Moody’s has downgraded Kenya due to the Finance Bill 2024 withdrawal. Moody credit rating downgrade Kenya and will nolonger be able to acquire huge loans as before.
Moody’s has downgraded Kenya’s (local and foreign currency issuer ratings) to Caa1 from B3; the outlook is negative.
The ratings agency bases the downgrade on a “significantly diminished capacity to implement revenue-based fiscal consolidation that would improve debt affordability.”
The ratings agency doesn’t expect the government to be able to introduce significant revenue-raising measures in the foreseeable future.
Moody’s projects that the interest payments-to-revenue ratio will rise to 33.0% in FY2025 from 30.0% in FY2024.
The negative outlook reflects downside risks related to government liquidity.
Are S&P and Fitch downgrades imminent? Remember, the country downgraded the 2023–24 revenue target by a total of KES 250.0 billion.
The performance rate of 86.0%, based on the initial revenue target, indicates that some quarters do not view the outturn as a strong performance.
Kenya’s new credit rating puts the country in the same esteemed position as Argentina, Bolivia, Burkina Faso, Mozambique, and Suriname.
