IMF, Kenya Reach Staff-Level Agreement on KSh 250bn Covid Relief Loan

Kenya will receive emergency aid totalling USD 410 million to support its program to address debt vulnerabilities, the International Monetary Fund (IMF) said on Wednesday.

Kenya and the International Monetary Fund have reached a staff-level agreement on the disbursement of $2.4 billion loan facility.

The agreement in principle will see the disbursement of funds from the IMF Rapid Credit Facility (RCF) and the Extended Fund Facility (EFF) over the next 38 months to support the countries COVID-19 response.

“The staff-level agreement is subject to IMF management approval and Executive Board consideration, which is expected in the coming weeks.”

The latest $2.4 billion funds are in addition to the $739 million that the Fund’s Executive Board approved in 2020, to be drawn under the Rapid Credit Facility (RCF) in response to the COVID-19 pandemic.

The RCF provides rapid concessional financial assistance with limited conditionality to low-income countries (LICs) facing an urgent balance of payments needs.

“Part of the funds will go towards some of the key initiatives under the budget that could enhance economic and export diversification. This should help ease some of the financing pressures that would have otherwise been plugged through debt, “NCBA Market Research Notes.

“Moreover, the improving character and quality of overall public debt may also help ease the country’s debt sustainability concerns.”