Kenya’s Economy, Debt At Acceptable Levels, Says IMF
The International Monetary Fund (IMF) has said Kenya’s economy, growth prospects and international debt are within acceptable levels.
The comments follow criticism from opposition members over President Kenyatta’s government and its handling of the nation’s economy. The IMF insists Kenya’s growth prospects are in fact better than those of peer nations on the sub-Saharan African region.
Kenya’s debt ‘low-risk’
Kenya’s IMF Resident Representative Armando Morales has downplayed fears that the country’s GDP-to-debt ratio is plunging into crisis.
“Debt in Kenya is classified by the IMF as low-distress risk,” he said at the launch of the Regional Economic Outlook for sub-Saharan Africa. “And to move to distress, you have to move through two other categories – moderate risk and high risk, and Kenya is below that. So it is very unlikely that the country will face a situation of distress in the coming years,” he added.
Kenya on the path to sustainability
While Kenya’s economic concerns are very real, Morales insists the country is on a sustainable path. Careful monitoring will be needed to ensure Kenya stays on the manageable side of debt, but calls of crisis are a long way off he says.
“As long as the deficits for this year and the coming fiscal years remain projected at the same levels, then it is sustainable,” Morales said. “Rating agencies have been downgrading the outlook for Kenya but not the rate, meaning that they still believe, as we do, that it is sustainable.”
Opposition parties in Kenya have accused the ruling government of economic mismanagement and allowing a system of corruption to flourish. The IMF’s claims won’t do much to calm concerns over corruption in the country, but may help relieve some of the pressure on President Kenyatta.
Not everyone agrees with the comments made by IMF Representative Armando Morales, however. Critics claim the IMF is too selective with the truth regarding countries’ economic status, pointing out that Kenya’s wealth disparity, dwindling cash reserve and levels of corruption are genuine causes for concern.
“Board of Governors International Monetary Fund” by International monetary fund – http://www.imf.org/external/np/adm/pictures/captions.htm. Licensed under Public Domain via Wikimedia Commons.