Kenya could soon unlock its Ksh464 billion ($3.6 billion) loan facility from the International Monetary Fund (IMF) after the government finally fulfilled all the requisite conditions, paving the way for the disbursement.
Speaking to Reuters on the sidelines of the World Bank Group and IMF annual summit, CBK Governor Kamau Thugge noted that Kenya fulfilled all the targets mandated by the Bretton Woods Institution and that the achievement paved the way for more engagement with the multilateral lender.
“We have achieved what is needed for the reviews to be completed, but obviously there are other targets for December,” Thugge told journalists from the British publication.
Thugge, while addressing the press, stated that the government successfully tamed inflation which has declined to a staggering 3.6 per cent compared to 7.7 per cent in the same period last year, depicting an improvement in the country's economy.
The Central Bank Governor also highlighted the increase in forex reserves which he disclosed stood at $8.6 billion by mid-October, representing four months of imports.
According to Thugge, the decision by the central bank to cut base lending rates at the start of the month also played a significant role in pushing for the loan disbursement by the IMF. On October 4, the central bank lowered the base lending rate by 75 basis points to 12.00 per cent.
When asked whether the country would continue applying for more loans from the lender after the upcoming disbursement, Thugge assured the publication that the country would consider engaging further but after in-house consultations.
“It will depend on the balance of payments and needs, it will depend on the ambitiousness of the targets that we agree. But definitely, we will have our relationship going forward with IMF,” Thugge added.
A staff-level agreement between Kenya and the IMF is expected to take place on October 30 this year. During the meeting, the multilateral lender will approve the disbursement of Ksh78 billion.
In 2021, Kenya opened talks with the IMF for the disbursement of the Ksh464 billion that was supposed to be disbursed in trenches. After several years of discussions, President William Ruto's administration reached an agreement with the lender for the disbursement of the money in phases.
The first phase of the funds was supposed to be made in June this year, however, the disbursement was suspended after Kenyans took to the streets to protest against the defunct Finance Bill 2024.
As the demonstrations intensified, President Ruto was forced to withdraw the piece of legislation that proposed a raft of task measures that were part of the IMF's fiscal conditions for the country.
