Kenya’s external debt sustainability indicators illustrate that the country faces a high risk of debt distress, the National Treasury says in a report released Thursday.
The indicators, which include the debt to export ratio, debt service to export ratio and debt to revenue ratio point out that the country is operating on the edge, says the Treasury in the Budget Review and Outlook Paper for 2020.
According to Treasury, Kenya’s current debt to export ratio stands at 288, against a threshold of 240. The country expects to bring the ratio below the threshold in 2025.
Kenya’s debt service to export ratio stands at 28 against a threshold of 21 while the debt service-to-revenue ratio currently stands at 14.5 against a threshold of 23.
“The baseline projection scenario of Kenya’s external debt sustainability indicates that the country is currently within sustainable levels as a stronger performer. The debt sustainability indicators show that Kenya faces a high risk of external debt distress due to breach of external debt indicators,” says Treasury.