Kenya’s new President William Ruto faces a steep debt mountain as he enters office. Servicing the country’s debts consumed 63.5% of tax revenues in the first two months of the current financial, a rate that’s expected to continue next year. For the first time, debt repayments are also projected to outstrip the costs of running the government.
Kenya’s debt increased fourfold under Ruto’s predecessor, raising the danger of debt distress. Ruto has so far shed little light on how he’ll address the burden beyond calling for Kenyans to boost domestic savings and pay their taxes. The new government faces a $7.1 billion budget shortfall in the current financial year, raising the danger that it could be forced into more high-cost commercial loans.
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