Our future as a country is in jeopardy thanks to RUTO as another U.S. agency downgrades Kenya's credit rating – Look!

Thursday, August 29, 2024 – Kenyans are now deeply concerned about their country's future after the U.S. agency S&P followed Fitch and Moody's in downgrading Kenya's credit rating from ‘B’ to ‘B-’.

The downgrading decision points to the financial challenges facing Kenya, raising significant concerns about the country’s future economic stability and debt management.

The ratings cut is a direct response to President William Ruto’s decision to abandon the Finance Bill, which aimed to generate Ksh346 billion through new taxes after protests by the Gen Zs and deaths as a result of those protests.

S&P's downgrade indicates a growing skepticism about Kenya's ability to stabilise its economy in the medium term.

"The downgrade reflects our view that Kenya's medium-term fiscal and debt outlook will deteriorate following the government's decision to rescind all tax measures proposed under the 2024/2025 Finance Bill," S&P stated in its release.

The downgrades have put Kenya under intense international scrutiny, raising alarms about the government’s fiscal management and its capacity to service its substantial debt load.

This comes at a time when the government has revised its budget for the 2024/25 financial year, cutting spending and increasing its local borrowing target to cover the wider fiscal deficit.

Kenya’s economic woes are further exacerbated by its heavy reliance on external financing, particularly from institutions like the International Monetary Fund (IMF) and the World Bank.

The downgrades by S&P, Fitch, and Moody’s collectively paint a picture of a nation on the brink of a fiscal crisis. 

With rising borrowing costs and a limited capacity to introduce new revenue measures, Kenya’s path to economic recovery appears increasingly uncertain.

The Kenyan DAILY POST