The International Monetary Fund (IMF) has provided Kenya with a loan of more than $941 million (€864 million) to help the East African country strengthen its finances, the institution said this Thursday.
In a statement on Wednesday, the IMF said its Executive Board had approved a loan for immediate disbursement of $624.5 million (573.8 million euros).
The total amount of payments under various credit lines is about $2.6 billion (2.38 billion euros), it said.
Kenya, the powerhouse of East Africa, is grappling with a number of economic problems, including massive debt, a rising cost of living crisis and a devaluation of its currency.
Its economy has been rocked by Covid-19, followed by the shocks of war in Ukraine and a historic drought in the Horn of Africa.
The IMF expects Kenya’s economy to grow by about 5% this year, up from an estimate of 5.1% in 2023.
“Kenya’s growth remains resilient in the face of external and internal challenges,” said Antoinette Saye, Deputy Director-General and Acting President of the IMF.
The Kenya loan agreements “continue to support the authorities’ efforts to maintain macroeconomic stability, strengthen policy frameworks, resist external shocks, advance key reforms and promote inclusive and green growth,” he added.
Kenya’s public debt stands at Sh10.58 billion ($65.5 billion), according to the latest Treasury data released this month.
In December, Kenya defaulted on its commitment to repurchase a portion of $2 billion worth of important “Eurobonds” (debt securities in a currency other than the issuing country) due in June 2024.
Instead, he said the country had paid $68.7 million (€61.1 million) in interest on that debt security, thus avoiding a possible default.
“In its unwavering commitment to maintaining a sustainable sovereign credit rating and facilitating access to new development finance, Kenya remains committed to meeting all its obligations to international lenders,” said Kenyan Finance Minister Njuguna Ndung U.
Kenyan President William Ruto announced in November that the country would pay the first tranche of $300 million (275.5 million euros), paving the way for the first disbursement of funds from the IMF.
To try to reduce the country’s debt, the government has prepared a budget – very unpopular and sparking at times violent demonstrations – which includes several new taxes that should raise 289 billion shillings (two billion euros) to replenish the country’s national debt. a budget of 3.6 billion shillings (24 billion euros) is planned for 2023-2024.
Inflation remained high at 6.6% in December and could rise slightly in the first half of this year, according to the IMF.
The Kenyan shilling is also trading at an all-time low of around 160 to the dollar.
Author: Lusa
Source: CM Jornal
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