Fitch Ratings yesterday retained “B+” long-term foreign and local currency issuer default ratings (IDRs) for Kenya but with a negative outlook.
The global agency, which forecasts there will be no violence after the election, said the ratings reflect Kenya’s “solid growth record, strong medium-term growth potential and favourable business environment”.
However, it warned the ratings are constrained by Kenya’s low gross domestic product (GDP) per capita, sizeable current account and budget deficits and political risks.
Fitch’s issue ratings on Kenya’s senior unsecured foreign-currency bonds were also affirmed at ‘B+’.
The country ceiling has been affirmed at ‘BB-’ and the short-term foreign and local currency IDRs at ‘B’.
Fitch forecasts Kenya’s GDP growth to slow to 5.4 per cent in 2017, down from the 5.8 per cent in 2016.
“Slowing credit growth and uncertainty around the August elections are also weighing on the economy,” said Fitch.
“However, Fitch continues to assess Kenya’s medium-term growth potential as strong, sustained by improved security that has fuelled a recovery in tourism and high public spending that supports the construction sector.”
The agency said it envisages limited disruption linked to the August 8 polls but ruled out chaos.
“We do not foresee violence at the level of 2007. However, the Opposition’s frequent disputes with the Independent Electoral and Boundaries Commission raise the prospect that a NASA loss could lead to protests,” it said.