Kenya has secured access to approximately $606 million following the IMF Executive Board’s completion of the seventh and eighth reviews under the Extended Fund Facility (EFF) and Extended Credit Facility (ECF), along with the Resilience and Sustainability Facility (RSF) review.
- •This approval supports Kenya’s efforts to rebuild fiscal buffers and enhance resilience to climate shocks.
- •The IMF noted that addressing external financing pressures earlier this year helped stabilize the shilling and accelerate reserve accumulation.
- •However, large revenue shortfalls and resistance to tax measures remain significant challenges.
“The EFF/ECF and RSF arrangements continue to support the authorities’ efforts to anchor macroeconomic stability, reduce debt vulnerabilities, and promote reforms,” Gita Gopinath, IMF’s Acting Chair, stated. Despite progress, the IMF stressed the need for a credible fiscal consolidation strategy, warning that Kenya’s fiscal performance fell short, adding to debt risks.
The IMF Board also flagged concerns over missed revenue targets which could threaten Kenya’s debt stability. “A credible fiscal consolidation strategy remains central,” Gopinath emphasized, noting the importance of reforms to make the tax system more efficient and equitable.
The Board urged swift reforms, particularly in governance, anti-corruption frameworks, and AML/CFT measures, to build public trust and attract climate financing. Kenya’s Central Bank was commended for decisive actions, including strengthening monetary policy and improving exchange rate flexibility to cushion against external shocks.
Economic Growth
Kenya’s economic growth, as measured by Real GDP growth, will slow down from 5.6% in 2023 to 5.0% in 2024 and 2025 respectively, the International Monetary Fund has predicted in its latest economic outlook report.
“In emerging market and developing economies, disruptions to production and shipping of commodities—especially oil—conflicts, civil unrest, and extreme weather events have led to downward revisions to the outlook for the Middle East and Central Asia and that for sub-Saharan Africa,” the IMF said in the report.
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