The International Monetary Fund (IMF) has approved the release of a Ksh.28 billion ($235.6 million) loan to Kenya.
The new disbursement represents the third tranche of a 38-month budget support program, inked in April last year and which seeks to address Kenya’s debt vulnerabilities.
The approval takes cumulative issuances under the three year program to Ksh.143 billion ($1.208 billion).
In its concluding statement following the third reviews of the arrangement, the IMF stated Kenya was keeping up with the program’s structural reform requirements despite notable delays in execution.
“Kenya’s structural reform agenda, focused on improving governance, has advanced despite some delays. Oversight of State-owned enterprises (SOEs) is being reinforced. New tender documents will allow achieving the long-standing goal of publishing beneficial ownership information of successful bidders for public procurements,” the IMF said in a statement on Monday night.
“An ongoing audit of COVID-19 vaccine spending and the recently completed comprehensive audit of the fiscal year 2020-2021 spending with a focus on COVID-19 spending will improve transparency and enable follow-up by enforcement agencies and other stakeholders.”
The IMF states Kenya’s medium term outlook remains favorable despite near term risks represented by rising commodity prices and frought in semi-arid regions.
Inflation is expected to stay above the government’s upper target of 7.5 per cent before easing back to the target band in early 2023.
The multi-lateral lender nevertheless says a strong performance in tax collection for the 2021-2022 fiscal year has created fiscal spaceto temporarily cushion the impact of rising fuel prices through the fuel subsidy while still keeping withing the loan-program fiscal targets.
The IMF has retained Kenya’s GDP growth projection at 5.7 per cent for 2022 and 5.3 per cent in 2023.
Inflation is meanwhile expected to average 7.3 per cent this year.