After an extended period of negotiations, Kenya has finally reached a staff level agreement with the International Monetary Fund (IMF), paving the way for the disbursement of USD 976 million (Ksh.126.2 billion). This agreement is part of Kenya’s Extended Fund Facility and Extended Credit Facility arrangements, crucial for the country’s economic reform agenda.
The IMF’s approval of the second review of Kenya’s Resilience and Sustainability Facility will provide immediate access to USD 120 million (Ksh.15.5 billion), further supporting Kenya’s fiscal stability and economic resilience.
With the disbursement, Kenya is now able to pay its maturing foreign debt obligations while preserving its currency reserves, ensuring stability in the foreign exchange market.
As a condition for the disbursement, the IMF has emphasized the importance of Kenya implementing corrective measures to safeguard debt sustainability. This includes fiscal adjustments in the 2024/2025 budget to enhance revenue collection.
National Treasury Cabinet Secretary Prof. Njuguna Ndung’u is scheduled to present this year’s budget to Parliament, aligning with the IMF’s recommendations for fiscal discipline and sustainable economic management.
This agreement marks the seventh review under the program established between Kenya and the IMF in April 2021. The overall program aims to strengthen Kenya’s fiscal stance, reduce debt vulnerabilities, and promote sustainable economic growth.
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