This archive report was first published on 13 May 2020.
Kenya's debt risk has taken a hit from the COVID-19 pandemic, with the International Monetary Fund (IMF) upgrading the country's risk of debt distress to high from moderate.
According to the IMF's assessment published on May 12, 2020, Kenya's debt stood at 61.7% of its gross domestic product (GDP) at the end of 2019, up from 50.2% at the end of 2015.
The increase in debt is attributed to budget deficits caused by large infrastructure projects, such as a new railway line, which have worsened the country's debt situation.
"The risk of debt distress has moved to high from moderate due to the impact of the global COVID-19 crisis, which exacerbated existing vulnerabilities," the IMF said in its debt sustainability analysis.
Despite the upgrade in debt risk, the IMF noted that Kenya's debt remains sustainable, and the country has received $739 million in emergency funding to help it cope with the COVID-19 crisis.
The government has implemented various fiscal measures to mitigate the economic impact of the pandemic, including tax cuts, which have had a mixed impact on the economy.
