Kenya is preparing to raise $1 billion through a debt-for-food swap, a move the government says is designed to ease fiscal pressures while supporting agricultural imports.
A confidential Finance Ministry document seen by Reuters outlines the plan, which would allow the country to restructure a portion of its debt obligations by tying repayments to food supplies. The strategy is aimed at bolstering food security while freeing up cash for other pressing budgetary needs.
Government insiders told Bloomberg that the proposal reflects growing pressure on Nairobi to balance rising debt costs with public demand for subsidies and essential commodities. Kenya’s external debt has risen sharply in recent years, with repayments now taking up a large share of state revenues.
Analysts cited by Financial Times said the initiative could improve liquidity in the short term but warned that long-term sustainability depends on execution and creditor buy-in. They added that a debt-for-food arrangement could set a precedent for other African economies facing similar fiscal challenges.
Kenya’s Treasury is expected to begin talks with international creditors in the coming months, as officials push to have the arrangement in place before the end of the 2025 fiscal year.
