Kenya is set to access a Ksh28 billion loan after the government reached an agreement with representatives from the International Monetary Fund (IMF).
In a press statement dated Monday, April 25, it was revealed that government officials drawn from the Treasury and the Office of the President had been engaged in talks to review the IMF Extended Fund (EFF) Facility and Extended Credit Facility (ECF).
However, it was revealed that the loan would be accessed upon approval by the IMF executive.
"IMF staff and the Kenyan authorities have reached a staff-level agreement on economic policies to conclude the third reviews of the 38-month EFF/ECF financed program. Kenya would have access to about Ksh28 billion (US$244 million) in financing once the review is formally completed by the IMF Executive Board.
"The agreement is subject to the approval of IMF management and the Executive Board in the coming weeks," read the statement in part.
Kenya was represented by Treasury Cabinet Secretary, Ukur Yatani, Central Bank of Kenya (CBK) Governor Dr. Patrick Njoroge, and Head of the Public Service, Joseph Kinyua.
Additionally, it was revealed that the agreement was reached after discussions of the country's economic policies that were termed progressive.
IMF stated that President Uhuru Kenyatta's administration had taken steps in addressing the ballooning public debt through various reforms that have seen the country witness an increase in revenue collection.
“Kenya is on track to meet its fiscal objectives and put debt as a share of GDP firmly on a downward path. Kenya’s fiscal position has been underpinned by strong tax revenue performance this year, buoyed by a robust economic recovery and the important tax policy measures already undertaken as part of Kenya’s multi-year plan to reduce debt-related vulnerabilities.
“Kenya is moving forward on its governance and anti-corruption agenda. Revised documents for government tenders, introduced on April 21, 2022, will enable the publication of beneficial ownership information for successful bidders in government tenders, which will be a requirement going forward," read the statement in part.
Upon accessing the credit, the government will use the funds to cushion Kenyans against inflation that has seen the cost of living skyrocket.
The rise in prices for some of the basic commodities has been blamed on the ongoing war between Russia and Ukraine. Since the beginning of the war, prices of essential commodities such as wheat, milk and cooking oil have shot through the roof.
"Spillovers from the war in Ukraine are expected to have a modest impact on growth in the near term, as Kenya’s direct exposure to Russia and Ukraine is relatively limited. Staff projects growth at 5.7 percent in 2022, reflecting a pickup in agriculture and continued recovery in services and other sectors," read the statement in part.
