Kenya gets $433 million loan from IMF
NAIROBI, Kenya - The International Monetary Fund [IMF] staff has agreed o disburse $433 million to Kenya as part of a $2.34 billion loan approved in 2021.
According to IMF's team led by Mary Goodman and Tobias Rasmussen, "The agreement is subject to the approval of IMF management and the Executive Board in the coming weeks."
IMF said that Kenya would have access to SDR 336.54 million (equivalent to about $433 million), bringing the total IMF financial support under these arrangements to about $1,548 million.
The loan approval is part of the fourth review of Kenya’s economic program under the EFF and ECF arrangements.
This latter amount includes the proposed augmentation of access of SDR162.84 million to cover external financing needs resulting from drought and challenging global financing conditions.
IMF termed Kenya's economy as resilient in the face of a challenging environment.
In its projection Kenya's Real GDP to grow 5.3 percent amid domestic policy tightening and a global slowdown that are likely to also weigh on growth in 2023.
Last year, Kenya's economy expanded by six percent supported by robust services sector activity notwithstanding a decline in agricultural output.
IMF statement states that "Food insecurity has increased on a severe drought in parts of the country. Higher food and energy prices have pushed up inflation and pressured the external position."
At the same time, the peaceful completion of elections has lifted uncertainty and credit to the private sector. The medium-term outlook remains favorable, supported by proactive reform efforts by the new government.
The medium-term outlook remains favorable, supported by proactive reform efforts by the new government.
“We have seen good progress on fiscal adjustment needed to address debt vulnerabilities through pressures remain elevated," IMF said.
It added that the overall deficit on a cash basis declined from 8.2 percent of GDP in FY2020-2021 to 6.2 percent of GDP in FY2021-2022.
This was supported by strong tax revenue, which increased from 12.6 to 13.7 percent of GDP.
For Kenya to access the loan, Kenya is expected to continue with structural and governance reforms.
This includes completing efforts underway to publish beneficial ownership information for awarded government contracts, which will be a major step towards greater transparency and accountability.