S&P downgrades Kenya's sovereign credit rating after repeal of controversial financial legislation
Date
8/25/2024 5:56:54 AM
(MENAFN) On Friday, S&P Global Ratings downgraded Kenya's long-term sovereign credit rating from B to B-, following President William Ruto's decision to abandon contentious financial legislation amid widespread protests. The agency's statement highlighted that the downgrade reflects concerns over Kenya's medium-term financial stability and debt outlook, which are expected to worsen due to the government's reversal of tax measures outlined in the 2024-25 draft budget. Despite this, the outlook remains "stable," bolstered by expectations of robust economic growth and ongoing support from concessional external financing.
The protests, initially peaceful but escalating into violence resulting in approximately 60 deaths according to Kenyan rights organizations, prompted President Ruto to cancel the proposed tax increases. This crisis has been one of the most severe challenges of his presidency, leading to significant reductions in government spending and the dismissal of many officials. Although protests have largely subsided, calls for Ruto's resignation persist online, particularly among the youth. The administration continues to grapple with a substantial public debt of USD78 billion and is now seeking to raise USD1.2 billion through some of the previously proposed taxes in the 2024 budget.
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