Kenyans are heading to the polls on August 9 amid signs that East Africa’s biggest economy could face tough times.
The country’s currency, the shilling, depreciated sharply. This means that the Kenyan treasury will struggle to repay its huge debt denominated in dollars. The country’s debt has risen from $16 billion in 2013 to $71 billion in 2021. As a result, the Kenya devote nearly 30% of its income to payment of interest.
The world Bank and Eurobond holders account for almost half of Kenya’s external debt, at 28% and 20% respectively, according to Treasury data. The spinewhose loans have been used to finance infrastructure, in particular the Standard gauge railwayis responsible for 19% of Kenya’s external debt.
The coronavirus pandemic a nude at tourismone of Kenya’s main sources of foreign exchange, while soaring energy prices threaten to unravel the recovery that began in 2021. With soaring interest rate globally, it will become destined for Kenya to borrow or repay its lenders.
**Charlie Robertson,**Global Chief Economist of Capital of the Renaissance, discusses in Business Africa the difficult decisions that await the new government of Kenya.
the International Monetary Fund (IMF) to extend more than $1 billion in credit to Tanzania to help the East African country recover from the pandemic and the effects of the war in ukraine. This loan, subject to the approval of the IMF’s Board of Directors, will be disbursed over 40 months.
The growth slowed to 4.8% in 2020, before recovering to just 4.9% the following year, travel restrictions imposed by Covid-19 having hit the tourism sector, a key source of income for Dar es Salaam.
NNPC becomes a private entity
The Nigerian National Oil Company (NNPC), which has been a state monopoly for more than 50 years, will open its capital to private investment. It is also part of a new petroleum law passed by parliament last year, which aims to make the oil sector in the country, which is plagued by lack of investment and at the Corruption.
Abuja hopes that the privatization of the company will reduce the government’s fiscal responsibilities to its forecast, thereby freeing up funds for other projects. Last year, the company said it plans to go public as early as 2024.