The development came after President William Ruto’s meeting with Ben Black, the Chief Executive Officer of the U.S. International Development Finance Corporation (DFC), during his visit to Washington, D.C.
The announcement triggered wide interest among global agencies, with several outlets later publishing stories that mirrored early details shared in our initial report.
Under the new arrangement, the DFC will buy part of Kenya’s expensive commercial loans.
This means Kenya will no longer pay the high interest tied to those loans. Instead, the country will repay the DFC under softer, lower-interest terms.
The money saved from reduced interest payments is expected to support key food-related programmes across the country.
The government plans to channel these funds into:
Building agricultural infrastructure
Expanding climate-smart farming
Improving nutrition programmes
Supporting national hunger-reduction strategies
The idea is simple: reducing debt pressure while improving food production so the country becomes more resilient to drought, climate shocks, and global price fluctuations.
President Ruto described the agreement as a “smart and sustainable strategy” that supports Kenya’s economic recovery plan.
He thanked the DFC for agreeing to move forward with the swap, noting that replacing costly debt with affordable financing would improve Kenya’s fiscal stability.
Ruto also emphasized that the partnership fits perfectly with the country’s focus on inclusive development and long-term growth.
The U.S. agency, which supports development in low- and middle-income nations by mobilizing private investment, is expected to play a bigger role in Kenya going forward.
Besides the debt swap, the DFC signaled interest in backing Kenya’s proposed National Infrastructure Fund.
This support may include financing upgrades to major roads, ports, and the Jomo Kenyatta International Airport.
In a significant shift, the DFC will also station a permanent representative in Nairobi from January 2026.
This move aims to improve coordination, accelerate projects, and increase U.S. private sector investment in Kenya and the wider region.
Kenya has been dealing with rising debt repayments, unpredictable weather, and increasing food insecurity.
The debt-for-development model offers the country extra breathing space by easing immediate financial pressure while channeling funds into areas that directly affect citizens.
For years, farmers have struggled with poor infrastructure, erratic rainfall, and high production costs.
Officials believe that redirecting interest savings toward agriculture will help stabilize food supply, reduce hunger cycles, and support climate-friendly farming methods.
During his Washington visit, President Ruto also held a separate meeting with IMF Managing Director Kristalina Georgieva.
Their discussion focused on supporting Kenya’s economic reforms and maintaining growth momentum.
There are mixed views within government circles about Kenya’s next steps with the IMF.
While the National Treasury is open to a funded programme, the Council of Economic Advisors appears more inclined toward using commercial markets to raise money.
These internal debates continue as the country looks for the best way to balance economic stability with growth.
The U.S.-Kenya deal is expected to strengthen bilateral ties and provide a model for other African nations facing similar challenges.
With guaranteed U.S. support, reduced interest burdens, and increased investment prospects, Kenya now has an opportunity to push forward with ambitious reforms while securing food for its growing population.
