Kenya gets 'moderately high risk' credit rating
- The Bb- rating is reserved for a country with a history of violent changes in leadership, runs a large deficit, has high crime rate and whose significant proportion of its population cannot access all the basic needs.
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Pan African ratings agency, Agusto & Co, has handed Kenya a âmoderately high riskâ (Bb-) rating for the next one year citing improved political and revenue outlook.
The category, which is one rank above âhigh riskâ, is reserved for a country with a history of violent changes in leadership, runs a large deficit, has high crime rate and whose significant proportion of its population cannot access all the basic needs.
The rating expires next year on September 30.
âThe assigned rating reflects the relatively diversified sources of the countryâs revenue, especially the huge contribution of income tax receipts to total revenue, its leading position as the hub of the East Africa sub-region as well as the relative stability of the Kenya shilling against major international currencies,â the agency said in a statement on Thursday.
âThe rating is however moderated by high deficit to GDP (gross domestic product) ratio, low income per capita as well as the huge foreign currency debt as a percentage of exports.â
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According to Agusto & Co., Kenyaâs rating is also bolstered by the resolution of the 2017 political crisis and the subsequent improvement in the countryâs macroeconomic environment, following the relative instability that trailed the conduct of the last general elections.
It notes that Kenya recorded its lowest real GDP growth of 4. 9 per cent in five years in 2017 on the back of the uncertain political climate, subdued agriculture production and tighter credit environment. The agency projects that Kenyaâs economy will trend upward this year with an estimated real GDP growth rate of 5.5 per cent.
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