Fitch Ratings downgraded Kenya's credit rating to B- from B, citing increased risks to public finances following President William Ruto's withdrawal of proposed tax hikes in response to violent protests. The agency noted that the government's decision to backtrack on the Finance Bill 2024 has heightened political instability and raised domestic debt costs, with the country's debt-to-GDP ratio nearing 72%. Fitch maintained a stable outlook but warned of prolonged social unrest complicating fiscal consolidation efforts and presenting risks to economic activity. This downgrade follows a similar action by Moody's, indicating a broader trend among rating agencies regarding Kenya's fiscal health. Analysts express concerns that further downgrades could trigger larger market sell-offs by investors, particularly as two major agencies would have issued similar ratings. The Kenyan government plans to address its fiscal challenges by increasing borrowing and cutting expenditures, amidst a looming fiscal deficit widening to 4.7% of GDP by mid-2025.