Kenya lost an estimated Sh19.5 billion after Moody’s cut its credit rating deeper into junk in July 2024, following the Gen Z protests that forced the government to abandon the Finance Bill, according to the African Peer Review Mechanism (APRM), an African Union body.
The APRM has called the downgrade unfair, arguing that it rested on incomplete information and insufficient context and that it raised Kenya’s external borrowing costs.
Secondary reporting of the APRM’s assessment puts the loss at about $150 million, linked to a weaker shilling and higher Eurobond yields.
The downgrade
On 8 July 2024, Moody’s lowered Kenya’s long-term foreign-currency rating by one notch, from B3 to Caa1, and kept a negative outlook. Caa1 signals very high credit risk.
The agency said the government’s capacity to deliver revenue-based fiscal consolidation had been significantly reduced after deadly protests led President William Ruto to withdraw the Finance Bill 2024.
The bill had been expected to raise roughly $2.7 billion. Moody’s said it did not expect significant new revenue measures in the near term, given heightened social tensions, and that debt affordability would remain weaker for longer.
Kenya’s dollar bonds weakened after the announcement.
Gen Z protests and the Finance Bill withdrawal
The protests, largely led by young Kenyans, began in June 2024 over proposed taxes on basic goods and other measures amid a cost-of-living crisis.
They turned violent; the Kenya National Commission on Human Rights and other reports put the death toll in the dozens. Ruto withdrew the bill on 26 June and later announced spending cuts and additional borrowing to fill the gap.
Fitch and S&P also downgraded Kenya later that year, citing the same reversal of tax measures, a weaker fiscal path, and socio-political risk.
Fitch cut the rating to B- in early August with a stable outlook; S&P followed to B- later that month.
Why the APRM says the move was unfair
The APRM, which the African Union has mandated to support member states on credit ratings, has repeatedly criticised Moody’s handling of Kenya.
In an October 2025 policy brief on Moody’s commentaries and rating actions between 2023 and 2025, the mechanism said the July 2024 downgrade was premature because key fiscal data had not yet been published. It contrasted that with S&P, which waited for mid-term figures.
The brief described the downgrade as widely perceived to be driven by political and social risk rather than by a full reading of fiscal fundamentals, and said it weakened investor sentiment and triggered temporary sell-offs.
The APRM has also faulted earlier Moody’s commentary—in particular an August 2023 remark treating a planned voluntary Eurobond buyback as a distressed exchange—for moving markets before official terms existed.
The estimated Sh19.5 billion cost
Reporting this week in the Business Daily, drawing on the APRM, attributes an estimated Sh19.5 billion cost to the post-protest rating action.
The mechanism links the figure to higher financing costs and currency depreciation: the shilling moving from about Sh124 to Sh128 against the dollar, and Eurobond yields rising from roughly 7.2 percent to 9.1 percent.
It argues that the commentary and the downgrade eroded confidence, complicated debt-management plans, and left Kenya paying more to borrow.
Moody’s and other major agencies have rejected claims of systemic bias, saying they apply the same methodologies worldwide.
What followed
Moody’s revised outlook and Kenya’s market access
In January 2025 Moody’s revised Kenya’s outlook from negative to positive while affirming the Caa1 rating, citing easier liquidity risks and improving debt affordability.
The APRM noted that a jump from negative to positive, skipping stable, is unusual, and said the government had already borne the cost of the earlier stance. Eurobond yields eased after the outlook change.
Kenya later regained market access. In 2025 it carried out Eurobond issuance and buyback operations that pushed out maturities, while foreign reserves strengthened.
S&P subsequently upgraded the sovereign. Spreads, however, remained elevated relative to some peers—an outcome the APRM treats as a lasting effect of the earlier disruption.
The push for an Africa Credit Rating Agency
The Kenyan episode is now cited in the wider push for the Africa Credit Rating Agency (AfCRA), an AU-backed body meant to supply assessments that incorporate more local context.
Kenya has also moved to strengthen its own engagement with raters, including plans for a domestic credit-rating committee.
The core dispute is not whether the protests and the abandoned tax bill mattered—they plainly did, and three major agencies marked the sovereign down—but whether the timing and framing of Moody’s action fairly reflected the data available, and how much extra the country paid as a result.
On the APRM’s accounting, that premium was about Sh19.5 billion.