Kenya to avoid local debt, faces higher costs abroad

Kenya may face higher borrowing costs abroad due to a bigger 2016/17 budget deficit but its improved management of domestic borrowing will avoid the kind of spike in government debt yields seen in the local market in late 2015, the IMF said on Friday.

Kenya’s budget deficit is forecast to climb to 9.3 percent of gross domestic product in the 2106/17 fiscal year starting on July 1, compared to below 8 percent in the current 2015/2016 financial year, a rise which has unnerved investors.