Falling forex putting East Africa economies at risk of default

Kenya shilling and dollar

US dollars and Kenya shilling at a forex bureau in Nairobi. PHOTO | NMG

East African economies are facing the risk of default on their foreign loan obligations over rising debt repayment spending, falling forex exchange reserves and weakening currencies.

World Bank’s International Debt data reveals that EA countries are struggling to accumulate sufficient forex reserves to meet their loan obligations, a situation compounded by flagging export receipts and depreciating local currencies, which has made the cost of dollar-denominated loans shoot through the roof.