Kenya’s debt is manageable given its export growth, according to CBK

According to the Central Bank of Kenya’s quarterly economic report released on Friday, the country’s debt is still manageable over the medium to long term with the help of consistent policy measures and anticipated robust export growth.

The country’s debt load indicators have improved, bolstered by a greater fiscal effort, according to the central bank of Kenya, which issued its report for the period ending in March in Nairobi, the country’s capital. The bank claims that the external and overall ratings for the risk of debt distress are still high.

It was mentioned that Kenya’s Debt Sustainability Analysis demonstrates the country’s vulnerability to shocks related to exports, currency rates, and primary balance.

The Central Bank noted that the country’s exports to Africa have been increasing, with the value of goods exported rising in the first quarter of 2024 to hit a new high of $1.81 million. “In view of this, efforts aimed at boosting exports and revenues would strengthen external debt sustainability,” the Central Bank stated.

At the end of March, Kenya’s public and publicly guaranteed debt was Ksh10.3 trillion ($79.3 billion), or 67% of the country’s GDP.

The remainder of the debt is made up mostly of foreign debt denominated in dollars and euros, with domestic debt accounting for 50.3% of the overall debt. The top bank claims that Kenya paid off its $2 billion Eurobond debt in full prior to the deadline of June 24.

The country successfully raised $1.5 billion in February through a Eurobond repurchase offer, aiming to lower the likelihood of a repayment failure.