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Wednesday, March 22, 2023

IMF releases $407m to Kenya for budget support

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The International Monetary Fund (IMF) on Thursday said it had approved 43.86 billion shillings (about 407 million U.S. dollars) to Kenya for budget support.

The fund, which is the second part of Kenya’s 2.34-billion-dollar, three-year facility, marks the end of the first reviews of IMF’s arrangements with Kenya under the extended fund facility (EFF) and the extended credit facility (ECF)

Antoinette Sayeh, Deputy Managing Director of IMF, said in a statement that “the programme remains subject to notable risks, including from uncertainty about the path of the pandemic and potential pressures from the upcoming political calendar.’’

Saleh, however, said Kenya’s medium-term prospects remained positive since the government’s strong commitment to its economic program supported by the IMF had catalysed financing on favorable terms.

The IMF in April approved a three-year loan of 2.34 billion dollars, which would be released in tranches, and the first consisting of 307.5 million dollars was immediately released for budget support.

The latest flows take Kenya’s total disbursements from the programme to 714.5 million dollars.

The IMF said its arrangements were aimed at supporting Kenya’s programme to address debt vulnerabilities, support the response to the COVID-19 crisis and enhance governance.

It said Kenya was staging an economic recovery in spite of a recent third wave of COVID-19 infections.

Growth is now estimated to pick up to 6.3 per cent in 2021, the IMF predicted, warning that uncertainty and pandemic-related pressures would persist until COVID-19 vaccinations become widely available.

Saleh said the recent publication of comprehensive audits of COVID-19 spending, along with the forthcoming disclosure of beneficial ownership information of companies that are awarded procurement contracts, were important steps to strengthen fiscal transparency and accountability in the use of public resources.

He noted that effective follow-up by the appropriate institutions on the findings of the audits would be essential in the future.

Saleh said that Kenya’s economic programme aimed to reduce debt vulnerabilities through a multi-year fiscal consolidation effort centered on raising tax revenues and tightly controlling spending, and safeguarding resources to protect vulnerable groups.



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