A sample credit report.[Photo/pinterest]
Kenya has maintained its high credit rating status, according to a recent report, meaning it can borrow more funds for development. The Moody Rating System report shows the country’s credit rating B1 status remained unchanged from the last review.
A B1 rating is the same as S&P B+ ratings and B+ Fitch rating which indicates stability and which qualifies a country for more funds for development. “The B1 rating is due to Kenya’s economic resilience in the face of multiple shocks in recent years.
This resilience is driven by ongoing structural changes involving economic diversification, the rapid adoption of communications technology and improvements in infrastructure,” the report said. Moody, however, says Kenya debt level estimated at Sh2.675 trillion (49.9 percent of GDP) is relatively higher compared with countries with a similar rating.
David Aldrich, associate managing director, head of relationship management at EMEA and Emerging Markets described the country’s creditworthiness as favorable. This, he says, could encourage the government to borrow more, especially for infrastructure projects.
Aldrich said the credit quality of countries in sub-Saharan Africa over the next 12-18 months, Kenya included, will be supported by infrastructure investment, structural reforms and competitiveness gains from currency depreciation.
He said lower oil and commodity prices, uneven global growth, latent political risk, especially those witnessed in Burundi and Burkina Faso recently and tighter external financing conditions, pose challenges of different magnitudes to the region’s economies. According to the report, outlooks for 13 of out 17 sub-Saharan Africa countries will be stable.