Investor demand and business activities are expected to increase as political stability returns in the country, a London-based global risk consulting firm has said.
Control Risks, a strategic consulting firm specialising in political, security and integrity risk, in its annual forecast RiskMap for East Africa has said Kenya is emerging from a protracted presidential election process and seeing a return to political stability.
“2018 is set to be a promising year for Kenya and the East Africa region. We have started to see the recovery of investor confidence due to the return of political stability in Kenya, as well as renewed interest in major infrastructure projects both in Kenya and across the region. We expect this to continue throughout 2018,” said Daniel Heal, Control Risks’ senior partner for East Africa.
He, however, noted the country has a pending repayment of the first portion of a eurobond worth $774.8 million (Sh79.8 billion) in 2018 and should trigger the government to refocus attention on controlling public borrowing and spending before debt becomes unmanageable.
The firm notes while the country remains highly unlikely to default, growing interest payments and international banks’ shrinking appetite to provide further loans will result in lower public spending, which has been a key driver of economic growth in recent years.
It says the government will need to consolidate stability and focus on building good working relationships with counties to keep political risks at bay.