IMF approves 52.8B loan for Kenya.
IMF approves 52.8B loan for Kenya; In a statement, The International monetary fund announced the staff-level agreement to disburse $433 million (Sh52.8 billion) to Kenya as part of a $2.34 billion loan approved in May last year.
Mary Goodman and Tobias stated,”The agreement is subject to the approval of IMF management and the Executive Board in the coming weeks.”
According to the International Monetary fund, Kenya would have access to SDR 336.54 million (equivalent to about $433 million), bringing the total IMF loans to Kenya to about $1,548 million (Sh187 billion).
IMF stated that Kenya has a way of bouncing back regardless of the harsh environment they are facing.
IMF said,”Food insecurity has increased on a severe drought in parts of the country. Higher food and energy prices have pushed up inflation and pressured the external position.”
“There has been good progress on fiscal adjustment needed to address debt vulnerabilities through pressures remain elevated,” IMF added.
The International lender further revealed that the overall deficit on a cash basis declined from 8.2 per cent of GDP in FY2020/21 to 6.2 per cent of GDP in FY2021/22.
An incident that was effected by strong tax revenue, which increased from 12.6 to 13.7 per cent of GDP.
The lender also stated that the subsidies and lack of funds contributed to 0.7 per cent of GDP in unpaid obligations that were carried over to Fiscal year 2022/23.
IMF said,”Significant unbudgeted spending in the early months of this fiscal year, much of it for fuel subsidies, pose an additional challenge.”
However, for Kenya to access the loan, it must bring to light its structural and governance reforms.