Kenya, a country in East Africa, and the International Monetary Fund (IMF), a major financial agency of the United Nations, have reached a staff-level agreement, unlocking $938 million in transfer.
The agreement has boosted the current lending programme by $938 million before a eurobond repayment due in June. Haimanot Teferra, the International Monetary Fund (IMF) Mission to Kenya, said, “The tightening global financing conditions for frontier economies and global geopolitical tensions are compounding the challenges.”
What to expect?
Under the staff-level agreement, Kenya will get immediate access to a $682.3 million tranche. The agreement needs the approval of the Washington-based fund’s executive board. With the approval, Kenya will have access to a total of $4.43 billion.
Earlier this month, an IMF team arrived in Nairobi, the capital of Kenya, to conduct the sixth review of a lending programme approved in April 2021. The programme was first boosted in May by an extra $1 billion.
In December 2022, the IMF approved the disbursement of $447.39 million to Kenya after a review of its lending programme. Kenya had access to the amount under the Resilience and Sustainability Facility, designed to improve climate change resilience and adaptation.
In July this year, the IMF approved an additional $1 Billion for Kenya after its latest loan review. The African country got a $415 million disbursement under the Extended Fund Facility and Expanded Credit Facility.
Kenya’s economy burdened by a debt
Kenya’s economy is burdened by a debt and a sharp devaluation of its currency Kenyan Shilling against the United States Dollar. William Ruto, the president of Kenya, aims to reduce Kenya’s debt. The government of President William Ruto has planned a budget that can raise 289 billion shillings to supplement the 3.6 trillion shillings for 2023-24.
The Kenyan government also aims to reduce the deficit by introducing new taxes on cosmetics, fuel, and gambling.