When President William Ruto took office in September 2022, Kenya was facing a dangerous combination of high inflation, a weakening shilling, depleted foreign-exchange reserves and growing concerns about the country’s ability to meet its external debt obligations.
Inflation had climbed to 9.6 per cent in October 2022, while the Kenyan shilling came under sustained pressure against the US dollar. Foreign-exchange reserves were also under strain, leaving the country with a limited buffer against external shocks.
The most immediate concern was debt. Kenya was heading towards a US$2 billion Eurobond repayment in 2024, raising fears that failure to meet the obligation could trigger a much deeper financial crisis.
Nearly four years later, the economic picture is markedly different.
Inflation has fallen substantially from its 2022 peak, foreign-exchange reserves have been rebuilt and the shilling has regained stability. Kenya also met the critical US$2 billion Eurobond obligation in 2024, avoiding the sovereign default scenario that had worried investors.
President Ruto has repeatedly argued that his administration inherited an economy on the verge of a financial crisis and had to make difficult decisions to stabilise it.
The numbers provide part of the evidence for that argument.
Kenya’s economy then and now
| Economic indicator | 2022 crisis period | Recent position | Change |
|---|---|---|---|
| Inflation | 9.6% | About 4% | Significant decline |
| Foreign-exchange reserves | About US$6–7 billion | More than US$12 billion | Major recovery |
| Shilling | Came under severe pressure, exceeding KSh160 per US dollar at its weakest point | Around KSh129–130 per dollar | Significant stabilisation |
| US$2 billion Eurobond | Major repayment looming in 2024 | Obligation met in 2024 | Default fears eased |
| Public debt | About KSh8.7 trillion in September 2022 | KSh12.86 trillion by April 2026 | Debt has continued rising |
| Fertiliser | About KSh7,000–7,500 per 50kg bag | About KSh2,500 under government subsidy | Major reduction |
Sources: National Treasury, Central Bank of Kenya and other economic reports. The figures represent different reporting dates and should therefore be read as an indication of direction rather than a like-for-like monthly comparison.
The contrast is particularly visible in inflation.
Kenya’s annual inflation rate stood at 9.6 per cent in October 2022. It subsequently fell sharply, reaching 2.7 per cent in October 2024, before settling at higher levels thereafter. Recent World Bank reporting put inflation within the 4–5 per cent range through April 2026.
That decline has been one of the government’s strongest arguments that its economic policies are working.
The first battle was stopping a debt crisis
One of Ruto’s biggest challenges was Kenya’s external financing position.
The country had to find a way to meet the US$2 billion Eurobond maturity due in 2024 at a time when borrowing costs were elevated and investor confidence was under pressure.
Kenya ultimately met the obligation.
The government also returned to international capital markets, helping refinance some of its obligations and reduce the immediate pressure surrounding the maturity.
The successful repayment did not eliminate Kenya’s debt problem, but it removed one of the most immediate threats to financial stability.
The distinction matters.
Kenya did not move from a debt crisis to a debt-free economy. Instead, the government managed to avoid the immediate default scenario while continuing to grapple with a very large debt burden.
By April 2026, total public debt had reached KSh12.856 trillion, equivalent to 69.4 per cent of GDP, according to the National Treasury’s monthly debt bulletin.
That means the economic rescue remains incomplete.
Ruto’s gamble on production instead of consumption
One of the administration’s most controversial decisions was its decision to move away from broad consumer subsidies and towards production-focused interventions.
The government scrapped the fuel subsidy and reduced its reliance on subsidies intended to keep consumer prices artificially low.
The policy was painful.
Fuel prices rose sharply, increasing transport and production costs and putting additional pressure on households already struggling with the cost of living.
But the administration argued that the subsidies were expensive and unsustainable and that government resources would have a greater long-term impact if directed towards production.
Agriculture became a major part of that strategy.
The government introduced subsidised fertiliser and other farm inputs, with the price of a 50-kilogramme bag of fertiliser falling from roughly KSh7,000–7,500 to about KSh2,500 under the programme.
The objective was straightforward: reduce the cost of farming, increase production and eventually reduce Kenya’s dependence on imported food.
That strategy represented a major shift from trying to make food cheaper through consumer subsidies to trying to make food cheaper by increasing domestic production.
The shilling begins to recover
The Kenyan shilling became one of the clearest symbols of the economic crisis.
The currency fell to historic lows against the dollar, at one point moving beyond KSh160 to the US dollar, increasing the cost of imported fuel, machinery, medicine and other essential goods.
A weaker shilling also made it more expensive for the government and private companies to service dollar-denominated debt.
The subsequent recovery has therefore been politically significant.
The shilling has since stabilised around the KSh129–130 per dollar range, although exchange rates continue to fluctuate and the currency remains vulnerable to global oil prices, international interest rates and domestic dollar demand.
At the same time, Kenya rebuilt its foreign-exchange reserves.
Recent data put reserves above US$12 billion, a substantial improvement from the much weaker position the country faced during the early years of the administration.
The stronger reserve position gives the country a larger cushion to pay for imports and manage external shocks.
From a cost-of-living crisis to slower price increases
For ordinary Kenyans, however, the most important question is not the size of foreign-exchange reserves or the performance of the shilling.
It is the price of food, transport, rent and other household necessities.
This is where the government’s economic record becomes more complicated.
A fall in inflation does not mean that prices have returned to their 2022 levels.
Inflation measures the rate at which prices increase. When inflation falls from 9.6 per cent to around 4 per cent, prices are still rising — only more slowly.
This distinction is important for understanding why many households may not feel the full benefit of the macroeconomic recovery.
The government can point to lower inflation, a stronger currency, cheaper fertiliser and improved reserves. But families still face higher cumulative prices than they did several years ago.
The economic turnaround therefore exists alongside a continuing cost-of-living challenge.
The price of stabilisation
The Ruto administration’s strategy has also come with significant political and social costs.
To reduce the fiscal deficit and increase government revenue, the administration introduced and expanded several taxes and levies.
Among the most controversial was the Housing Levy, while changes to taxation and fuel pricing generated widespread public opposition.
The government’s fiscal measures contributed to the protests that erupted in 2024, demonstrating the difficult political trade-off behind the economic strategy.
The administration’s argument has been that Kenya could not continue borrowing and spending at the same pace without eventually putting the entire economy at greater risk.
Critics, however, have argued that the burden of fiscal consolidation has fallen too heavily on ordinary citizens and businesses.
The debate is unlikely to disappear soon.
A stronger economy, but a larger debt mountain
Perhaps the biggest contradiction in Kenya’s economic story is debt.
The country avoided the immediate danger of sovereign default, but its total public debt has continued to climb.
From roughly KSh8.7 trillion when the Ruto administration took office, public debt reached KSh12.84 trillion by February 2026 and KSh12.856 trillion by April 2026.
The April figure represented 69.4 per cent of GDP.
The increase reflects, among other things, continued government borrowing to finance budget deficits and manage debt obligations.
It means that while the administration can credibly point to improved liquidity and the avoidance of an immediate default, Kenya has not yet solved its underlying debt sustainability problem.
The World Bank has similarly warned that public debt will decline only gradually, while fiscal pressures remain significant.
Did Ruto save Kenya’s economy?
The answer depends partly on what is meant by “saved.”
If the question is whether Kenya avoided an immediate sovereign default and achieved a substantial improvement in several key macroeconomic indicators, the evidence points to a clear stabilisation.
Inflation has fallen sharply from its 2022 peak. The shilling has stabilised. Foreign-exchange reserves have recovered. Kenya met its US$2 billion Eurobond obligation, and the economy has continued to grow.
Treasury data shows that Kenya’s economy grew by 4.6 per cent in 2025, compared with 4.7 per cent in 2024.
But if “saved” means that Kenya’s economic problems have been permanently solved, the evidence does not support that conclusion.
Public debt remains extremely high. The fiscal deficit remains substantial, and millions of households continue to feel pressure from the accumulated rise in the cost of living.
What Ruto’s administration can claim is something narrower but still significant: it helped pull Kenya away from an immediate financial precipice and restore a measure of macroeconomic stability.
The next challenge is turning that stability into an improvement that ordinary Kenyans can feel in their pockets.
That will require more than a stronger shilling or higher reserves.
It will require sustained economic growth, lower debt costs, more jobs, affordable food and greater household purchasing power.
For now, the numbers tell a story of an economy that has moved away from the edge — but has not yet reached solid ground.
