WASHINGTON, July 18 (NNN-KBC) — Kenya will receive an immediate disbursement to the tune of Ksh 58.6 billion from the International Monetary Fund (IMF) to meet its budgetary expenses.
This follows the conclusion of the fifth review of the Extended Credit Facility (ECF) and Extended Fund Facility (EFF) of the IMF Executive Board.
“Kenya’s economy has been resilient despite the worst drought in many decades and a difficult external environment. The ECF and EFF arrangements continue to support the authorities’ efforts to address emerging challenges to sustain macroeconomic stability and market confidence, promote growth, and advance ongoing reforms,” said Antoinette Sayeh, IMF Deputy Managing Director and Acting Chair.
Kenya will also receive Ksh 77.7 billion under the Resilience and Sustainability Facility (RSF) in what the IMF says will support Kenya’s ambitious efforts to build resilience to climate change.
Additionally, IMF has also approved an extension of the EFF/ECF arrangements from the current 38 months to 48 months in what is expected to grant Kenya sufficient time to implement the authorities’ reform agenda and realize the program’s key objective and an augmentation of access amounting to 75 percent of quota (SDR407.1 million) over the extended program duration for balance of payments support.
“While the medium-term outlook remains positive, in the near-term global headwinds continue to have a bearing on economic activity, amid elevated inflationary pressures. The authorities’ commitment to robust policies to sustain reforms that promote resilient and inclusive growth will support Kenya’s positive medium-term prospects,” added Sayeh.
Sayeh lauded the government for implementing key reforms against the backdrop of drought and challenging external environment.
The lender also lauded the approval of the FY2023/24 Budget and 2023 Finance Act saying they are rucial steps to support ongoing consolidation efforts to reduce debt vulnerabilities while protecting social and development expenditures.
“However, recent challenges in resource mobilization and elevated uncertainty call for contingency plans that can be quickly deployed to ringfence fiscal performance going forward. Tighter financing conditions also require a prudent debt policy and continued efforts to prioritize concessional loans,” she added.
IMF further noted that the RSF program are expected to advance Kenya’s already strong track-record at addressing climate-related challenges. — NNN-KBC