IMF Approves Ksh.28 billion loan to Kenya Raising The Debt Ceiling To 10 Trillion
The International Monetary Fund (IMF) has approved the release of a Ksh.28 billion loan to Kenya raising Kenya’s debt ceiling to about 10 trillion.
This is after parliament in June approved the increase of the public debt ceiling to Sh10 trillion as a stop-gap measure to allow the next government to borrow Sh846 billion to plug the budget deficit in the fiscal year starting July 1.
The new disbursement represents the third tranche of a 38-month budget support program, inked in April last year and seeks to address Kenya’s debt vulnerabilities.
In its concluding statement following the third review of the arrangement, the IMF stated Kenya was keeping up with the program’s structural reform requirements despite notable delays in execution.
“Kenya’s structural reform agenda, focused on improving governance, has advanced despite some delays. Oversight of State-owned enterprises (SOEs) is being reinforced. New tender documents will allow achieving the long-standing goal of publishing beneficial ownership information of successful bidders for public procurements,” the IMF said in a statement on Monday night.
“An ongoing audit of COVID-19 vaccine spending and the recently completed comprehensive audit of the fiscal year 2020-2021 spending with a focus on COVID-19 spending will improve transparency and enable follow-up by enforcement agencies and other stakeholders.”
The IMF states Kenya’s medium-term outlook remains favorable despite near-term risks represented by rising commodity prices and drought in semi-arid regions.
Inflation is expected to stay above the government’s upper target of 7.5 percent before easing back to the target band in early 2023.
The IMF has retained Kenya’s GDP growth projection at 5.7 percent for 2022 and 5.3 percent in 2023.