According to a research published by Moody’s Investors Service, Kenya is one of the developing nations experiencing an economic crisis.
A global financial company called Moody’s offers credit ratings, risk analysis, and research for stocks, bonds, and governmental institutions to investors.
According to the study, which Reuters analyzed and reported, conventional warning indicators point to financial problems in Kenya, Egypt, Tunisia, Ghana, and other African nations
The economic crisis was reportedly exacerbated in part by collapsing currencies brought on by a nearly depleted foreign exchange reserve, particularly in Kenya.
According to David Rogovic, vice president and senior analyst at Moody’s Investors Service, Kenya is vulnerable due to the amount of debt it has relative to its reserves and the financial challenges it faces in managing its debt obligations.
“These countries are the most vulnerable just because of the amount of debt coming due relative to reserves, and the fiscal challenges in terms of stabilising debt burdens.”
According to reports, Kenya spends close to 30% of its income on interest payments.
Reuters stated that this position is significant as it now has no access to the capital markets and has notes maturing in 2024 worth more than $500 million.
Similar worries were voiced two weeks ago by Fitch, a global credit rating agency, who noted that Kenya’s debt profile had a B+ outlook, which is a negative outlook.
This implies that Kenya might break its borrowing arrangements or default on its obligations.
The agency forecasts challenging financial conditions due to the US Fed rate increase, a strong dollar, and high inflation.
Kenya’s grade, according to the rating agency, is supported by a history of strong growth and relatively stable macroeconomic conditions.