The International Monetary Fund and Kenya have reached agreement on relieving the East African country of its financial troubles through a staff-level 3-year deal worth $2.4bn.
The IMF said the funding will be a part of the Extended Credit Facility and Extended Fund Facility given to Kenya in the past and will be subject to the approval of the management of the body.
In a statement by the IMF, it said the programme will support Kenya’s COVID-19 response and its efforts to place the nation’s economy back on track after a contraction in its GDP.
Kenya’s GDP contracted in 2020 by 0.1% and the IMF has said it expects the nation’s economy to bounce back in 2021.
The country is abandoning its biggest projects to clear its increasing commercial debts and has also cut revenue allocation to improve its economic returns.
Kenya’s budget deficits have also increased, as the country recovers from its COVID-19 struggles.
The IMF finance package is expected to help Kenya stabilise its flying debt which is 65% of its current budget.
The Kenyan government has also said it will raise its debt ceiling to accommodate fiscal deficits to help its financial future.