Kenya plans to raise $1 billion through a debt-for-food security swap by March 2026, according to a finance ministry document released on Tuesday.
- Kenya plans to secure $1 billion through a debt-for-food security swap by March 2026.
- The arrangement allows debt restructuring into cheaper facilities invested in food-related programs.
- Kenya also aims to issue $500 million sustainability-linked bonds by March 2026.
- The country anticipates borrowing $757 million and $457 million from the World Bank within the next two years.
Kenya plans to raise $1 billion through a debt-for-food security swap by March 2026, according to a finance ministry document released on Tuesday.
“In managing external debt, the government will prioritize non-market-based measures, including debt-swap arrangements, which restructure existing obligations without creating new debt, thereby alleviating medium-term fiscal pressures,” the ministry said.
The document did not specify the parties involved, though Finance Minister John Mbadi said in April that Nairobi was in advanced talks with the World Food Programme on a potential deal, according to a Reuters report.
Debt-for-food security arrangements allow governments to restructure existing debt into cheaper facilities, typically backed by external partners, on the condition that the savings are directed toward food-related programs.
If completed, the swap would mark the second of its kind, following a €60 million agreement with Germany in 2024.
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East Africa’s largest economy has been diversifying its funding sources as it navigates volatile global markets and elevated U.S. interest rates.
In addition to the planned debt-for-food swap, the finance ministry said Kenya intends to issue $500 million in sustainability-linked bonds by March 2026, further showing its push to expand financing options.
In addition, it expects to borrow $757 million from the World Bank by March 2025 and a further $457 million by June next year.
Economic stability under pressure
The country has so far managed to preserve relative macroeconomic stability, despite persistent fiscal challenges. A diversified economy, a strong financial sector, and a comparatively stable exchange rate have helped Kenya maintain its lead in East Africa’s economic race.
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Yet, cracks are emerging. After nearly a year of subdued inflation, consumer prices are once again on the rise, casting doubt on the durability of recent interest rate cuts.
According to the Kenya National Bureau of Statistics, annual inflation accelerated to 4.1% in July 2025, a three-month high compared to 3.8% in June.
The inflationary surge is partly due to the scarcity of vital food products, particularly maize, potatoes, and green vegetables, which account for a sizable share of the ordinary Kenyan household’s diet.
