Kenya gets Sh29 billion more from IMF

Kenya will access some Sh29.4 billion from the International Monetary Fund (IMF) to help with its budgetary needs including the fight against Covid-19. 

This is after IMF staff and Kenyan authorities reached an agreement on some of the conditions of a Sh256 billion programme whose objective is to improve the country's financial position.

Should the IMF's executive board approve the staff-level agreement, Kenya will have received a total of Sh109.7 billion.

"The authorities have remained firmly committed to their economic programme in this complex environment,” said the IMF in a statement, noting that the government outperformed on their fiscal target for the financial year 2020-21.

The global lender said the country’s tax collection revenue has improved, offering the National Treasury essential resources that will see it cut down on its borrowing needs.

The three-year programme is aimed at improving the country’s public finances by increasing tax revenues and reducing spending, especially non-essential spending. This will result in the narrowing of the gap between the country’s tax revenues and its spending budget- what is technically known as fiscal deficit.

The programme will also see some limping state corporations restructured in what is likely to result in the retrenchment of civil servants as some of the state bodies are merged, privatised or just killed.

A lot of corporations, including Kenya Power and Kenya Airways are under surgery as part of the conditions.

The IMF noted that although Kenya’s economic recovery continued as the country intensified its vaccinations against Covid-19, it noted that drought in the northern parts of the country and emerging security threats are likely to slow this rebound.