NAIROBI: Kenya’s inability to fund its rapidly increasing current account with sustainable revenue and the political uncertainty could easily prompt a downgrade of the country’s ratings internationally, analysts said.
This follows Fitch’s affirmation of the country’s long-term foreign and local currency issuer ratings at B+ and BB- is premised on a consistent loosening of its public finances over the last decade.
“Though stable, the agency’s outlook is threatened by growing public debt ratios and the risks associated with increased reliance on commercial debt, high carry costs if shovel-ready projects are unavailable, as well as repayment risk posed by large issue sizes, ” Rand Merchant Bank said on Monday.
“Kenya’s inability to fund its burgeoning current account with sustainable inflows and the prospect of a tenuous political environment could easily trigger a ratings downgrade.
RMB said an upward adjustment to Kenya’s ratings band would be forthcoming if the state enacts measures to strengthen Kenya’s business environment, consolidate its finances and improve its record of economic management.
SOURCE: CAJ NEWS AGENCY