The government is currently on the verge of acquiring Ksh77 billion ($600 million) from the International Monetary Fund (IMF).
Speaking during the Monetary Policy Meeting (MPC) held on October 9, the Central Bank of Kenya (CBK) Governor Kamau Thugge revealed that the government was in the final stages of an agreement with the Bretton Woods Institution for the multi-billion disbursement.
Thugge noted that the talks between Kenya and the IMF were progressing well and that the multilateral lender was expected to disburse the amount before the end of this year.
According to the CBK Governor, the loan would help in bridging the central bank's current account deficit by building Kenya's forex reserves to Ksh254 billion.
Thugge, while elaborating on the deal, noted that President William Ruto’s administration had agreed on making fiscal adjustments as recommended by the Fund, thus paving the way for the disbursement.
“There have been discussions with the IMF and the discussions and we are ready to combine the seventh review and the eighth review and we have made a lot of progress. We are in the final stages of the agreement," Thugge noted.
"The fiscal framework has been agreed and the fiscal deficit has also been agreed. We have in our projections for the reserve build-up for the year of a whole of $1.9 billion, I can say that discussions are going well and we do expect disbursement would be made before the end of the calendar year."
The move came days after the Kenyan Government requested the multilateral lender to probe corruption and governance cases within its administration that are derailing the country's revenue.
A corruption and governance diagnostic request by Kenya was expected to help unlock the Ksh474 billion ($3.6 billion) IMF disbursement Kenya was supposed to receive upon completion of the seventh loan review. the amount was expected to be disbursed in phases.
"We have encouraged the Kenyan authorities in the past, and we continue to encourage them to request a governance diagnostic," noted IMF spokesperson Julie Kozack during a press briefing in Washington DC, the United States.
In June this year, Kenya reached a staff-level agreement with the IMF on the disbursement of the Ksh77 billion in the first phase of the loan approval, however, the lender suspended the disbursement after protesters opposed the defunct Finance Bill 2024 which proposed a raft of tax measures.
President Ruto's decision to withdraw the piece of legislation forced the IMF to suspend its loan approval, faulting Kenya for contravening the agreement previously reached on readjusting the country's fiscal and monetary policies.
