Kenya Signs Yen Loan Deal with Japan, Expects Economic Growth Surge

Kenya has signed a yen-denominated loan agreement with Japan, backed by Nippon Export and Investment Insurance (NEXI), during the TICAD 9 summit in Tokyo, marking a continuation of their long-standing development partnership. The loan is expected to support infrastructure, manufacturing, and industrial skills development, while lowering borrowing costs through risk mitigation by NEXI. President William Ruto announced that Kenya's economy is projected to grow by 5.6% in 2025, surpassing previous forecasts despite global trade challenges such as escalating US tariffs. Concurrently, Kenya is negotiating with China to convert part of its dollar-denominated loans related to the $5 billion railway project into yuan and extend repayment periods, aiming to reduce debt servicing costs and ease fiscal pressures. This debt reprofiling strategy reflects Kenya’s broader effort to stabilize public finances amid high debt levels and underperforming revenue collection. Japan remains a key development partner, having provided over $5 billion in assistance over six decades, with Kenya seeking diversified funding sources to sustain its economic growth and infrastructure projects.