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Details of IMF's new Sh140B loan for Kenya

IMF Deputy MD Antoinette Sayeh noted that Kenya's economy has been resilient despite the worst drought in many decades and a difficult external environment.

President William Ruto signs a document at State House

The International Monetary Fund has approved a loan of almost $1 billion (Sh140 billion) for Kenya to support economic recovery and mitigation against climate change.

The loans were approved after the IMF executive board completed the fifth review of the Extended Fund Facility (EFF) and Extended Credit Facility (ECF) arrangements for Kenya.

The board’s decision paves the way for immediate disbursement of $415.4 million (Sh58.8 billion).

Additionally, the board approved an extension of the EFF/ECF arrangements from 38 months to 48 months, allowing more time for Kenya to implement its reform agenda. This extension will last until April 1, 2025.

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Another loan of $551.4 million (Sh78 billion) was also approved, bringing the total loan approval in the 5th review to close to $1 billion (Sh140 billion).

The Executive Board also approved Kenya’s request for an arrangement under the Resilience and Sustainability Facility (RSF) of $551.4 million to support Kenya’s ambitious efforts to build resilience to climate change,” a statement from the IMF read in part.

At the conclusion of the Executive Board’s discussion, IMF Deputy MD Antoinette Sayeh noted that Kenya's economy has been resilient despite the worst drought in many decades and a difficult external environment.

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She also praised President William Ruto’s maiden Finance Act 2023 and the Budget Policy Statement for the financial year 2023/24.

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.

However, recent challenges in resource mobilization and elevated uncertainty call for contingency plans that can be quickly deployed to ringfence fiscal performance going forward,” she said.

The IMF boss added that CBK should also continue taking appropriate steps to strengthen its reserves position and deepen the foreign exchange market while allowing exchange rate flexibility as a shock absorber.

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