IMF Boosts Kenya’s Financial Lifeline by Ksh98 Billion
The expansion of the financing program by Ksh98 billion by the International Monetary Fund (IMF) has exacerbated Kenya’s liquidity crisis.
Reuters reports that this was announced on Tuesday by the primary economic adviser to President William Ruto.
Ndii applauded the action, noting its punctual execution in light of Kenya’s Ksh300 billion Eurobond that was set to mature in June 2024.
“It can augment our programme as of now up to $650 million (Ksh98 billion) that they have agreed to do,” Ndii stated.
The economist noted that this agreement was reached after an IMF team visited the country last week.
The IMF staff conducted the sixth evaluation of the program throughout the visit.
Although the IMF has not yet released an official statement regarding the review’s outcome, Ndii disclosed that it had been fruitful.
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The announcement was made several hours after Ndii lodged a complaint regarding how former President Uhuru Kenyatta had caused a liquidity crisis in the country by canceling Ksh116 billion Eurobonds days before the 2022 general election.
In an effort to address the error, Ndii disclosed that Kenya had been compelled to procure additional funds via syndicated bank loans, a circumstance that has resulted in the nation’s public debt surpassing Ksh10 trillion.
Following a satisfactory fifth review in July, the IMF extended a Ksh146 billion advance to Kenya.
The IMF announced at the time that Ksh56 billion would be used to bolster the country’s foreign exchange reserves and stabilize its economy, with the remaining Ksh56 billion designated for climate change resilience building.
The IMF Mission Chief for Kenya, Haimanot Teferra, explained that the decision to advance Ksh146 billion was made subsequent to Ruto’s administration demonstrating the feasibility of a repayment formula.
“The authority (Kenya) was able to provide us with contingency plans on how the loan would be repaid,” she stated then.
IMF Boosts Kenya’s Financial Lifeline by Ksh98 Billion