Kenya is on the verge of unlocking a substantial loan from the International Monetary Fund (IMF) by the end of this year, according to a statement by Kamau Thugge, the Governor of the Central Bank of Kenya governor Kamau Thugge.
In a press briefing on Wednesday, the CBK governor said that Kenya is in talks with IMF about combining the 7th and 8th reviews of its funding programme.
In early June this year, the IMF reached a staff-level agreement with Kenya on the seventh review of its program. However, the review remains unapproved by the IMF’s executive board following the government’s move to halt the proposed tax hikes and cut spending in June in response to the public protests.
“ “The fiscal framework has been agreed with the fiscal deficit at 4.3 percent of GDP, and so in our projections of a US$1.9 billion accumulation in reserves, we have assumed a disbursement from the IMF before the end of December 2024,” Kamau Thugge stated.
If approved, the twin disbursement would see Kenya receive about Ksh126 billion ($976 million) from the program, which closes in April 2025.
In 2021, the IMF approved a four-year-credit facility for Kenya to aid in addressing challenges emerging from the COVID-19 pandemic and debt vulnerabilities. Subsequently, in January 2024, Kenya received an additional $941 million under the program, taking the total IMF funding to $3.9 billion (Sh302.6 billion)
Earlier this month, the Kenyan government requested the Fund to conduct a review of corruption and governance issues. The submission to governance diagnostic came after major stakeholders at the IMF urged Kenya to request the review as part of a push to unlock lending.
