The International Monetary Fund on Monday, July 17, advanced a Ksh 136 billion loan to Kenya after meeting all the conditions following a ...
The International Monetary Fund on Monday, July 17, advanced a Ksh 136 billion loan to Kenya after meeting all the conditions following a successful review. Kenya will receive an immediate disbursement to the tune of Ksh 58.6 billion from the International Monetary Fund (IMF) to meet its budgetary expenses.
This follows the conclusion of the fifth review of the Extended Credit Facility (ECF) and Extended Fund Facility (EFF) y the IMF Executive Board.
The money is expected to boost Kenya’s finances as the government seeks to bridge the gap between the budget and the available funds for use.
Loan approved
“The IMF Executive Board completed the fifth reviews under EFF/ECF arrangements for Kenya, allowing for an immediate disbursement equivalent to Sh58.7 billion,” it said in a statement. Part of the funds, Sh15.5 billion are from augmentation of access.
“Kenya got a $415 million disbursement under the Extended Fund Facility and Expanded Credit Facility, programs designed to shore up its economy and boost its foreign exchange reserves, following a fifth review. It also got $551 million as part of the Resilience and Sustainability Facility to “support Kenya’s ambitious efforts to build resilience to climate change,” the IMF said in a statement.
“Kenya’s economy has been resilient despite the worst drought in many decades and a difficult external environment. The ECF and EFF arrangements continue to support the authorities’ efforts to address emerging challenges to sustain macroeconomic stability and market confidence, promote growth, and advance ongoing reforms,” said Antoinette Sayeh, IMF Deputy Managing Director and Acting Chair.
She said that the Central Bank of Kenya’s commitment to a data dependent policy stance is essential to keep inflation expectations anchored.
To improve finances
“The CBK should also continue taking appropriate steps to strengthen its reserves position and deepen the FX market while allowing exchange rate flexibility as a shock absorber.”
Kenya will also receive Ksh 77.7 bbillion under the Resilience and Sustainability Facility (RSF) in what the IMF says will support Kenya’s ambitious efforts to build resilience to climate change.
President William Ruto’s administration has vowed to improve Kenya’s finances by raising more revenue and slowing borrowing. Kenya’s public debt stood at 9.63 trillion shillings ($68.1 billion) in April, or two thirds of gross domestic product, according to the National Treasury. Debt servicing costs take up more than half of tax income.
By Wanjiru Mbaru
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