S&P indicated that Kenya is unlikely to meet its fiscal deficit target of 3.3% of GDP due to pressures to repeal the Finance Bill. With revenue shortfalls expected to be covered by increased domestic financing, this will lead to a gradual decline in local yields and persistently high-interest costs, which accounted for about 30% of government revenue in 2024. Additionally, Kenyan banks’ exposure to government debt remains high, limiting private-sector lending.