The International Monetary Fund said Tuesday it reached an agreement with Kenyan authorities following the country's "peaceful completion of elections" which opens the door to the next installment of aid under an existing Sh284 billion ($2.3 billion loan) programme.
The programme is expected to end in April 2024. Kenya has so far received Sh188 billion ($1.5 billion) in credit from the lender.
In a statement on Tuesday following conclusion of a two-week visit by its staff to Kenya to assess the government’s progress on implementing conditions set under the Extended Fund Facility (EFF) and Extended Credit Facility (ECF) programme, IMF said after approval by the executive board and management team in the coming weeks, Kenya will access the new funding tranche.
IMF also said about 48 percent of the Sh52.7 billion loan will be used to cover external financing needs resulting from drought and challenging global financing conditions.
Mary Goodman and Tobias Rasmussen, the IMF’s heads of the delegation to Kenya said Kenya had made progress on addressing the fiscal challenges by cutting the budget deficit and with planned spending cuts by the new government.
“The authorities are taking forceful measures to further reduce the fiscal deficit. Fuel subsidies were mostly eliminated in September and the variable cost adjustments in electricity prices were reinstated.
"In addition, the new government is in the process of formulating a supplementary budget for FY2022/23 that will institute significant spending cuts with a view to modestly reducing the deficit from the previously programmed level of 5.9 percent of GDP while increasing allocations for drought interventions,” they said.
