By Rédaction Africa Links 24 with Africanews
Published on 2024-01-18 16:24:13
The International Monetary Fund (IMF) has approved a new loan of over $941 million for Kenya in an effort to help strengthen the country’s finances. Kenya is currently facing numerous economic challenges, including a high level of debt, a cost of living crisis, and a depreciating currency.
The loan, approved by the IMF’s executive board, includes an immediate disbursement of $624.5 million. The total payments from various credit facilities will amount to about $2.6 billion. The IMF also stated that it forecasts Kenya’s economic growth to be around 5 percent for this year, a slight decrease from the estimated 5.1 percent in 2023.
Antoinette Sayeh, IMF’s deputy managing director and acting chair, highlighted the resilience of Kenya’s growth despite increasing external and domestic challenges. The credit arrangements with Kenya are meant to support the government’s efforts to maintain macroeconomic stability, strengthen policy frameworks, withstand external shocks, implement key reforms, and promote more inclusive and sustainable growth.
According to the latest Treasury data, Kenya’s public debt stands at 10.585 trillion shillings ($65.5 billion). In December, the country opted to pay $68.7 million in interest on a $2 billion Eurobond instead of buying back a portion of it that is due to mature in June.
Finance Minister Njuguna Ndung’u emphasized Kenya’s commitment to upholding a resilient sovereign credit rating and meeting all debt obligations with international lenders. President William Ruto had initially announced a plan to buy $300 million of the Eurobond in an effort to address concerns about the growing public debt. However, the government has also faced challenges in generating revenue, as new or increased taxes have been met with public disapproval and legal challenges.
Kenya’s economic situation remains a matter of concern and the country is taking steps to address its financial challenges with the support of the IMF. The loan from the IMF is expected to provide some relief and support Kenya’s efforts to strengthen its economy and financial stability.
