The International Monetary Fund (IMF) has reached an agreement with Kenyan authorities over Kenya’s Extended Fund Facility (EFF) and Extended Credit Facility (ECF).
The agreement is a staff-level agreement needed to complete the seventh reviews of EFF and ECF arrangement and second review of Resilience and Sustainability Facility (RSF) arrangement.
IMF agreed to provide US$ 1.27 billion for Kenya, subject to approval by IMF board.
During meetings held in Nairobi from April 2 to 12, May 9 to 15, 2024 and virtually, the IMF team also discussed key technical aspects of the agreement, including recalibrating access to IMF resources to align more closely with Kenya’s current needs following its access to the international bond markets earlier this year.
The Resilience and Sustainability Facility (RSF), approved on 17th July 2023, stands at US$ 120 million.
According to the Fund, Kenya’s economy grew 5.6 percent in 2023 driven by a strong recovery in Agriculture and Services sector resilience on the back of favorable weather conditions. However, destruction from recent floods poses risks and therefore subject to support from both national and international stakeholders.
“Despite these positive developments, a significant shortfall in tax revenue collection and deterioration in the primary fiscal balance in FY 2023/24 relative to program targets is expected to keep domestic borrowing needs elevated. As a result, interest payments have increased, putting pressure on public debt even after the latter benefited from a strengthened shilling.”
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