African Union Condemns Speculative Credit Ratings Following Moody’s Sudden Upgrade of Kenya

Big Three credit rating agencies. Image from public domain
The African Union’s African Peer Review Mechanism (APRM) has expressed concern regarding recent credit rating actions by Moody’s Ratings on the Government of Kenya, particularly in light of inaccuracies and premature decisions.
On January 24, 2025, Moody’s unexpectedly upgraded Kenya’s outlook from “negative” to “positive” while reaffirming its Caa1 rating. The move, which highlights expectations of easing liquidity risks and improving debt affordability over time, has raised eyebrows due to its unusual nature. Typically, such transitions progress through an intermediate “stable” outlook. Analysts within the APRM suggest this sudden shift is effectively an acknowledgment that the initial “negative” outlook may have been unwarranted.
The change reverses a controversial decision made on July 8, 2024, when Moody’s downgraded Kenya’s credit rating, citing social unrest surrounding protests against the proposed Finance Bill. The downgrade, based on speculation rather than comprehensive data, sparked criticism from Kenyan authorities and regional institutions alike. At the time of the downgrade, critical midterm review data—including details on Kenya’s Appropriation Bill, spending allocations, final budget, and Finance Bill—had not yet been made public.
The APRM asserts that Moody’s July 2024 rating was speculative and failed to account for the evolving fiscal measures and governance initiatives undertaken by Kenya’s government. The protests cited by Moody’s as a driver of the downgrade were widely viewed as a temporary political challenge, rather than a fundamental indicator of Kenya’s long-term fiscal health.
“This is not the first time Moody’s has acted prematurely and erred in its analysis,” the APRM stated. “Rating agencies have a responsibility to ensure their assessments are based on accurate, comprehensive, and up-to-date data. Premature actions undermine their credibility and have real consequences for the countries they assess.”