The International Monetary Fund (IMF) Executive Board is set to delay its approval to disburse Ksh.28.7 billion ($244 million) loan disbursement to Kenya.
While the country had hoped to get the board’s nod to wire the funds which are part of a three-year loan program before June 30, the IMF Executive Board calendar to the end of the month does not include discussions on the third-tranche disbursement with Kenya.
This means the IMF Executive Board might only hold a meeting to back April 25 staff level agreement on the facility from only July 1 which will be after the lapse of the current 2021/22 fiscal year.
Delays in the disbursement are set to leave a marginal hole in financing the budget to June 30 even as the National Treasury works to acquire a syndicated loan to plug an even wider gap in the budget.
In April IMF staff and Kenyan authorities reached a staff level agreement in economic reviews marking the third formal assessment of the 38-month program that will see cumulative disbursements of Ksh.275 billion ($2.34 billion) to Kenya.
As of December, last year, the IMF had disbursed an estimated Ksh.114.3 billion ($976.2 million) to Kenya from the program.
The fresh disbursements which were expected before the turn of the fiscal year were to take total proceeds from the program to Ksh.141 billion ($1.2 billion) or just over half of the program’s ticket size.
Kenya inked the IMF program known as the Extended Fund Facility (EFF) and the Extended Credit Facility (ECF) in February last year.
The 38-month program is expected to run through to the 2023/2024 fiscal year.
The program is underpinned on anchors including fiscal reforms and the restructuring of ailing State-Owned Enterprises (SOEs).