Kenya’s import cover has reached 5.1 months, its highest level in nearly six years, following a sharp rise in foreign exchange reserves, which now exceed KES 1.57 trillion. This development strengthens the country’s ability to withstand external economic shocks and finance critical imports.
According to the Central Bank of Kenya (CBK), the last time Kenya maintained an import cover above five months was in June 2019. This is a significant turnaround from early 2023 when the cover had declined to just over three months, raising concerns about the availability of essential imports such as fuel.
CBK Governor Kamau Thugge attributed the improvement to increased foreign remittances, a better export performance, and adjustments in oil import financing arrangements. “Maintaining an import cover above five months is a crucial step in strengthening our external position and ensuring stability in trade and financial markets,” he stated.
One of the main factors supporting forex reserves growth has been the government’s extended oil import credit deal with Gulf suppliers. This arrangement has helped reduce immediate forex outflows by allowing Kenya to spread petroleum import payments over an extended period. Kenya recently renewed the deal with three Gulf oil majors after Uganda withdrew from the agreement.
Additionally, the tourism sector has played a key role in stabilizing reserves. The sector’s earnings are projected to reach KES 650 billion ($5 billion) in 2025, up from KES 452 billion in 2024. The increase in tourism revenues has provided a steady flow of foreign exchange, further reinforcing the country’s external position.
With Kenya now exceeding the East African Community (EAC) and International Monetary Fund (IMF) minimum import cover benchmarks, attention is shifting to whether this trend can be sustained. Analysts note that while the current position is a positive development, external debt repayments and changing global financial conditions could impact forex reserves in the future.
Governor Thugge emphasized the importance of maintaining this momentum, stating, “The increase in forex reserves enhances Kenya’s resilience against global commodity price fluctuations and external debt obligations.”
