Rating agency Moody's Investors Service has assigned stable outlook on Kenya government for in issuing debt in local and foreign currency.
The rating comes against Kenya’s intention to issue a sovereign bond in 2013 andcontinued domestic borrowing.
Rating Kenya B1, the agencysaid it reflected the resilience of the Kenyan economy, structural and institutional reforms that would reduce political risks.
But the high debt levels and vulnerability to a varietyof political, external and security risks moderated theoutlook.
“The first key factor underpinning Moody's assignment of a B1 rating to Kenya is the country's demonstrated economic resilience in the face of multiple shocks in recent years,” said Moody’s in its report released yesterday.
It added that the “resilienceis driven by ongoing structural changes involvingeconomic diversification, the rapid adoption of communications technology and improvements in infrastructure.”
But it noted that “Kenya's economic resilience is challenged by factors such as the country's low GDP per capita on a purchasing power parity basis of $1,718,and the moderate size of its economy, with a nominal GDP of $34 billion in 2011.”
Moody's would upgrade Kenya's ratings in the event of a significant improvement in the country's institutional strength as a result of successful implementation ofthe new constitution.
Further progress on economic diversification, with particular emphasis on export growth through the development of its newly discovered oil fields, would also positively impact Kenya's ratings
