, a move he said prevented a potential default and stabilised financial markets. Credit rating agencies have responded positively, with Standard & Poor’s upgrading Kenya’s long-term rating to B with a stable outlook, citing improved external liquidity supported by strong export earnings and diaspora remittances.
He also highlighted Kenya’s climb to become the sixth-largest economy in Africa, with GDP now at $136 billion, attributing this to deliberate policy choices and disciplined implementation.
Major global financial institutions such as J.P. Morgan, Standard Chartered and Goldman Sachs expect Kenya’s economy to grow by between 5 and 5.8 percent in 2026, forecasts Ruto said are underpinned by strong fundamentals, lower borrowing costs, rising exports, improved household spending and a stable macroeconomic environment.
On capital markets, the President praised the Nairobi Securities Exchange for its remarkable rebound, noting that investor wealth has risen by over Sh1 trillion this year alone, placing the bourse among the best-performing emerging markets worldwide.
He added that foreign direct investment has more than tripled, a sign of renewed investor trust and progress in improving the ease of doing business.
