IMF
The International Monetary Fund (IMF) has revealed that the Kenyan government is seeking a new loan program.
In a statement, the IMF said it has received a formal request from the Kenyan authorities when a team from the international body visited the country.
IMF announced that it had agreed with the government to end the current funding program and engage in a new one.
“The Kenyan authorities and IMF staff have reached an understanding that the ninth review under the current Extended Fund Facility and Extended Credit Facility programs will not proceed.
“The IMF has received a formal request for a new program from the Kenyan authorities and will engage with them going forward,” the statement read in part.
The combined ECF/EFF facility, which is set to expire next month, is worth a total of $3.6 billion (Sh465 billion).
Under the current lending program, a total of $3.12 billion (Sh403 billion) had been approved for disbursement by the end of October last year, meaning that the ninth review could have unlocked a final disbursement of about $480 million (Sh62.03 billion).
Kenya has been one of the largest beneficiaries of IMF programs in recent years. The funds have been used to supplement tax revenues to finance various government programs in the budget.
Kenya’s economic challenges are largely due to a decade-long borrowing binge that has left the country struggling with ballooning debt repayments.
The government has been scrambling to secure new sources of financing while boosting domestic revenue collection to meet spending needs.
As of June 2023, Kenya’s total debt-to-GDP ratio stood at 65.7%, well above the 55% threshold considered sustainable.
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