The International Monetary Fund (IMF) has approved the release of $606 million (about Ksh 78 billion) loan to Kenya in two parts.
This was after IMF completed its seventh and eighth reviews of Kenya’s economy and the country’s ability to repay its debts.
On October 30, 2024 the IMF announced the completion of these reviews under different financial arrangements.
This includes the Extended Fund Facility (EFF) and the Extended Credit Facility (ECF), approved in April 2021.
It includes the Resilience and Sustainability Facility (RSF), which was approved in July 2023. The funds will be disbursed as follows: about $485.8 million (Ksh62.5 billion) will come from the EFF/ECF arrangements, while approximately $120.3 million (Ksh15.4 billion) will come from the RSF arrangement.
Gita Gopinath, the First Deputy Managing Director of the IMF, stated that Kenya’s economy is doing better than many other countries in the region.
She noted that economic growth is strong, inflation is decreasing, and external support is helping the Kenyan Shilling.
However, Gopinath also pointed out some concerns. Although foreign exchange reserves are improving, fiscal performance has fallen short of expectations.
There have been issues with revenue and exports, which increase debt risks. Some planned reforms have also faced delays.
She emphasized that quick decision-making is important to manage fiscal risks. “We need to adapt policies to changing conditions to keep stability and meet program goals,” she said.
Gopinath praised the Central Bank of Kenya for its efforts to maintain price stability and improve monetary policy.
She also highlighted the importance of exchange rate flexibility to help Kenya withstand external shocks. On October 25, a delegation from Kenya’s National Treasury and the Central Bank traveled to Washington D.C. for the 2024 IMF/World Bank Annual Meetings.
This trip aimed to build partnerships and secure funding for Kenya’s economic recovery. Treasury Cabinet Secretary John Mbadi mentioned that these meetings are crucial for showcasing Kenya’s successes in managing inflation and promoting growth.
