[{"data":1,"prerenderedAt":-1},["ShallowReactive",2],{"doc-detail-110354-en":3,"doc-seo-110354-105":29,"detail-sidebar-cat-0-en-105":90},{"code":4,"msg":5,"data":6},0,"success",{"doc_id":7,"user_id":8,"nickname":9,"user_avatar":10,"doc_module":4,"category_id":11,"category_name":12,"doc_title":13,"doc_description":14,"doc_content":15,"file_id":16,"file_url":17,"file_type":18,"file_size":19,"view_count":4,"is_deleted":4,"is_public":20,"is_downloadable":20,"audit_status":20,"page_count":21,"language":22,"language_code":23,"site_id":24,"html_lang":23,"table_of_contents":25,"faqs":26,"seo_title":13,"seo_description":14,"update_tm":27,"read_time":28},110354,549758252649,"Ivy","https://ap-avatar.wpscdn.com/avatar/8000253669c5317157?_k=1778319167496531819",8,"Research & Report","Kenya - Joint Bank-Fund Debt Sustainability Analysis - Summary","Kenya’s debt is assessed as sustainable despite high overall and external risk of debt distress ratings. Past high deficits and pandemic-era export and output losses worsened near-term solvency and liquidity indicators, while 2022 market pressures and tighter global monetary conditions reduced access to commercial borrowing. Improvements in the present value of external debt-to-exports reflect stronger FY2021/22 fiscal outcomes, planned capital spending rationalization, and faster tourism recovery, partly offset by higher nominal interest rates. Fiscal consolidation is expected to stabilize debt next year, keep progress gradual for external debt service-to-exports, and protect social spending under export and exchange rate shocks.","Public Disclosure  \nPub lic Disc losure Authorized  \nApproved by:  \nAsad Alam and Marcello Estevão (IDA) Catherine Pattillo and Eugenio Cerutti (IMF)  \nPrepared by the staff of the International Development Association (IDA) and the International Monetary Fund (IMF)  \n\n| KENYA: JOINT BANK-FUND DEBT SUSTAINABILITY ANALYSIS |  |\n| --- | --- |\n| Risk of external debt distress | High |\n| Overall risk of debt distress | High |\n| Granularity in the risk rating | Sustainable |\n| Application of judgment | No |\n\nKenya’s debt is sustainable. While overall and external ratings for risk of debt distress remain high, debt dynamics are being bolstered by the fiscal consolidation under the IMF supported program.1 High deficits in the past, combined with export and output losses in 2020 caused by the pandemic, have resulted in near-term deterioration of solvency and liquidity debt indicators. Market pressures in the wake of the Russian invasion of Ukraine and the monetary tightening in advanced countries have limited access to commercial borrowing in 2022. Compared to the last DSA assessment,2 the outlook for present value of external debt-to-exports has improved, due to the stronger than anticipated fiscal outturn in FY2021/22 and planned rationalization of capital spending in FY2022/23, reflected in lower-than-previously anticipated external financing, as well as the faster recovery of tourism and the boost to exports from higher export prices in 2022. These positive trends are partly offset by the impact of the projected higher nominal interest rates on the present value of debt, reflecting the higher cost of external loans with floating interest rates and of new external commercial and domestic debt. Kenya’s debt indicators will improve as fiscal consolidation progresses and exports and output recover from global shocks, although the improvement remains gradual for the external debt service-toexports ratio. Sustained fiscal consolidation would stabilize debt next year and bring it to more prudent levels over the medium term , while protecting social spending. The DSA suggests that Kenya is susceptible to export and exchange rate shocks; more prolonged and protracted shocks to the economy would also present downside risks to the debt outlook.  \n1 The DSA analysis reflects a debt carrying capacity of Medium considering Kenya’s Composite Indicator Index of  \n3.02, based on the IMF’s October 2022 World Economic Outlook and the 2021 World Bank Country Policy and Institutional Assessment (CPIA) .  \n2 See IMF Country Report No. 021/275 published in December 2021.  \n1. For the purposes of this analysis, the perimeter of public debt covers the debt of the central government, Social Security Fund, central bank debt taken on behalf of the government, and government guaranteed debt (Text Table 1) . Debt data include both external and domestic obligations and guarantees:  \n• The external DSA covers the external debt of the central government and the central bank, including publicly guaranteed debt, as well as of the private sector.  \n• The public DSA covers both external and domestic debt incurred or guaranteed by the central government. It does not cover the entire public sector, such as extra-budgetary units and county governments.3 Debt coverage excludes legacy debt of the pre-devolution county governments,4 estimated at Ksh 53.8 billion (0 .5 percent of GDP), which is included in a stress scenario.  \n• The DSA uses a currency-based definition of external debt. There is no significant difference between a currency-based and residency-based definition of external debt, as nonresidents’ direct participation in the domestic debt market is small, at below one percent of total outstanding government securities (Text Table 2) .  \n2. The DSA includes a combined contingent liabilities stress test aimed at capturing the public sector’s exposure to SOEs, PPPs, and a financial market shock. In particular, the stress test incorporates the following shocks (Tex","cbCaisZGkYsUuYew","https://ap.wps.com/l/cbCaisZGkYsUuYew","pdf",732801,1,26,"English","en",105,"# Key Risk Ratings\n## External and overall debt distress risk\n## Granularity and judgment application\n# Debt Dynamics and Main Drivers\n## Fiscal consolidation and program support\n## Pandemic impacts and liquidity/solvency deterioration\n## Market pressures and borrowing constraints\n# Outlook, Offsets, and Medium-Term Path\n## Improvements from FY2021/22 and 2022 export recovery\n## Offsets from higher nominal interest rates\n## Gradual improvement in debt service indicators\n# Debt Coverage and Methodology\n## Public debt perimeter and subsectors\n## External definition and exclusions\n## Currency-based external debt approach\n# Contingent Liabilities Stress Test\n## SOEs, PPPs, and financial market shock\n## Legacy county government debt inclusion","[{\"question\":\"What are the overall and external risk ratings for Kenya’s debt distress?\",\"answer\":\"The overall risk of debt distress is High, and the external risk of debt distress is also High. The granularity in the risk rating is indicated as Sustainable, while judgment application is marked as No.\"},{\"question\":\"What factors improved Kenya’s external debt metrics compared with the previous DSA?\",\"answer\":\"The present value of external debt-to-exports improved due to a stronger-than-anticipated fiscal outturn in FY2021/22, planned rationalization of capital spending in FY2022/23, lower-than-previously anticipated external financing, and faster tourism recovery plus higher export prices in 2022.\"},{\"question\":\"How do higher interest rates affect the debt outlook?\",\"answer\":\"Higher nominal interest rates increase the present value of debt, reflecting higher costs of external loans with floating interest rates and of new external commercial and domestic debt, partially offsetting the positive trends.\"}]",1784485037,66,{"code":4,"msg":30,"data":31},"ok",{"site_id":24,"language":23,"slug":32,"title":13,"keywords":33,"description":14,"schema_data":34,"social_meta":85,"head_meta":87,"extra_data":89,"updated_unix":27},"kenya-joint-bank-fund-debt-sustainability-analysis-summary","",{"@graph":35,"@context":84},[36,53,67],{"@type":37,"itemListElement":38},"BreadcrumbList",[39,43,47,50],{"item":40,"name":41,"@type":42,"position":20},"https://docshare.wps.com","Home","ListItem",{"item":44,"name":45,"@type":42,"position":46},"https://docshare.wps.com/document/","Document",2,{"item":48,"name":12,"@type":42,"position":49},"https://docshare.wps.com/document/research-report/",3,{"item":51,"name":13,"@type":42,"position":52},"https://docshare.wps.com/document/kenya-joint-bank-fund-debt-sustainability-analysis-summary/110354/",4,{"url":51,"name":13,"@type":54,"author":55,"headline":13,"publisher":57,"fileFormat":60,"inLanguage":23,"description":14,"dateModified":61,"datePublished":61,"encodingFormat":60,"isAccessibleForFree":62,"interactionStatistic":63},"DigitalDocument",{"name":9,"@type":56},"Person",{"url":40,"name":58,"@type":59},"DocShare","Organization","application/pdf","2026-07-19",true,{"@type":64,"interactionType":65,"userInteractionCount":4},"InteractionCounter",{"@type":66},"ViewAction",{"@type":68,"mainEntity":69},"FAQPage",[70,76,80],{"name":71,"@type":72,"acceptedAnswer":73},"What are the overall and external risk ratings for Kenya’s debt distress?","Question",{"text":74,"@type":75},"The overall risk of debt distress is High, and the external risk of debt distress is also High. The granularity in the risk rating is indicated as Sustainable, while judgment application is marked as No.","Answer",{"name":77,"@type":72,"acceptedAnswer":78},"What factors improved Kenya’s external debt metrics compared with the previous DSA?",{"text":79,"@type":75},"The present value of external debt-to-exports improved due to a stronger-than-anticipated fiscal outturn in FY2021/22, planned rationalization of capital spending in FY2022/23, lower-than-previously anticipated external financing, and faster tourism recovery plus higher export prices in 2022.",{"name":81,"@type":72,"acceptedAnswer":82},"How do higher interest rates affect the debt outlook?",{"text":83,"@type":75},"Higher nominal interest rates increase the present value of debt, reflecting higher costs of external loans with floating interest rates and of new external commercial and domestic debt, partially offsetting the positive trends.","https://schema.org",{"og:url":51,"og:type":86,"og:title":13,"og:site_name":58,"og:description":14},"article",{"robots":88,"canonical":51},"index,follow",{"doc_id":7,"site_id":24},{"code":4,"msg":5,"data":91},[92,96,100,104,109,114,119,122,127,130,134],{"id":20,"doc_module":4,"doc_module_name":45,"category_name":93,"show_sort_weight":94,"slug":95},"Story & Novel",90,"story-novel",{"id":46,"doc_module":4,"doc_module_name":45,"category_name":97,"show_sort_weight":98,"slug":99},"Literature",80,"literature",{"id":52,"doc_module":4,"doc_module_name":45,"category_name":101,"show_sort_weight":102,"slug":103},"Exam",70,"exam",{"id":105,"doc_module":4,"doc_module_name":45,"category_name":106,"show_sort_weight":107,"slug":108},5,"Comic",60,"comic",{"id":110,"doc_module":4,"doc_module_name":45,"category_name":111,"show_sort_weight":112,"slug":113},6,"Technology",50,"technology",{"id":115,"doc_module":4,"doc_module_name":45,"category_name":116,"show_sort_weight":117,"slug":118},7,"Healthcare",40,"healthcare",{"id":11,"doc_module":4,"doc_module_name":45,"category_name":12,"show_sort_weight":120,"slug":121},30,"research-report",{"id":123,"doc_module":4,"doc_module_name":45,"category_name":124,"show_sort_weight":125,"slug":126},9,"Religion & Spirituality",20,"religion-spirituality",{"id":125,"doc_module":4,"doc_module_name":45,"category_name":128,"show_sort_weight":125,"slug":129},"World Cup","world-cup",{"id":131,"doc_module":4,"doc_module_name":45,"category_name":132,"show_sort_weight":131,"slug":133},10,"Lifestyle","lifestyle",{"id":135,"doc_module":4,"doc_module_name":45,"category_name":136,"show_sort_weight":105,"slug":137},19,"General","general"]