President William Ruto’s economic strategies are beginning to bear fruit, bringing stability to Kenya’s economy. Under his administration, the debt-to-GDP ratio has declined to 67%, a drop from a worrisome 73% seen earlier. As a result, Kenyans are experiencing some relief in the cost of living.

Inflation, once at a high of 9.6% in 2022, has significantly decreased, reaching 3.6% in September 2024. The National Treasury attributes this progress to several decisive actions taken by the government. These include the repurchase of a $2 billion Eurobond, effective monetary policies, and a Government-to-Government oil procurement strategy. By sourcing oil through this arrangement, local marketers can receive oil on credit and sell it in Kenyan shillings, significantly reducing the country’s demand for U.S. dollars.

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This strategic shift has been instrumental in strengthening the shilling, which now trades at around 128.70 against the dollar, an improvement from its historic low of 160 in February. National Treasury Cabinet Secretary John Mbadi credited this stability to targeted government policies, emphasizing that a strong shilling reduces external debt burdens. According to the Treasury, each unit gain in the shilling against the dollar cuts down Kenya’s external debt by Ksh 40 billion.

Lower inflation has eased costs on essentials like food, fuel, and electricity, offering Kenyans a reprieve amid global economic challenges. The Central Bank of Kenya also played a critical role by raising interest rates last December, which has helped curb inflation over time.

Looking forward, Treasury Principal Secretary Chris Kiptoo has outlined plans for ongoing fiscal stability. These include consolidating the budget, enhancing public-private partnerships, and developing consistent tax policies to stabilize the debt-to-GDP ratio at around 55% by 2028.

However, Kenya still faces economic hurdles. International rating agencies recently lowered Kenya’s credit outlook, raising concerns over liquidity risks. To address this, the International Monetary Fund (IMF) has urged Kenya to focus on a more transparent and equitable tax system. The government has promised reforms to foster economic growth and sustainable debt levels, aiming for stability by the end of Ruto’s first term.