S&P revises Kenya to negative

Standard & Poor's said it revised its outlook on the long-term foreign and local currency sovereign credit ratings on the Republic of Kenya to negative from stable and affirmed the ratings at B+/B.

S&P said the outlook revision reflects its view that Kenya's fiscal performance has deteriorated more than it previously expected.

The agency understands the primary reason for the wider-than-planned deficit is related to the accelerated construction of Kenya's standard gauge railway.

However, even excluding this impact, S&P views Kenya's fiscal deficit as structurally high and persistent especially considering the relatively high nominal economic growth. In turn, this could place continued pressure on government debt, and potentially increase an already-high stock of external liabilities, the agency said.

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