The IMF Executive Board completed today (Monday, Dec. 19, 2022) the Fourth reviews of the Extended Fund Facility and Extended Credit Facility arrangements with Kenya, providing the country with access to about $447.9 million.
“Kenya secured about $450 million today from the IMF to help the country remain resilient in the face of global shocks and drought. The IMF Board's action includes about $215 million in additional low-cost financing, bringing the size of Kenya's IMF program to about $2.4 billion,” said Mary Goodman, Kenya’s Mission Chief at the IMF.
The EFF/ECF arrangements (approved on April 2, 2021, see Press Release 21/98), aim to support Kenya’s program to address debt vulnerabilities and the authorities’ response to the COVID-19 pandemic and global shocks, and to enhance governance and broader economic reforms.
“The program is delivering results; increased tax revenue and careful spending are stabilizing debt as a share of GDP well below levels originally projected. Kenya accomplished this because of strong commitment from the Ruto administration facing pending bills last year and unbudgeted spending from early this year. They took bold action. They fully phased out petrol subsidies, and they're finding cost savings to hold this year's deficit below the budgeted level,” added Goodman.
However, Kenya’s structural reform agenda is advancing, albeit with some delays.
“Challenges remain, though. Kenya still faces high global prices for food and fertilizer, and the US dollar has been very strong against most global currencies. In this difficult period, monetary policy and exchange rate flexibility have an increased role to play. Steps to revitalize the foreign exchange market are also important and will help support Kenya's foreign exchange reserves. The IMF review has also seen progress on governance. New details on the owners of firms that win government contracts are being posted on the public procurement website. More work still lies ahead, though, to strengthen Kenya's anti-money laundering framework and reform state owned enterprises. The economy remains resilient in the face of global challenges, and the IMF welcomes our continued partnership with Kenya,” explained Goodman.