Header Ads

#IMF : "Invest and Lend to Kenya at your own risk." Kenya downgraded globally over debts. - Moody global credit rating firm.

Central Bank of Kenya. PHOTO | FILE

According to a Global credit rating firm, Moody's has placed Kenya's B1 long-term issuer rating on review for downgrade to B2, exposing the country's high credit risk profile. The credit firm gave a warning to other western and Asian states and countries that Kenya inflation and GDP are not proportional.


Moody credit firm joins IMF over the credit reference to Kenya as the debts raised from 2 Trillion in 2013 to 5 Trillion in 2017.  IMF warned investors and countries to invest and lend in Kenya respectively at their own risk.


According to Moody's, the decision to place the rating on review for downgrade was prompted by a mixture of negative microeconomics currently affecting the country including high debt burden, government's liquidity pressure, tense political situation and uncertainties over the future direction of its economic and fiscal policy.


The rating agency expects that Kenya's debt burden, which has risen to 56.4 percent of GDP in June 2017, up from 40.5 percent five years ago, will continue to rise due to persistently high primary deficits and borrowing costs.


It is forecasting a further upward trajectory in government debt which will see debt-to-GDP surpass the 60 percent mark by June 2018 unless a decisive policy response is introduced.


Indeed, figures from the Central Bank of Kenya shows that Kenya's public debt moved from Sh3.82 trillion in December 2016 to Sh4.4 trillion in August this year, meaning the state is borrowing Sh86 billion a month on average.


Latest Treasury data from the 2017 budget outlook and review paper shows that the country spent Sh271.3 billion in interest payments, of which Sh212.9 billion went towards domestic debt interest and Sh58.4 billion in external debt interest payments.


UN also cautioned the Western and Asia countries over the Kenya borrowing rate and the appetite for Money. UN also warned that the countries' corruption rate is also at an alarming rate. That means the ability of the country to pay its debt will be exhausted in some instances.


The US president Donald Trump revoked all the agreements that were made between the former US President Barack Obama with African countries citing that they need to root out corruption before the agreements reinstated.

FEATURED NEWS

Powered by Blogger.