Kenya is looking forward to receiving Ksh.34.5 billion next week from the International Monetary Fund (IMF). The disbursement is scheduled to happen in bits as the first batch consisting of a $2.4 billion 38-month program with the Bretton Woods institution.
The IMF Executive Board is anticipated to hold a meeting this Friday in regards to the approval of the program and subsequent disbursements before its annual spring meetings that will commence on Monday.
In a post-Monetary Policy Committee (MPC) news conference on Tuesday, CBK Governor Patrick Njoroge declared, “We expect this will be approved on Friday and the consequential disbursement will follow early next week.”
A staff-level agreement between Kenyan fiscal and monetary authorities with the IMF on the disbursement of a Ksh.263.4 billion ($2.4 billion) loan over three years was reached on February 15.
“The program will support the next phase of the country’s COVID-19 response and the authorities’ plans for a strong multi-year effort to stabilize and begin reducing debt levels relative to GDP, laying the ground for durable and inclusive growth over the years to come,” IMF staffer, Mary Goodman pointed out. Mary Goodman leads the mission to Kenya last month.
According to Dr Njoroge, The IMF board is scheduled to meet on April 2 probably to approve Kenya’s loan request of $2.4 billion which will facilitate the country’s economy during the pandemic.
“The bottom line is that the program will support our COVID-19 response and budget support. It anchors fiscal consolidation through revenue-driven policies which minimize debt vulnerabilities. This is the key element of the program,” Njoroge remarked.
The combined 38-month program negotiations between December 9 to 17, 2020, and from February 4 to 15 were held virtually. Mary Goodman led the IMF staff in the missions, all under the Extended Fund Facility (EFF) and Extended Credit Facility (ECF) arrangements.
If Kenya receives the funds, it will mark a total of Sh340 billion received from the Bretton Woods institution since coronavirus hit Kenya in March 2020.
The IMF in May 2020 gave Kenya Sh79 billion through the Rapid Credit Facility to aid deal with the socio-economic effects of the pandemic. According to IMF last month, Kenya spent nearly $2.4 billion by end of last year to contain the social-economic pressures of the coronavirus pandemic.
Kenya is expected to pay Sh67.3 billion in interest to private investors inclusive of Eurobond holders and commercial banks before the end of this financial year.
By Everlyne Bosibori