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Kenya Debt to Rise to 60% of GDP

Kenya’s debt is currently at $38.7b.Kenya’s debt is currently at $38.7b.

Kenya’s rising debt is set to hit 60% of gross domestic product by June 2018 according to Global rating agency Moody’s Investors Service. In their latest report, the agency says Kenya’s debt to GDP has gone up to 56.4% from 40.5% in 2012.

Moody’s attributes the projected rise to high primary deficits and borrowing costs, AllAfrica reported.

Kenya’s debt is currently at Sh4 trillion ($38.7 billion), 13 percentage points above IMF’s recommended benchmark for emerging countries.

According to the treasury, nearly half of the external debt is concessional compared to the costly commercial loans, with the other half held in domestic debts through treasury bonds and bills.

A $750 million (Sh7.6 billion) syndicated loan borrowed in 2015 is due for repayment this year, while the $2 billion euro bond will mature in 2024, further exerting pressure on the government to set provisions for the payments.

The IMF, in its review of Kenya a year ago, said Kenya’s risk of external debt distress remains low but notes there is need for reduction in the deficit over the medium term.

The World Economic Forum ranks Kenya at number 77 out of 138 countries using the GDP/debt ratio score.

Japan is the most indebted country with a score of 248.1% of GDP, followed by Greece (178.4%), Lebanon (139.1%). The United States, ranked at 128, has a debt to GDP ratio of 105.8%, but with the highest total debt of $17.9 trillion.

Hong Kong, Brunei and Saudi Arabia are the least indebted countries at 0.1, 3.1 and 5.8% respectively. Algeria is fourth globally at 8.7%, while Nigeria is seventh at 11.5% of the GDP.

 

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