IMF agrees $236m for Kenya, urges to keep reform program

Bloomberg

The International Monetary Fund (IMF) approved the disbursement of a $235.6 million loan to Kenya as the East African nation met the lender’s targets and made progress in addressing debt vulnerabilities.
The approval brings the IMF’s total disbursements to Kenya to $1.21 billion, out of a total of about $2.34 billion available under a 38-month program approved in April 2021, the Washington-based lender said in an emailed statement. The financing was approved after the fund completed its latest review.
“Despite the resilient economic recovery, the program remains subject to downside risks, including from deeper disruptions from the war in Ukraine, unsettled global market conditions, and an increase of food insecurity,” the IMF said.
“Continued steadfast commitment to prudent policies and advancing structural
reforms remains essential
to maintain macroeconomic
stability and safeguard
Kenya’s positive medium-term prospects,” it said.
Kenya met all the performance targets for the period through December, but requested waivers due to “the timing of the review” as final data to evaluate the end-June 2022 quantitative criteria was not yet available. Those benchmarks will be assessed in the next review, the fund said.
Some of the delays in the program’s goals include tackling financial weakness at state-owned companies Kenya Airways Plc and Kenya Power and Lighting Co, the fund said.
The government is also yet to conclude an audit of Covid-19 related spending and publication of the ownership of
companies awarded public contracts, a step the IMF said is required to enhance transparency in governance.
Kenya is at high risk of debt distress and reducing vulnerabilities is a central goal of the IMF program. The country also plans to replace the current 10 trillion-shilling ($84.4 billion) debt ceiling with an anchor based on gross domestic product, the IMF said. The lender estimates economic growth in Kenya will slow to 5.7% this year, after expanding 7.5% in 2021, the fastest pace in more than a decade.