Kenya Election Expected to Be Closest in Years as Debt Crisis Looms

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Kenyans head to the polls on August 9 amid signs that East Africa’s largest economy could be headed for tough times.

The country’s currency- the Shilling has sharply depreciated. It means Kenya’s Treasury will face difficulty paying back its huge dollar-denominated debt.

The country’s debt rose from $16 billion in 2013 to $71 billion in 2021. As a result, Kenya spends nearly 30% of its revenues on interest payments.

The World Bank and Eurobond holders account for nearly half of Kenya’s external debt at 28% and 20% respectively, based on data from the Treasury. China, whose loans have gone on infrastructure including the Standard Gauge Railway is responsible for 19% of Kenya’s external debt.

The coronavirus pandemic hurt tourism, one of Kenya’s foremost sources of foreign exchange while soaring energy prices are threatening to scuttle the recovery which began in 2021.

With global interest rates shooting up, it is going to become costly for Kenya to borrow or pay back its lenders.

Charlie Robertson is the Global Chief Economist at Renaissance Capital. He joins the show to discuss the tough decisions awaiting Kenya’s new government.