The analysis by IMF shows Kenya’s debt is sustainable, although the risk of distress “has moved from low to moderate” in exceptional circumstances, Bloomberg quotes CS Rotich from the capital, Nairobi. “But this is based on extreme shocks, like if growth falls to almost zero, if the country faces high interest rates or a sharp depreciation of the currency.”
“These are the conditions under which the debt can move to moderate risk,” he said. “But Kenya is not a high-risk country.”
Over the past six years, Kenya’s debt has more than doubled to 5.15 trillion Shillings ($50.2 billion), drawing the attention of experts.
Rotich attributed the rise in debt to infrastructure projects by the government. To address that, he said the government was addressing the issue, and was targeting a fiscal deficit of 3 percent by 2022. The deficit peaked at 8.9 percent in the 2016-17 financial year.
”We have continuously implemented fiscal consolidation and plan to access private sector resources through public private partnerships to fund infrastructure development going forward,” he said.