KENYA: STUBBORN INFLATION TRIGGERS UNREST AND RAISES BORROWING COSTS

   Tue, 21 March 2023

Backed by the IMF and World Bank, Kenya’s government is implementing tough austerity measures and raising new taxes, which are stoking inflation and provoking increasingly violent opposition protests. However, if the new government cannot secure concessional finance to replace maturing domestic treasury bonds, a Ghana-style debt swap for longer maturity bonds will be adopted. Meanwhile, a diplomatic spat over the treatment of Chinese traders in Kenya is straining relations with China and stalling plans for restructuring of Chinese infrastructure loans.

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