The Executive Board of the International Monetary Fund (IMF) concluded the seventh and eighth reviews under Kenya’s Extended Fund Facility (EFF) and Extended Credit Facility (ECF), as well as a review of the Resilience and Sustainability Facility (RSF).
The review has allowed for immediate disbursements totaling $606.1 million to support Kenya’s fiscal and climate goals.
Kenya requested a waiver from the IMF after missing revenue targets in the current review period.
According to IMF, these programs aim to address Kenya’s debt vulnerabilities, ensure funding for critical social projects, and reinforce climate resilience efforts.
The IMF’s EFF and ECF programs, initially approved in April 2021, help Kenya tackle debt vulnerabilities while safeguarding resources for essential social services.
In addition, the RSF arrangement, approved in July 2023, complements Kenya’s ongoing efforts to confront climate-related challenges by catalyzing further private investments in climate finance.
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As part of these reviews, the IMF announced a reduction in Kenya’s access under the EFF and ECF arrangements, adjusting it to fall within regular access limits.
This move, combined with recent changes to the IMF’s surcharge policy, is expected to significantly reduce Kenya’s interest payments, providing further financial relief.
“Kenya’s economy remains resilient, with growth above the regional average, inflation decelerating, and external inflows supporting the shilling and a buildup of external buffers, despite a difficult socio-economic environment,” said IMF First Deputy Managing Director Gita.
The Kenyan shilling has gained 21% against the US dollar, making it the world’s best-performing currency so far in 2024, according to data from Bloomberg. The shilling now trades at Ksh.129 per dollar.
The IMF also approved waivers on unmet tax revenue and primary budget balance targets, noting corrective measures through the supplementary budget for FY2024/25.
The Central Bank of Kenya’s actions in monetary policy and exchange rate flexibility were also recognized as critical to enhancing resilience to external shocks and fostering competitiveness.
