The International Monetary Fund (IMF) has approved a Ksh 55.1 billion loan to Kenya.
The new loan brings the total amount disbursed under the three-year program to Ksh 203.8 billion in addition to the Ksh 288 billion released in April last year.
Cumulative disbursements from the IMF rise to Ksh.297.3 billion ($2.416 billion) following the adjustment/augmentation of the loan facility to factor in additional resources on the request of the Kenyan government.
The IMF says Kenya has made progress on fiscal consolidation as tax performance improves and public debt levels begin to level off.
“Kenya’s commitment to its economic program supported by the Fund’s EFF and EDF facilities is anchoring debt sustainability. The economy has performed well amid slowing global growth, tighter financing conditions and volatile commodity prices, while continuing drought has increased food insecurity, and climate-related risks pose ongoing challenges,” stated IMF’s Deputy Managing Director and Acting Chair Antoinette Sayeh.
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According to the IMF, the lower-than-expected external financing and planned cuts to foreign-financed projects in the current fiscal year has resulted in lower forex reserves with the Kenya Shilling depreciating significantly against the US dollar across 2022.
The IMF states the structural reform agenda has progressed but addressing financial weakness in State Owned Enterprises (SOEs) and the planned review of the fuel pricing mechanism has been delayed by the recent political transition.
The IMF expects the Kenyan economy to grow by 5.3 per cent this year with inflation averaging at 7.7 per cent in 2022.