Kenya is in the final stages of unlocking more funding from the International Monetary Fund (IMF) by the end of 2024, the Central Bank of Kenya (CBK) Governor Dr. Kamau Thugge disclosed this week.
- •In the post monetary policy briefing, the CBK governor disclosed that Kenya is in talks with the IMF and plans to combine the 7th and 8th reviews of the programme.
- •According to the IMF, the disbursement will unlock about US$976 million as the remaining amount of the programme which is expected to end in April 2025.
- •The 7th Review was staged for May 2024 while the 8th Review was expected in October 2024 with the final review expected in March 2025.
“We are in the final stages of the agreement. The fiscal framework has been agreed,” Dr. Thugge added in the post MPC briefing.
The disbursement is expected to enhance government reserves which are expected to accumulate by US$1.9 billion by year end.
“The fiscal framework has been agreed with the fiscal deficit at 4.3 percent of GDP and so in our projections of a US$1.9 billion accumulation in reserves, we have assumed a disbursement from the IMF before the end of December 2024,” he added.
The 7th review was done in June, days before the deadly protests that led to the withdrawal of the estranged Finance Bill 2024 which contained US$2.7 billion tax increases. The IMF reached staff level agreement on the former, awaiting approval which was delayed owing to budgetary adjustments post Finance Bill 2024.
In 2021, Kenya agreed to a four-year loan with the IMF, and subsequently signed up for additional lending to support climate change measures in May 2023, taking its total IMF loan access to $3.6 billion.
Earlier, the government of Kenya asked the IMF to assess the country’s situation regarding governance and corruption. This followed IMF major shareholders’ urges to Kenya as part of progressive efforts to unlock lending that had stalled since June.