The International Monetary Fund (IMF) Executive Board completed its fifth review of the 38-month Extended Fund Facility (EFF) and Extended Credit Facility (ECF) financing for Kenya
The review allows for an immediate disbursement of US$415.4 million. This includes US$110.3 million from an augmentation of access.
The Board also approved a 20-month arrangement under the Resilience and Sustainability Facility (RSF) for US$551.4 million to support Kenya’s efforts to build resilience to climate change and catalyze private climate financing.
“The approval of the FY2023/24 Budget and 2023 Finance Act are crucial steps to support ongoing consolidation efforts to reduce debt vulnerabilities while protecting social and development expenditures,” Ms Antoinette Sayeh, Deputy Managing Director and Acting Chair stated.
“However, recent challenges in resource mobilization and elevated uncertainty call for contingency plans that can be quickly deployed to ringfence fiscal performance going forward. Tighter financing conditions also require a prudent debt policy and continued efforts to prioritize concessional loans.”
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International Monetary Fund (IMF) EFF and ECF Financing Programme |
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| Date | Amount Received
(USD mn) |
Amount Received
(Kshs bn, 1 USD= Kshs 141.6) |
| Apr-21 | 307.5 | 43.5 |
| Jun-21 | 407.0 | 57.6 |
| Dec-21 | 258.1 | 36.5 |
| Jul-22 | 235.6 | 33.4 |
| Nov-22 | 433.0 | 61.3 |
| Jul-23 | 415.4 | 58.8 |
| Total Amount Received | 2,056.6 | 291.2 |
| Amount Pending | 283.4 | 40.1 |
“The disbursement is expected to shore up and increase the country’s foreign exchange reserves, which have been under pressure during the first half of the year, and consequently help support Kenya shilling from further depreciation, which has depreciated by 14.9% year to date, “Cytonn Investments Commented.
“Additionally, the loan disbursement will support the country’s Medium Term Debt Strategy, which aims to optimize the use of concessional loans and reduce the use of costly commercial loans, and the new administration’s plans to cut public expenditure to reduce the budget deficit.”