IMF okays immediate disbursement of Sh29.2bn to Kenya

NAIROBI, Kenya, Dec 18 – The International Monetary Fund (IMF) Executive Board has approved the immediate disbursement of Sh29.2 Billion to Kenya under the Extended Credit Facility, in a move meant to support Kenya’s program to address debt vulnerabilities and aid in the response to the COVID-19 pandemic.

The board, following a consultative meeting on Friday, agreed on the disbursement of the money, bringing the total amount disbursed to the country for budget support to Sh100 billion.

“The Executive Board completed the 2021 Article IV Consultation and the Second reviews of the 38-month Extended Arrangement under the Extended Fund Facility (EFF) and 38-month arrangement under Extended Credit Facility (ECF) for Kenya. The board has agreed to the immediate disbursement of USD258.1mn (Sh.29.2Bn) to Kenya,” IMF said in a statement.

IMF had approved a USD2.34bn (Sh266bn) aid package for Kenya in April 2021 to be disbursed over 38 months, under the Extended Credit Facility and the Extended Fund facility.

IMF Deputy Managing Director and Acting Chairperson of the Executive Board, Antoinette Sayeh, said the approval was due to the robust economic growth that Kenya showcased in the financial year 2020/2021.

Sayeh said the board believed that the additional support would further aid in making advances to the country’s structural reform and anti-corruption agencies.

She further noted that the funding is expected to strengthen domestic revenue mobilization and expand the country’s ongoing COVID-19 vaccination drive.

“The Kenyan authorities remain firmly committed to their economic program in a challenging environment. Some additional fiscal space is needed in FY 21/22 for emergency spending to face the drought in the north and emerging security needs; the planned supplementary budget should also provide resources for expanding state-owned enterprises (SOEs) support, in line with program design,” Sayeh said.

She added that the Kenyan government should strengthen fiscal transparency in order to account for the utilization of the additional funds.

Sayeh noted that more effort should be put to address legal impediments in order to begin publishing beneficial ownership information for awarded public tenders in early 2022.

“Further strengthening fiscal transparency and governance requires more proactive efforts. The authorities should proceed with planned audits of COVID-19 spending, and promptly act to follow up on previous audits. Kenya’s medium-term prospects remain positive, and the authorities’ continued commitment to their economic program is essential to maintain macroeconomic balance, while ensuring a more sustainable, greener, and inclusive growth,” she added.