In Landmark Deal, U.S. to Swap $1 Billion of Kenyan Debt for Food Investment

 In a significant move to address its debt burden and food insecurity, the Kenyan government has finalized a groundbreaking $1 billion debt-for-development agreement with the United States. The deal, confirmed during President William Ruto’s engagements in Washington, D.C., will channel funds saved from reduced debt repayments directly into agricultural and nutritional programs.

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The agreement was reached between President Ruto and Mr. Ben Black, Chief Executive Officer of the U.S. International Development Finance Corporation (DFC). Under its terms, the DFC will purchase a portion of Kenya’s higher-interest commercial debt, enabling the nation to repay it under new, more concessional terms. The resultant savings on interest payments will be exclusively directed toward strengthening Kenya’s food systems.

“This innovative arrangement provides a smart and sustainable pathway,” President Ruto stated. “We are grateful to the DFC for this $1 billion debt-for-food security swap, which allows us to refinance expensive existing debt with more affordable financing while directly supporting our people.”

The initiative targets critical areas including climate-resilient agricultural technology, modernization of farming infrastructure, and national nutrition initiatives. This model is designed to offer Kenya immediate fiscal relief while building long-term resilience against food shortages exacerbated by climate variability and global economic pressures.

The DFC, a federal agency that mobilizes private capital for strategic development, views this swap as a cornerstone for deepened bilateral cooperation. “We welcome the DFC’s commitment to expanding its engagement in Kenya,” Ruto added. “This partnership strongly aligns with our national development goals for inclusive and sustainable economic growth.”

Beyond the debt swap, discussions confirmed the DFC’s interest in supporting Kenya’s proposed National Infrastructure Fund, with potential investments in key transportation hubs such as the Jomo Kenyatta International Airport and major port and road networks. To streamline future collaboration, the DFC will station a representative in Nairobi beginning January 2026.

This financial breakthrough coincides with Kenya’s ongoing evaluation of its economic strategy. President Ruto separately met with International Monetary Fund Managing Director Kristalina Georgieva to discuss continued support for the country’s reform agenda. The talks occur as Kenyan officials weigh options between securing a new IMF-funded program and accessing commercial financial markets, reflecting a nuanced approach to economic management.

The debt-for-food swap is hailed by analysts as a strategic tool that addresses two pressing challenges simultaneously: managing public debt and securing sustainable food production for the nation’s future.

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