Kenya's Finance Minister Henty Rotich has dismissed ratings agency Moody’s possible downgrade of the country’s credit scores over rising debt.
The global rating agency last month said it was looking at cutting Kenya’s credit rating from B1 due to persistent deficits as high borrowing costs continue to push its indebtedness higher, among other factors.
The minister now says that the country only has a contract with Standard & Poor’s (S&P) and Fitch to periodically gather data from Treasury.
“Moody’s is just doing freelance rating. We only have two ratings that we’ve contracted so far,” he told journalists at a breakfast meeting on Thursday morning in the capital Nairobi as he termed the agency's rating as “desk analysis”.
The government has struggled to contain its expenses and meet revenue targets due to drought earlier this year and a politically charged environment that has taken it off its policy track.
A Budget Review and Outlook Paper (BROP) released in September showed that the level of public debt to GDP ratio was expected to rise to 59 per cent, from a previous target of 51.8 per cent.
It also showed that the country’s fiscal deficit target had been revised to 7.9 per cent in the 2017/18 fiscal year from 6.2 per cent, after revenue collection fell 3.7 per cent short of target.
Mr Rotich said tax exemptions given to importers of food such as maize and sugar in the first half of this year to help mitigate the effects of a severe drought that had ravaged the region contributed to a Ksh40 billion ($400 million) short fall in revenue.
“Some of the custom duty revenues have gone down because of this exemptions on food imports to deal with the drought,” he said, adding that most of these tax breaks were coming to an end as good rainfall in the second half had helped improve food supply locally.