Kenya has surpassed Nigeria to become the third-largest recipient of funding from the African Development Bank (AfDB), highlighting the growing importance of multilateral lenders as the East African nation works to finance its budget and manage rising debt obligations.

Fresh data from the Abidjan-based lender show that Kenya received KSh43.7 billion ($338 million) in AfDB disbursements in 2025, up from KSh33 billion ($255 million) a year earlier. The increase lifted Kenya above Nigeria, which received KSh41.9 billion ($323.6 million) during the same period as Africa’s most populous economy scaled back its use of AfDB funding while pursuing economic reforms under President Bola Ahmed Tinubu.

Kenya expands multilateral borrowing

The shift marks an important change in Africa’s borrowing patterns. While Nigeria remains one of the continent’s largest economies and a major recipient of development financing, Kenya has increasingly turned to multilateral lenders as access to global debt markets becomes more expensive and investor appetite for emerging-market debt remains uneven.

For Nairobi, the increase in AfDB funding reflects a broader effort to secure financing on more favorable terms. Loans from multilateral institutions typically carry lower interest rates and longer repayment periods than commercial borrowing, offering governments greater flexibility at a time when debt-servicing costs are consuming a larger share of public revenue.

That challenge remains particularly visible in Kenya. The present value of the country’s public debt-to-GDP ratio is estimated at 65.6 percent, well above the 55 percent threshold often cited by international financial institutions. With pressure mounting to contain borrowing costs while maintaining public spending, policymakers have leaned on institutions such as the AfDB instead of relying heavily on Eurobond issuances and other commercial sources of financing.

Concessional finance drives infrastructure spending

The latest figures also reflect the limited financing options facing many African governments. As debt repayments absorb a growing share of national budgets, concessional lenders have become an increasingly important source of funding for infrastructure and development projects that might otherwise be delayed.

In Kenya’s case, much of the AfDB’s support has been directed toward long-term investments in energy, transportation, water and sanitation infrastructure. These projects are intended to improve connectivity, strengthen trade links and support economic activity across East Africa. Several initiatives have focused on transport corridors connecting the Port of Mombasa with neighboring landlocked countries, reinforcing Kenya’s role as a regional commercial gateway.

Nigeria ranks third in World Bank’s IDA lending

Kenya’s rise in the AfDB rankings comes as attention turns to borrowing from other multilateral institutions. New figures from the International Development Association (IDA), the World Bank’s concessional lending arm, show that Nigeria continues to hold a leading position among the institution’s largest borrowers despite a modest reduction in its outstanding exposure.

According to IDA’s financial statements for the quarter ended March 31, 2026, Nigeria’s exposure stood at $18.5 billion, down slightly from $18.7 billion at the end of December 2025. The decline of $200 million represented a 1.1 percent reduction over three months.

Globally, Bangladesh remained the largest IDA borrower with outstanding exposure of $22.7 billion, followed by Pakistan at $19.2 billion. Nigeria ranked third with $18.5 billion. Among African economies, Ethiopia recorded an exposure of $14.4 billion, Tanzania followed with $14.3 billion, while Kenya stood at $13.2 billion.