The government is expecting upwards of Sh250 billion in funding over the next three months, including loans from the World Bank and the International Monetary Fund (IMF).
This, according to the Central Bank of Kenya (CBK), will ease the pressure on foreign currency reserves that stood at $6.49 billion by March 28, or just 3.6 months of import cover.
CBK Governor Patrick Njoroge indicated that among inflows the government is currently expecting is a $1 billion (about Sh132 billion) from the World Bank, which will hit the accounts this month.
“We have had a period when we’ve not been receiving significant inflows to the government, which is the way we accumulate our reserves and now we definitely expect these inflows to be coming in now that the government has sorted whatever needed to be sorted for the inflows to come in,” he told a news briefing on Thursday.
“We are expecting about $200 million (Sh26.47 billion) in very short order, we are expecting World Bank disbursement, something in the order of $1 billion sometime by the end of April. We are expecting some more $400 million (Sh53 billion) along that same timeline,” Dr Njoroge said.
The three inflows the government is expecting from different financiers total about Sh211 billion, excluding funding that will be coming from the IMF, which the CBK says will be higher than rates Kenya has been receiving since the beginning of the budgetary support and institutional reform programme two years ago.
The CBK governor spoke to alleviate fears that Kenya’s forex reserves, which fell from $8.8 billion by end of 2021 to $7.38 billion in 2022 and further to $6.49 billion by March 28, kept deteriorating.
He said a government-to-government deal Kenya entered into recently, allowing the importation of oil products without an immediate demand for settlement in dollars, would eliminate the pressure that has been in the market for the greenback.
Dr Njoroge also stated that the government was hoping to receive the next round of IMF’s tranche of disbursement under the ongoing Extended Fund Facility and Extended Credit Facility after the fifth review in June.
“We are also expecting IMF money as soon as they have come and done their review, which should be by end of June. The number we had for the IMF will be scaled up for several reasons, one of which is that the IMF has actually changed its policy temporarily, allowing for a one-year period when countries can have higher access,” the Dr Njoroge stated.
This means that Kenya will get more cash from the multilateral lender this year than it has been receiving through the programme period since April 2021, in the temporary policy that is applicable for a year.
“This is a reflection of their acceptance that they are a global safety net and things are quite tight for emerging markets and frontier economies such as ourselves,” the governor said.
Dr Njoroge also made the assurance that the government will be ready to settle a Eurobond loan that is due next year.
“There has been the question about the Eurobond, that it’s maturing in June 2024 and (on) this the government has mentioned that it is working on the solutions for making sure that that will be repaid. There shouldn’t be any concern,” he said.
