Kenya will access about US$410 million from the International Monetary Fund(IMF) once a review of its financing program is completed by the IMF’s Executive Board in the coming weeks.
This disbursement is part of the US$ 2.34 Billion finance package that the Fund extended to the country in April this year to assist the country deal with the adverse effects of the COVID-19 pandemic and address the debt problem.
A staff team from the IMF held a review of progress made by Kenya under this 38-month program between April 29th and May 14th, with its decision now awaiting approval from IMF’s Executive Board for discussion and conclusion.
Kenya makes progress in meeting IMF conditions
While the Fund is has expressed satisfaction with the progress made by Kenya to contain the spread of the COVID-19 pandemic and has assured of its support for the country’s coronavirus vaccination program, it is still concerned that persistence of the pandemic suggests the pickup envisioned in 2021 will be slightly less strong than anticipated.
IMF staff now project the country’s economy to expand by 6.3% in 2021.
The Fund said that the COVID-19 pandemic shock has unfortunately also reversed some of the poverty reduction gains Kenya achieved in recent years while public debt also remains elevated.
The country met its fiscal balance target at the end of March by a wide margin and had fully implemented its planned tax policy measures, says the IMF staff review.
But with continuing pressures from the pandemic, the IMF says tax revenue yields were slightly below expectations.
Among tough IMF conditions that Kenya to access IMF funding support during the 38-month program includes publishing an audit of all COVID-related expenditures in the 2019/20 financial year while setting up a public procurement portal with comprehensive information on all firms that win procurement contracts, including the names of their beneficial owners.
In addition, Kenya is required to adopt a common payroll system at the National and County level to assist contain spending growth and limit the scope for corruption.