Kenya's debt sustainable amid growth in exports, CBK says

Kenya's debt remains sustainable in the medium to long term supported by sustained policy actions and expected strong export growth, the Central Bank said in a quarterly economic report on Friday.

In the report for the period ending in March released in Kenya's capital Nairobi, the apex bank said that the country's debt burden indicators have improved supported by a stronger fiscal effort. However, the overall and external ratings for risk of debt distress remain high, according to the bank.

It noted that the country's Debt Sustainability Analysis shows that Kenya is susceptible to export, exchange rate and primary balance shocks.

"In view of this, efforts aimed at boosting exports and revenues would strengthen external debt sustainability," the Central Bank said, adding that the country's exports to Africa have been on the rise, with the value of goods exported rising in the first quarter of 2024 to hit a new high of $1.81 million.

Kenya's public and publicly guaranteed debt stood at Ksh10.3 trillion ($79.3 billion) at the end of March, representing 67 percent of the gross domestic product.

Domestic debt comprises 50.3 percent of the total debt, while external debt denominated mainly in dollars and euros makes up the rest. According to the apex bank, Kenya fully repaid its 2 billion dollars Eurobond debt before the June 24 deadline.

In February, the nation had successfully raised $1.5 billion in a Eurobond buyback offer as it sought to reduce the chance of defaulting on repayment.

This article originally appeared on The East African.