The International Monetary Fund (IMF) has expressed confidence in President William Ruto's debt management strategy ahead of disbursing a Ksh52.7 billion loan to the country.
In a statement released by the IMF delegation on Tuesday, November 8, the financial institution lauded some of the measures Ruto's government took to cut down on expenditure.
IMF visited the country for two weeks, beginning October 25 to November 8, to review measures it recommended to the government before agreeing to the Ksh255 billion loan that was to be disbursed in instalments.
The release of the Ksh52.7 billion loan will increase the credit disbursed to Kenya to Ksh188.3 billion out of the Ksh255 billion agreed upon.
“There has been good progress on fiscal adjustments needed to address debt vulnerabilities, although pressures remain elevated.
"Government is taking forceful measures to reduce the fiscal deficit further. Fuel subsidies were mostly eliminated in September 2022, and the variable cost adjustments in electricity prices were reinstated,” the statement read in part.
The IMF staff mission noted that the reduction of the loan uptake by the country is a great stride in restoring the debt to Gross Domestic Product (GDP) ratio to workable levels.
"The process of formulating a supplementary budget for the 2022/23 financial year that will institute significant spending cuts with a view to modestly reducing the deficit from the previously programmed level of 5.9 per cent of GDP," the IMF wrote.
Furthermore, the mission lauded the move to publish beneficial ownership information for awarded government contracts explaining that it pushes for transparency and accountability.
It recommended reforms of financially troubled State-Owned Enterprises to increase the government's income generation.
Meanwhile, the team presented its findings of a fourth review of the country’s 38-month loan program to the IMF Executive Board, which is set to approve the Ksh52.7 billion posting.
On October 14, IMF African department director, Abebe Selassie, expressed willingness to give Kenya more loans to implement economic reforms.
"Kenya welcomes the support of the International Monetary Fund (IMF) towards building the resilience of the Kenyan economy and ensuring sustainable economic growth.
"We will work with the IMF to help overcome the effects of climate change," President William Ruto added on Tuesday, November 8.
