Supreme Court ruling will have an significant impact on Kenya's economy

Fitch says that if the tensions over the election outcome dissipate for other reasons, its sovereign credit analysis will focus on economic and fiscal policy and outturns.

The Supreme Court ruling on the recent disputed Presidential elections will have a big impact on Kenya’s economy, Fitch Ratings says.

Although it is still possible that any court decision to reject the challenge could trigger new unrest, Fitch Ratings says that the election will not result in any significant deterioration in investor or economic sentiment toward the country.

The UK-based firm projects that the economy will grow at a slower rate of 5.4 per cent, which is lower than the 5.9 per cent growth projected by the National Treasury.

“Fitch forecasts GDP growth to slow to 5.4 per cent in 2017 from 5.8 per cent last year. GDP growth in the first quarter fell to 4.7 per cent as the agricultural sector contracted 1.1 per cent due to drought while slower credit growth and uncertainty around the elections have also weighed on activity this year,” said the rating agency.

In July this year, Fitch asserted Kenya’s credit rating at B+ with a negative outlook, below the country’s ceiling affirmed at ‘BB-’, exposing a clear vulnerability to meet its financial commitments.

‘’Kenya’s public finances have deteriorated steadily since 2008, through weak revenue performance, increasing infrastructure spending and persistently high current expenditure. This is reflected in the negative outlook on Kenya’s ‘B+’ sovereign rating, which we affirmed in July,’’ stated the report.

Fitch noted that if the aftermath of the election were to lead to a major deterioration in the political or security environment that undermines Kenya’s growth performance, it would add to pressures on the rating.

Nonetheless, the agency has lauded the National Super Alliance (NASA) for contesting the recent presidential elections results in court, saying that it has helped to ease pressure on the country’s struggling economy that fell to 4.7 per cent in the first quarter.

It further stated that if the dispute is resolved through the courts, or if the tensions over the election outcome dissipate for other reasons, its sovereign credit analysis will focus on economic and fiscal policy and outturns.

All eyes are now on the Supreme Court which is expected to make a ruling on the disputed Presidential election on Friday morning. The seven bench judge will either uphold President Kenyatta’s win or annul it and send back voters to the ballot in 60 days.

JOIN OUR PULSE COMMUNITY!

Unblock notifications in browser settings.

Eyewitness? Submit your stories now via social or:

Email: news@pulselive.co.ke

Recommended articles

LIVE: Results from Kenya's 2022 elections

LIVE: Results from Kenya's 2022 elections

Africa’s richest man Aliko Dangote poised to overtake another Russian billionaire Vladimir Lisin on Bloomberg billionaires list

Africa’s richest man Aliko Dangote poised to overtake another Russian billionaire Vladimir Lisin on Bloomberg billionaires list

LIVE: Presidential election results

LIVE: Presidential election results

Mzee Kibor's will made public, revealing how vast wealth and millions will be distributed

Mzee Kibor's will made public, revealing how vast wealth and millions will be distributed

Ini Edo posts new photos amid reports of welcoming a baby through surrogacy

Ini Edo posts new photos amid reports of welcoming a baby through surrogacy

Machakos billionaire buys 680 Hotel in Nairobi

Machakos billionaire buys 680 Hotel in Nairobi

Referee behind chaos at AFCON was rushed to hospital after match

Referee behind chaos at AFCON was rushed to hospital after match

New governors-elect in 42 counties, confirmed by IEBC [LIST]

New governors-elect in 42 counties, confirmed by IEBC [LIST]

Ne-Yo speaks out after wife Crystal announced end of their 8-year marriage

Ne-Yo speaks out after wife Crystal announced end of their 8-year marriage