IMF African Department Director Zeine Zeidane warned that higher global interest rates could increase the cost of external borrowing for African governments, after reporting that the continent attracted US$12 billion (KSh1.55 trillion) from international markets between January and September 2026.
Zeidane noted that US Treasury yields have risen by more than 100 basis points this year, a shift that drives up borrowing costs.
He added that the cost of borrowing has not declined and that each country will need to assess whether mobilising financing makes sense compared with other nations.
Because Treasury yields influence the rates investors demand on sovereign bonds, further increases could push up interest rates on African issuances.
For Kenya, the trend may translate into higher payments to refinance maturing foreign debt or to obtain new loans.
Greater interest obligations would tighten the national budget and could reduce resources available for development projects and public services.
The Kenyan government has been attempting to curb debt pressures through stronger revenue collection, tighter spending and measures to manage existing loans.
The IMF’s caution arrives as African states continue to pursue funding from overseas investors, but the higher-cost environment could raise debt-service burdens.
