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Moody’s to release Kenya credit rating

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Guests follow proceedings during a briefing by Moody’s Investor services at a Nairobi hotel in July. PHOTO | SALATON NJAU

Moody's Investors Service has completed the periodic review of its Kenya credit rating and is expected to release its report any time.

However, the global rating agency said that it could not guarantee the timing of giving a new credit rating.

“Moody's has now completed the periodic review of a group of issuers that includes Kenya and may include related ratings. The review did not involve a rating committee, and this publication does not announce a credit rating action and is not an indication of whether or not a credit rating action is likely in the near future,” it said in a statement.

The agency, however reiterated that Kenya still held an issuer rating of B2 that is supported by its "moderate" economic strength, which reflects the relative diversification of the economy and high growth rates, despite low wealth levels.

Kenya is currently globally classified as a low middle-income country, but nearly 40 percent of its population live below the poverty line.

About 20 percent suffer food scarcity, meaning that a household’s total income cannot buy them enough food. However, the economic growth rate has averaged above five percent in the past decade or so, though significantly below the Vision 2030 target of 10 percent.

The rating is also an indication of "low" institutional strength reflecting weak policy effectiveness and credibility, weak rule of law and elevated corruption, only partially mitigated by particularly strong statistical transparency.

“[It] has "Very Low" fiscal strength highlighting the rapid increase in the government's debt burden and poor revenue collection performance and "Moderate" susceptibility to event risk predominantly stemming from government liquidity risk, due to elevated financing needs,” Moody’s said.