President William Ruto's administration will have to wait longer to receive a Ksh131 billion loan from the International Monetary Fund (IMF) as a result of the flood crisis experienced across the country in the past two months.
This is after IMF directors, who toured Kenya last month, sought to review the program before approving the loan, which is expected to be the largest disbursement from the IMF since 2021.
The review has, however, taken a longer period with the IMF attributing the delay to assessing the economic impact caused by the flood crisis.
According to the government spokesperson Isaac Mwaura, thousands of Kenyans have been affected in the past month, with 291 fatalities recorded and over 278,155 people displaced as of Thursday, May 16.
In a press briefing on Thursday, Julie Kozack, IMF Director of Communications explained further that the authority is in the process of formulating policies and reforms moving forward.
"So let me start by saying that we regret the loss of life and property due to the recent heavy rains and floods in Kenya. Discussions on the 7th review of the EFF program are ongoing and they are indeed assessing the economic impact of these devastating events in addition to the normal assessment of program performance to date, and the authorities plan for policies and reforms moving forward,
"As discussions are ongoing, we will communicate further details in due course as the discussions continue."
She also did not reveal whether President Ruto would meet with the IMF directors during his visit to Washington DC, USA this coming week.
Ruto is expected to begin his state visit to the US on May 23, 2024, marking the 60th anniversary of US-Kenya diplomatic relations.
So far, IMF has disbursed a total of Ksh341 billion under the Extended Fund Facility (EFF) arrangement from February 2021 to January 2024.
The EFF program provides financial assistance to countries to aid in addressing medium and long-term balance of payment issues. The program provides a longer repayment plan to help countries implement structural reforms.
Kenya is also expected to access Special Drawing Rights amounting to Ksh42.3 billion in October 2024 and in March 2025.
SDRs are supplementary foreign exchange reserve assets that are provided by the IMF for its member countries. SDRs assist in improving the liquidity of a country and supplementing its official reserves.
Kenya's official reserves have remained under pressure in the past months due to the increased debt servicing costs attributed to the rising interest rates.
The current reserves stand at around Ksh930 billion, a figure that is projected to rise by another Ksh131 billion by the end of December 2024, according to the Central Bank of Kenya (CBK).
