Kenyan President promises to prevent default
2023.01.05 07:26
Kenyan President promises to prevent default
Budrigannews.com – President William Ruto declared on Wednesday that Kenya will not default on its debt and will increase tax collection in the next two years.
In order to lessen the burden on debt service, the government of Ruto, which took office in September, has pledged to reduce costly commercial borrowing in favor of less expensive sources like the World Bank.
Rating agencies issued cautions after the East African nation’s public debt skyrocketed during Ruto’s predecessor Uhuru Kenyatta’s infrastructure building campaign.
“Our nation will not fall behind. I would like to reassure you. Our nation will not fail to meet its obligations. In a lengthy interview with Kenyan media, Ruto stated, “We have applied the brakes on any more borrowing.”
He went on to say that the government wanted to collect an additional 1 trillion shillings, or $8.11 billion, in taxes over the next 24 months and that it would cut borrowing by 300 billion shillings during the current fiscal year, which ends in June.
In 2022, a rise in yields made it nearly impossible for Kenya, like other frontier economies, to raise funds from international bond markets.
It was forced to cancel the planned Eurobond issuance in June and is looking for other funding options.
Fitch stated in February of last year that the risk of credit rating downgrades in as many as ten African nations was increasing, with Kenya, Ghana, Lesotho, Namibia, Rwanda, and Uganda facing the greatest threat.
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