American credit rating agency Moody’s has given Kenya a negative credit rating, due to its expensive loans.
Kenya is still in the B2 credit rating, but has dropped from stable to negative, with the agency citing rising financing risks posed by Kenya’s large gross borrowing requirements.
These include amortization of external bilateral debt and the need to refinance a large stock of short-term domestic debt, at a time when the fiscal outlook is deteriorating due to the erosion of the revenue base. The agency also said that Kenya’s debt structure exposes its fiscal metrics to exchange rate and interest rate shocks.
“The negative outlook reflects the rising risks posed by Kenya’s large gross borrowing requirements,” said Moody’s in a statement.
Read: Chinese Company Working in Kenya Blacklisted by AfDB Over Fraud
Kenya now risks dropping to B3 credit issuer, which could bar it from getting external loans. The current credit rating is classified as speculative with high chances of default.
“While Kenya does not face acute financing pressures, the severe tightening of financial conditions will challenge the Government’s ability to meet larger gross financing needs without an increase in borrowing costs that would threaten medium-term fiscal consolidation efforts,” added Moody’s.
Standard & Poor’s credit rating for Kenya stands at B+ with stable outlook. Fitch’s credit rating for Kenya was last reported at B+ with stable outlook.
Kenya’s public debt currently is estimated to be over Ksh6 trillion.
Email your news TIPS to Editor@kahawatungu.com or WhatsApp +254707482874. You can also find us on Telegram through www.t.me/kahawatungu
Email your news TIPS to Editor@Kahawatungu.com — this is our only official communication channel
