Kenya will access US$ 682.3 million in financing from the International Monetary Fund (IMF) in January 2024.
“The agreement is subject to IMF management approval and consideration by the Executive Board, which is expected in January 2024. Upon completion of the sixth review by the IMF Executive Board, Kenya would have immediate access to US$682.3 million,” the Fund said in a statement on Nov 16th.
- A deal with the IMF will provide Kenya with US$ 4.43 billion in total commitments during the duration of the entire program.
According to National Treasury Cabinet Secretary Prof Njuguna Ndung’u, an IMF mission team was in Kenya from 30th October to 15th November 2023 for the 6th review of Kenya’s program under the Extended Fund Facility (EFF) as well as the first review under the Resilient Sustainability Facility (ESF).
“Through the anchoring of policies to support economic growth and manage debt vulnerabilities, the program has protected the economy from global shocks associated with drought, inflation, unpredictable international commodity prices and tighter external financing conditions,” said Prof Ndung’u in a statement on Nov 21.
Kenya has met several targets set by the IMF, except on tax revenue, accumulation of external debt arrears due to delayed repayments as well as inflation targets.
- Some of the stiff IMF conditions on Kenya include expenditure rationalization with a focus on enhanced efficiency of public investments, better targeting of subsidies and transfers, addressing weakness in state corporations, and digital delivery of public services.
- At the conclusion of its 5th program review last year, the IMF disbursed about US$ 447 million, including a supplementary amount of US$ 216 million to help relieve Kenya’s financing constraints.
“Against this backdrop [of pressure on liquidity], the authorities are actively mobilizing additional financing from their development partners, the IMF, and commercial sources while concurrently intensifying their efforts to enhance macroeconomic policies and implement structural reforms,” the IMF said.
In July 2023, the Bretton Woods institution allowed for an immediate disbursement of US$ 415.4 million which included a US$ 110.3 million augmentation of access.
The IMF Executive Board also approved a 20-month arrangement under the Resilience and Sustainability Facility (RSF) for about US$ 551.4 million to support Kenya’s efforts to build resilience to climate change and catalyze further private climate financing.