The US rating agency S&P has downgraded Kenya’s credit rating, citing President William Ruto’s decision to scrap a controversial finance bill after deadly protests.
“S&P Global Ratings lowered its long-term sovereign credit rating on Kenya to B- from B,” the rating agency said Friday.
“The downgrade reflects our view that Kenya’s medium-term fiscal and debt outlook will deteriorate following the government’s decision to rescind all tax measures proposed under the 2024/2025 Finance Bill,” a statement said.
The agency’s outlook was “stable,” citing expected “strong economic growth and continued access to concessional external financing.”
However, it added, “Kenya’s structurally large external imbalances remain a key vulnerability.”
Ruto cancelled the unpopular tax hikes after the initially peaceful and youth-led nationwide rallies turned violent, leaving more than 60 people dead, according to Kenyan rights groups.
The demonstrations prompted the worst crisis of his presidency, forcing Ruto to promise government spending cuts and then sack almost his entire cabinet. Although physical protests have mostly stopped, many young Kenyans continue to call for his resignation online.
Ruto’s administration is still grappling with the country’s $78 billion debt. The finance minister indicated earlier this month that the government planned to raise about $1.2 billion by reinstating some unpopular taxes contained in the abandoned 2024 finance bill.
The S&P announcement follows the decision by US-based agency Fitch earlier this month also to downgrade Kenya’s credit rating. Moody’s also downgraded the country’s debt rating in July, pushing it further into junk territory.