Kenya says last week’s credit ratings downgrade by Moody’s is not as dire as painted by the ratings agency.
Treasury Principal Secretary, Dr Chris Kiptoo, says Kenya is due to receive about Sh578.0 billion worth of external financing before close of June 30, and there is no need to worry about the liquidity challenges that are being faced.
“About the ratings agency, things are not badly off. We expect this week to receive $3.0 billion (Sh411.0 billion), which is within our external borrowing plan for the current financial year. Within the next two and a half weeks, we expect another $1.0 billion (Sh137.0 billion) from the World Bank,” Kiptoo told the National Assembly Departmental Committee on Finance and Planning.
“Our plan is that immediately we receive this money, we pay ministries, counties, and Constituency Development Fund and this will improve our liquidity.”
Kiptoo’s statements came just days after Moody’s rating agency downgraded Kenya’s profile from B2 to B3, essentially reclassifying the economy from ‘high credit risk’ to ‘very high credit risk’.
The Moody’s action was Kenya’s third downgrade in six months coming after downgrades by S&P and Fitch in February 2023 and December 2022, respectively.
“The rating downgrade is driven by an increase in government liquidity risks. Domestic funding conditions have deteriorated considerably over the last two months, with very low net domestic issuance contributing to financing shortfalls and delays in government spending,” Moody’s said.
