Moody’s maintains negative outlook for Kenya
Rating agency Moody's has maintained a negative outlook for Kenya in a recent report. CNBC Africa spoke to Moody's Vice President and Senior Analyst, David Rogovic, for more.
Thu, 21 Jan 2021 15:28:27 GMT
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AI Generated Summary
- Kenya's deteriorating fiscal position and rising debt burden have been major concerns, with fiscal consolidation prospects delayed due to the pandemic.
- Increased liquidity pressure on Kenya is expected as the country grapples with a large fiscal deficit and the need to roll over maturing debt.
- The government's ability to broaden revenue generation capacity and control spending will be crucial in stabilizing and eventually reversing the rise in debt.
Rating agency Moody's has maintained a negative outlook for Kenya in a recent report, citing concerns about the country's fiscal position and rising debt burden. In an interview with CNBC Africa, Moody's Vice President and Senior Analyst, David Rogovic, highlighted the key factors driving the negative outlook. Rogovic pointed to the deterioration in Kenya's fiscal position, including a rising debt burden and deteriorating interest affordability over several years. The impact of the COVID-19 pandemic has further exacerbated these challenges, with fiscal consolidation prospects delayed until after the economy begins to recover. Additionally, Rogovic mentioned the increased liquidity pressure on Kenya due to the need to borrow to cover the fiscal deficit and roll over maturing debt, which amounts to close to 20 percent of GDP each year. These factors, combined with global financial conditions, informed Moody's decision to maintain the negative outlook for Kenya.
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