Ksh28 Billion Loan To Kenya By The International Monetary Fund

Kenya has received a Ksh28 billion loan, an approved disbursement by the International Monetary Fund (IMF). The latest disbursement is part of the third installment of a 38-month budget support program.  

According to a press release on the IMF website, the approval now brings the total funds received by Kenya to Sh143 billion. The deal signed in April 2021, is meant to address Kenya’s debt vulnerabilities. 

“The Executive Board of the IMF completed the third review under the 38-month arrangements under the Extended Credit Facility (ECF) and the Extended Fund Facility (EFF) arrangements,” IMF’s released report read. 

The IMF has commended Kenya for keeping up with the program’s structural reform requirements despite delays in implementation. 

“Kenya’s economy has rebounded strongly in a challenging environment and is projected to grow 5.7 per cent in 2022. Inflation moved above the Central Bank of Kenya’s (CBK) official target band of 2.5 per cent to 7.5 per cent in June and is expected to peak this year before easing back within the band in early 2023,” IMF added.  

The financial institution who is a multi-lateral lender, nevertheless says a strong performance in tax collection for the 2021-2022 fiscal year created fiscal space to temporarily cushion the impact of rising fuel prices through the fuel subsidy while keeping within the loan-program fiscal targets. 

The IMF continues to retain Kenya’s GDP growth projection at 5.7 per cent for 2022 and 5.3 per cent in 2023. Meanwhile, inflation is expected to average 7.3 per cent this year. 

“An ongoing audit of COVID-19 vaccine spending and the recently completed comprehensive audit of the fiscal year 2020-2021 spending with a focus on COVID-19 spending will improve transparency and enable follow-up by enforcement agencies and other stakeholders.”

Article By Sally Lizwa