The International Monetary Fund (IMF) is pushing for controlled spending and restructuring of loss-making state corporations to protect Kenyan government revenues and reduce persistent budget deficits.
The fund, which is planning to release $244 million in the coming weeks to finance the country’s budget, said tight control of spending and a medium-term revenue strategy that is under development will help anchor deficit reduction in the years ahead.
The lender also underscored the importance of maintaining the momentum of reforms to tackle difficulties at financially-troubled state-owned enterprises (SOEs), including Kenya Airways (KQ) and Kenya Power.
“At KQ, which had already benefited from a government guarantee on a large portion of its debt liabilities, steady progress on the ongoing restructuring effort will be important to minimise costs to the exchequer,” the IMF mission led by Mary Goodman as quoted by the East African.
The IMF said it is satisfied with Kenya’s progress in economic reforms and the funding deal now awaits endorsement by the Fund’s management and board.
Kenya will access $244 million, bringing the total IMF support in a 38-month financing facility to $1.17 billion under the Extended Fund Facility (EFF) and Extended Credit Facility (ECF).
