IMF approves fresh Ksh.126 billion funding for Kenya

After an unusually long wait, the country has reached a staff level agreement with the International Monetary Fund (IMF), finally unlocking the disbursement of USD 976 million, or roughly Ksh.126.2 billion.

The deal is part of comprehensive policies and reforms needed to complete the reviews of Kenya’s Extended Fund Facility and Extended Credit Facility arrangements.

According to the IMF, an approval by its Executive Board on the second review of Kenya's Resilience and Sustainability Facility would ensure immediate access to USD 120 million, or roughly Ksh.15.5 billion.

Kenya is now in a position to pay its maturing foreign debt with the new financing, without exhausting its currency reserves.

As part of the conditions for the disbursement, the international lender has urged Kenya to ensure it puts in place corrective measures to safeguard debt sustainability.

The IMF is also calling for fiscal adjustment of the 2024/2025 budget to boost revenue raising measures.

This as National Treasury Cabinet Secretary Prof. Njuguna Ndung'u is set to present this year's budget before Parliament this Thursday.

This latest review is the seventh under a program which Kenya and IMF agreed upon in April 2021.

Overall, the program is expected to result in a tighter fiscal stance, enabling the country to reduce its debt vulnerabilities.