In anticipation of IMF Board approval, the International Monetary Fund (IMF) and Kenya have reached a staff-level agreement for the disbursement of Sh56.58 billion ($410 million) for budgetary support.
The loan is anticipated to be approved by the IMF’s management and Executive Board in July, enabling the prompt delivery of funds to the National Treasury.
After the loan is disbursed, Kenya will have received a total of $2.017 billion (Sh278.34 billion) from the IMF as part of the $2.43 billion (Sh335.34 billion) programme.
Also, the overall IMF commitment under these agreements would be SDR2.633 billion (about $3.52 billion or Sh485.76 billion) with the EFF/ECF augmentations and the Resilience and Sustainability Facility (RSF) support.
During the fifth review of the 38-month Extended Fund Facility (EFF) and Extended Credit Facility (ECF), where Kenya additionally asks for access to more funds under the RSF and additional augmentation under the EFF/ECF, the staff-level agreement is made.
According to the lender, the RSF will support macroeconomic stability and long-term structural climate resilience and adaptation as the economy shifts toward renewable energy.
The IMF has also approved the extension of the program’s term by 10 months to April 2025 “to give ample time for accomplishing the programme objectives” and increased access under the EFF/ECF by a total of 75 percent of the quota (SDR407.1 million, or $544.3 million (Sh75.11 billion)).
Also, the lender has approved a new 20-month RSF arrangement that will operate concurrently with the EFF/ECF arrangements until April 2025 and allow access to 75% of the quota as well.
The study comes after an IMF staff delegation led by Haimanot Teferra visited Nairobi from May 9 to May 22.
“The IMF team and the Kenyan authorities have reached staff-level agreement on the fifth review of Kenya’s economic programme under the Extended Fund Facility (EFF) and Extended Credit Facility (ECF) arrangements,” said Ms Teferra.
“The agreement is subject to IMF management approval and consideration by the Executive Board, which are expected in July. Upon completion of the fifth review by the IMF Executive Board, Kenya would have immediate access to SDR306.7 million (about US$410 million), including from the augmentation of access under the ECF/EFF,” she said.
The IMF highlighted that despite the Kenyan economy being stressed by a difficult environment, the country’s private sector has typically remained resilient.
According to the Economic Survey 2023 published this month by the Kenya National Bureau of Statistics, the growth of Kenya’s economy slowed down to 4.8 percent in 2022 from a revised rise of 7.6 percent in 2021. (KNBS).
