The International Monetary Fund (IMF) has allocated another USD 433million (Sh52.7billion) for Kenya as part of a loan facility approved in 2021.
Kenya will receive the money after the approval by IMF’s senior management, with the facility meant to help the country recover from the recessive electioneering period and the ravaging drought.
“Upon completion of the Executive Board review, Kenya will have access to USD433 million, bringing the total IMF financial support under these arrangements to US$1,548 million,” said IMF in a statement.
“The Kenyan economy has been resilient in the face of a challenging environment. Food insecurity has increased on severe drought in parts of the country. Higher food and energy prices have pushed up inflation and pressured the external position,”
IMF also noted that Kenya needed to address its debt vulnerabilities occasioned by pressures in the economy but expressed optimism that the economy would grow by 5.3 percent in 2023.
“There has been good progress on fiscal adjustment needed to address debt vulnerabilities though pressures remain elevated. The overall deficit on cash basis declined from 8.2 per cent of GDP in FY2020/21 to 6.2 percent of GDP in FY2021/22,” said IMF.
“The lack of funds contributed to 0.7 per cent of GDP in unpaid obligations that were carried over to FY2022/23. Significant unbudgeted spending in the early months of this fiscal year, much of it for fuel subsidies, pose an additional challenge,”
The multilateral lender further commended the country’s governance policy adjustments currently taking place, saying they will help address the concerns arising from economic progress.
IMF also asked Kenya to initiate reforms on public contracts, such as publishing them to ensure transparency and accountability.
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