Ruto on Verge of Securing Ksh77 Billion Loan From IMF
The government is on the brink of securing Ksh77 billion ($600 million) from the International Monetary Fund (IMF).
During the Monetary Policy Meeting (MPC) on October 9, Central Bank of Kenya (CBK) Governor Kamau Thugge announced that the government is nearing a deal with the Bretton Woods Institution for this significant funding.
Thugge highlighted that discussions between Kenya and the IMF are progressing positively, with expectations that the multilateral lender will release the funds before the year concludes.
According to the CBK Governor, the loan will assist in addressing the central bank’s current account deficit by increasing Kenya’s foreign exchange reserves to Ksh254 billion.
While detailing the agreement, Thugge mentioned that President William Ruto’s administration has committed to making fiscal adjustments as advised by the Fund, thus facilitating the loan disbursement.
He stated, “We have been engaged in discussions with the IMF, combining the seventh and eighth reviews, and we are making substantial progress. We are in the final stages of the agreement.”
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“The fiscal framework has been established, and the fiscal deficit has also been addressed. We project a total reserve buildup of $1.9 billion for the year, and I can confirm that negotiations are advancing well. We anticipate the disbursement will occur before the end of the calendar year.”
This development follows a request from the Kenyan Government for the multilateral lender to investigate corruption and governance issues within its administration that are hindering the country’s revenue collection.
Kenya’s request for a corruption and governance diagnostic was expected to unlock Ksh474 billion ($3.6 billion) in IMF funding that was contingent on completing the seventh loan review, with the amount slated for phased disbursement.
IMF spokesperson Julie Kozack emphasized during a press briefing in Washington DC, stating, “We have previously encouraged the Kenyan authorities and will continue to urge them to seek a governance diagnostic.”
In June of this year, Kenya reached a staff-level agreement with the IMF for the disbursement of Ksh77 billion as the first phase of the loan approval. However, the lender suspended this disbursement following protests against the defunct Finance Bill 2024, which proposed several tax measures.
President Ruto’s withdrawal of this legislation led the IMF to suspend the loan approval, citing Kenya’s failure to adhere to the previously established agreement regarding adjustments to the country’s fiscal and monetary policies.
Ruto on Verge of Securing Ksh77 Billion Loan From IMF
