Fitch Ratings says Kenya’s general elections scheduled for 9th August 2022 pose downside risks to the growth of East Africa’s largest economy, especially in the second and third quarters of the year.
The rating agency forecasts a moderate disruption, based on events around the 2017 polls. But that violence will be below that of the 2007 and 2012 polls, and that is expects medium-term growth potential to remain at approximately 6%,” said the rating agency.
Kenya experienced a full-blown political crisis around the 2007 election and significant disruption around the 2012 election.
The 2017 election saw minimal social disruption but had to be re-run after Kenya’s Supreme Court invalidated the initial results.
The reconciliation between President Kenyatta and presidential candidate and opposition leader Raila Odinga ended some of the existing tensions between the ruling Jubilee coalition and the opposition parties.
However, new political tensions have emerged with a split within the ruling coalition and the formation of new political alliances as Kenya scuttles towards the August 2022 polls.
Thus, Fitch Ratings affirmed Kenya’s Long-Term Foreign-Currency Issuer Default Rating (IDR) at ‘B+’ with a Negative Outlook.
The ‘B+’ rating is supported by a record of solid growth and relative macroeconomic stability.
Additionally, the US$2.4 billion support from the IMF programme is a significant boost.
The rating agency’s Negative Outlook for Kenya stems from uncertainty over the fiscal consolidation plan and risks posed by the August 9th polls on the country’s post-pandemic economic recovery.
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