Nairobi — The International Monetary Fund (IMF) raised its assessment of the chance of Kenya’s external debt distress to moderate from low due to increasing refinancing risks and narrower safety margins in East Africa’s biggest economy. The Washington-based lender estimates Kenya’s total public debt will peak at 63.2% of gross domestic product this year and gradually decline over the medium term. This compares with 58% in 2017 and 53.2% in 2016, when the nation ramped up infrastructure projects. “The higher level of debt, together with rising reliance on non-concessional borrowing, have raised fiscal vulnerabilities and increased interest payments on public debt to nearly one fifth of revenue, placing Kenya in the top quartile among its peers,” the IMF said in an e-mailed statement.
It urged Kenya’s Treasury to refinance debt using concessional loans to lengthen maturities in the coming year and limit commercial credit for projects with high social and economic returns. While ...
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