NAIROBI, Kenya, Oct 21 – The International Monetary Fund (IMF) has warned that African governments could pay more to borrow from international markets as global interest rates rise.

IMF African Department Director Zeine Zeidane said African countries raised US$12 billion (Sh1.55 trillion) from international markets between January and September 2026, showing that investors are still willing to lend to the region.

However, he said rising interest rates, particularly in the United States, could make new loans more expensive for African governments.

“What we see are the benchmarks themselves increasing, and if you look at US Treasury yields, they have risen by more than 100 basis points this year,” Zeidane said.

“The cost of borrowing has not really declined, and so it will be a case-by-case assessment to see whether it makes sense to mobilise financing compared to other countries,” he added.

US Treasury yields help determine how much governments in other countries pay to borrow internationally. When these yields rise, investors may demand higher interest rates on African bonds, increasing the cost of raising money.

For Kenya, this could mean paying more to refinance maturing foreign debt or raise new loans from international markets.

Higher interest payments would also put more pressure on the national budget, leaving the government with less money for development projects and public services.

Kenya has been trying to manage its debt through higher revenue collection, spending controls and measures to manage existing loans.

The IMF’s warning comes as African governments continue to seek funding from international investors. While countries can still raise money, rising interest rates mean they may have to pay more for it, increasing the cost of servicing their debt.