Nairobi, Kenya – Global credit ratings agency Fitch has downgraded Kenya’s sovereign rating, citing heightened risks to the country’s public finances. The decision comes after the government was forced to backtrack on a key revenue-raising plan following widespread protests.
Kenya’s government had proposed new tax measures to meet the International Monetary Fund’s (IMF) fiscal consolidation targets. However, public outcry led to the withdrawal of the plan. Fitch warns that the risk of further social unrest remains, complicating efforts to stabilize the economy.
The downgrade is a significant setback for Kenya, which has been grappling with a heavy debt burden. The country faces challenges in securing external financing due to high borrowing costs and dwindling foreign exchange reserves.
While Fitch maintained a stable outlook, acknowledging support from official creditors, the downgrade underscores the country’s economic vulnerabilities. Kenya now faces the daunting task of balancing fiscal discipline with social stability, as it seeks to navigate its financial challenges.
Moody’s had previously downgraded Kenya’s credit rating to junk status, while S&P is set to review its assessment later this month.
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