The IMF Executive Board recently authorized a substantial financial package for Kenya, amounting to approximately Sh109.8 billion ($685 million).
This decision, announced on a Wednesday, marks a pivotal moment in Kenya’s ongoing financial relationship with the International Monetary Fund, particularly under the frameworks of the Extended Fund Facility (EFF) and Extended Credit Facility (ECF), as well as the initial review under the Resilience and Sustainability Facility (RSF).
Antoinette Sayeh, the Deputy Managing Director of the IMF, highlighted Kenya’s robust economic performance despite numerous internal and external pressures, including a prolonged drought. Sayeh commended the resilience of Kenya’s economy, noting its ability to maintain stability and pursue essential reforms for inclusive and sustainable growth.
She attributed this resilience to the support provided by the EFF/ECF and RSF arrangements.
The IMF forecasts a steady growth trajectory for the Kenyan economy, driven by a significant recovery in the agricultural sector.
“Kenya’s growth remained resilient in the face of increasing external and domestic challenges. The EFF/ECF and RSF arrangements continue to support authority efforts to sustain macroeconomic stability, strengthen policy frameworks, withstand external shocks, push forward key reforms, and promote more inclusive and green growth,” she said.
This rebound has contributed to an acceleration in GDP growth through the first three quarters of 2024.
The fund anticipates a 5% growth rate for the year 2024, acknowledging the adjustments in Kenya’s fiscal policy and external accounts.
However, concerns about rising inflation in the first half of the year remain, largely due to global oil price fluctuations and inflation induced by the depreciation of the local currency.
With this latest disbursement, the total funds released to Kenya under the EFF/ECF program have reached a staggering Sh995 billion ($2.6 billion).
This multi-year IMF program, which extends until April 2025, aims to bolster Kenya’s economic resilience and sustainability.
