- Under the new loan details, there will be an immediate disbursement of Sh58.57 billion.
- IMF said Kenya has met the conditions for continued lending.
Image: / PCS
The International Monetary Fund's executive board has approved Sh141.4 billion new loan for Kenya after meeting conditions for continued lending.
The funding to President William Ruto's administration is meant to ease pressure on the government as it embarks on reforming the economy and confronting challenges posed by climate change.
The IMF said the board on Monday completed the fifth reviews under Kenya's Extended Fund Facility and Extended Credit Facility.
Under the new loan details, there will be an immediate disbursement of Sh58.57 billion.
At the same time, the board revised Kenya's initial plan to repay the loan in 38 months and extended those arrangements to 48 months to allow for more time to implement reforms.
The government had in February 2021 agreed to a 38 month IMF programme to reduce debt vulnerabilities.
In May this was extended by 10 months.
The IMF also approved a new 20-month arrangement under the IMF's Resilience and Sustainability worth Sh77.96 billion that will support Kenya's climate resilience efforts.
The IMF said Kenya had made good progress in implementing economic reforms despite facing the worst drought in decades, as well as a challenging external environment.
IMF Deputy Managing Directory Antoinette Sayeh said Monday's actions would allow Kenyan authorities to continue to address such challenges, sustain market confidence, promote growth, and advance ongoing reforms.
''Kenya got a $415 million disbursement under the Extended Fund Facility and Expanded Credit Facility, programs designed to shore up its economy and boost its foreign exchange reserves, following a fifth review. It also got $551 million as part of the Resilience and Sustainability Facility to “support Kenya’s ambitious efforts to build resilience to climate change,” the IMF said in a statement.
She said approval of Kenya's fiscal 2023-2024 budget and the 2023 Finance Act 2023, were "crucial steps" needed to support ongoing consolidation efforts.
The steps, she added would reduce debt vulnerabilities while protecting social and development expenditures.
Tighter financing conditions also required a "prudent debt policy" and continued efforts to prioritize concessional loans, she said.
President Ruto's administration has vowed to improved finances by raising more revenue and slowing down on borrowing.
Kenya's public debt stood at Sh9.6 3 trillion in April with debt servicing taking up more than half of the tax income.