The International Monetary Fund(IMF), has granted Kenya a new loan of over $941 million to help reinforce the finances of the East African nation.
Kenya is grappling with a host of economic challenges including a large amount of debt, cost of living crisis and currency inflation.
The IMF said in a statement published on Wednesday that its executive board had approved the $941.2 million loan, with an immediate disbursement of $624.5 million.
It added that the total payments under various credit facilities amount to about $2.6 billion.
The Washington-based agency said it forecast Kenya’s economic growth at around 5 percent this year, from an estimated 5.1 percent in 2023.
IMF deputy managing director and acting chairperson, Antoinette Sayeh, stated that “Kenya’s growth remained resilient in the face of increasing external and domestic challenges”.
The credit arrangements for Kenya “continue to support the authorities’ efforts to sustain macroeconomic stability, strengthen policy frameworks, withstand external shocks, push forward key reforms, and promote more inclusive and green growth”.
According to the Treasury data released this month, Kenya’s public debt stands at 10.585 trillion shillings ($65.5 billion).
In December, Kenya ditched a promise to buy back a portion of a $2 billion Eurobond that will be due in June.
Rather, Finance Minister Njuguna Ndung’u said the country had paid $68.7 million in interest on the bond, sidestepping a potential default.
“In its unwavering commitment to upholding a resilient sovereign credit rating and facilitating access to new development financing, Kenya remains dedicated to fulfilling all debt obligations with international lenders,” Ndung’u said.
In November, President William Ruto had announced a plan to buy $300 million of the Eurobond, saying public debt had “become a source of much concern to citizens, markets and our partners”.
Ruto has brought in a rise new or increased tax system to try to sustain the government, but it’s really affecting the citizens who are struggling with increasing prices of goods.
