The International Monetary Fund (IMF) has given its approval for a credit facility of US$941 million (Sh150 billion) to Kenya.
This endorsement follows the conclusion of a consultation meeting held by the IMF Executive Board with Kenya, during which they scrutinized the agreement on Wednesday.
The Board’s decision enables the immediate disbursement of approximately US$624.5 million (Sh 99.6 billion) under the Extended Fund Facility (EFF) and the Extended Credit Facility (ECF) arrangements.
The IMF also specified that the decision includes an immediate disbursement of about US$60.2 million under the Resilience and Sustainability Facility (RSF) arrangement.
Initially approved in April 2021, the EFF/ECF arrangement was extended by 10 months in July 2023, stretching its validity until April 2025.
The IMF noted that Kenya’s economy is demonstrating resilience amid a challenging global environment, recovering from the impact of the COVID-19 pandemic and a severe two-year drought.
According to the IMF, the Kenyan economy exhibited a 5.6 percent expansion in the first nine months of 2023.
This growth was primarily driven by a robust recovery in the agricultural sector, contributing to a reduction in both overall and food inflation.
However, non-agricultural growth experienced a slowdown due to more stringent policies. On a positive note, exports and remittances demonstrated resilience.
While foreign exchange reserves are considered adequate, there was a decline in the second half of 2023, attributed to debt service payments and limited external financing inflows.
“Kenya’s growth remained resilient in the face of increasing external and domestic challenges. The EFF/ECF and RSF arrangements continue to support the authorities’ efforts to sustain macroeconomic stability, strengthen policy frameworks, withstand external shocks, push forward key reforms, and promote more inclusive and green growth.” Antoinette Sayeh, Deputy Managing Director, and Acting Chair said.
