This archive report was first published on 15 July 2020.
On July 15, 2020, global ratings agency S&P revised Kenya's outlook from stable to negative due to high debt and interest burden exacerbated by the Covid-19 pandemic.
The negative outlook reflects the worsening fiscal position of the country, with the pandemic triggering layoffs and declined revenues in key sectors such as transport, retail, tourism, and aviation.
Government revenue collections are expected to take a hit, with Treasury data indicating a 14.46 percent drop in tax collections by the Kenya Revenue Authority (KRA) to Sh120.1 billion in April from Sh140.41 billion in the same month last year.
S&P Global warned that the economic crisis could widen the budget deficit to 8.7 percent of GDP in the year ended June 2020 before falling slightly to 7.9 percent in financial year 2020/2021.
The public debt was recorded at Sh6.28 trillion as at March and is expected to close at Sh6.6 trillion in financial year 2019/20.
Despite external financial support from the IMF, external debt is expected to rise sharply in 2020 and remain high in 2020-2023, according to S&P Global.
The agency affirmed a 'B+' long-term and 'B' short-term sovereign credit ratings for Kenya.
