World Bank considers removing Kenya from high-risk debt list


Based on a projection on exports and economic growth, Kenya’s debt risk profile could improve soon

Kenya

World Bank considers removing Kenya from high-risk debt list. Source: pexels.com

Kenya is set to be removed from nations with a high loan default rate by the World Bank Group in 2028, according to Business Daily Africa. However, this will only happen if the countries’ lawmakers adhere to a strategy that will see government expenditure and the growing taxes curtailed.

Implementation of policy reforms and fiscal consolidation programs will also play a huge role in this.

In the fiscal year 2022/23, projections on the country’s public debt burden show a peak followed by a decline. By 2028, the present value of public value is projected to fall below 55%. This report follows the $750 million Development Policy Operations released in the past week.

A projection by Ukur Yatani, the group’s Treasury Secretary, shows that the fiscal consolidation program will play a huge role in narrowing fiscal deficits in the budget. As per the projection, the fiscal deficit gap will be narrowed from 8.7% GDP in the current to 7.5% in the new fiscal year. A further 3.6% has been projected in the fiscal year 2024/25.

The latest Debt Sustainability Analysis by the International Monetary Fund and the World Bank upheld the country’s placement among nations with a high risk of debt distress. The report was carried out in April.

The country’s debt profile moved from moderate to high at the onset of the COVID-19 pandemic. This came after the measures set to contain the pandemic such as low tax collections, decrease in exports, and the delay in the implementation of the fiscal consolidation program.

We’ve reported that Swiss e-commerce in 2020 was 3 times higher than in previous years.

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