The International Monetary Fund (IMF) has approved the disbursement of Sh58.8 billion ($415.4 million) to Kenya in its latest review of its multi-year programme, which runs until April 2025.
The new disbursement is expected to raise the multilateral lender’s cumulative funding to the country under the programme to Sh288.6 billion ($2.04 billion) since its approval in April 2021.
The Washington-based institution has additionally approved the disbursement of Sh78 billion ($551.4 million) under the resilience and sustainability facility (RSF), which is expected to support the country’s efforts in combating the effects of climate change.
Disbursements under the RSF are expected to run alongside the extended fund facility and the extended credit facility arrangements (EFF/ECF), which have now been extended to 48 months until April 2025.
The IMF says the government has made progress in implementing economic reforms which underpin the multi-year programme despite headwinds, including drought and a challenging external environment.
The lender says the programme continues to support the government in addressing economic stability.
“While the medium-term outlook remains positive, in the near-term, global headwinds continue to have a bearing on economic activity, amid elevated inflationary pressures. The authorities’ commitment to robust policies to sustain reforms that promote resilient and inclusive growth will support Kenya’s positive medium-term prospects,” noted Antoinette Sayeh, the deputy Managing Director and acting chair of the IMF.
The multilateral lender says the passage of the 2023/24 budget and the 2023 Finance Act are critical steps in supporting ongoing fiscal consolidation efforts to reduce debt vulnerabilities.
The fund has, nevertheless, called for sustained structural reforms, including the strengthening of public financial management systems and management of fiscal risks from State-owned enterprises.
Reforms undertaken through the RSF programme are meanwhile expected to improve Kenya’s readiness to address climate-related challenges.