IMF approves Sh109.8 billion new funding to Kenya

By Business Daily Africa

The International Monetary Fund (IMF) Executive Board has approved the disbursement of Sh109.8billion ($684.7 million) to Kenya.

The approval made on Wednesday follows the completion of the sixth review of Kenya’s multi-year arrangement with the fund under the Extended Fund Facility (EFF) and Extended Fund Facility (ECF) and the first review of the Resilience and Sustainability Facility (RSF).

While making the approval, the IMF board observed that the Kenyan economy has remained resilient against a challenging external and domestic backdrop which include a multi-season drought.

“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,” IMF Deputy Managing Director Antoinette Sayeh stated.

Depreciation-induced inflation

The IMF expects the economy to remain resilient with GDP growth having accelerated through the first three quarters of 2024 from a strong rebound in the agriculture sector.

The fund has projected growth in 2024 at five percent while noting ongoing adjustments in fiscal policy and external accounts.

Inflation is, however, expected to edge up in the first half of the year to June from global oil price volatility and from local currency depreciation-induced inflation.

The new funding from the IMF brings total disbursements under the EFF/ECF program to Sh994.6 billion ($2.6 billion). The multi-year IMF program runs up to April 2025.