Alarm raised over huge public debt as agency downgrades credit outlook

Cabinet secretary Henry Rotich at the treasury with Devolution cabinet secretary Ann Waiguru before they left for Parliament to read the budget on 11/06/15 PHOTO: JENIPHER WACHIE

The first warning bells on what financial analysts and economists have described as run-away public debt was sounded a fortnight ago, when a rating agency Fitch downgraded Kenya’s credit outlook to negative from stable.

It cited a steady deterioration of the country’s public finances as the reason. The low credit rating is likely to result in higher borrowing costs because the borrower is perceived to be at a higher risk of default.