The IMF has granted approval for nearly $1bn in new funding for Kenya, providing much-needed relief for the country’s government finances. The IMF’s executive board completed the fifth reviews under Kenya’s Extended Fund Facility and Extended Credit Facility, resulting in an immediate disbursement of almost $415.4 million. Additionally, the arrangements have been extended from 38 to 48 months, granting Kenya more time to implement crucial reforms.
Furthermore, the IMF approved a new 20-month arrangement under its Resilience and Sustainability programme, worth around $551.4 million, to support Kenya’s climate resilience efforts. Despite facing the worst drought in decades and a challenging external environment, Kenya has made significant progress in implementing economic reforms.
IMF Deputy Managing Director Antoinette Sayeh said these actions would enable Kenyan authorities to address challenges, maintain market confidence, promote economic growth, and advance ongoing reforms. The approval of Kenya’s fiscal 2023-2024 budget and the 2023 Finance Act were highlighted as crucial steps to support consolidation efforts, reduce debt vulnerabilities, and safeguard social and development expenditures.
To navigate tighter financing conditions, a prudent debt policy and continued prioritisation of concessional loans are essential, Sayeh noted.
