NAIROBI. Jan. 18 (Xinhua) -- The International Monetary Fund (IMF) said it has approved a 684.7 million U.S. dollar loan to help Kenya finance various development programs amid economic challenges.
The IMF said the 624.5 million dollars will be disbursed immediately under the Extended Fund Facility (EFF) and Extended Credit Facility (ECF) arrangements while 60.2 million dollars will be released under the Resilience and Sustainability Facility (RSF) program.
"The Kenyan economy remains resilient against a challenging global backdrop even as it recovers from the legacy of the COVID-19 pandemic and the worst multi-season drought over the past two years," it said in a statement issued on Wednesday night.
The loan, which was approved in April 2021, aims to support Kenya's program to address debt vulnerabilities, the response to the COVID-19 pandemic and global shocks, and to enhance governance and broader economic reforms.
The lender, which concluded its sixth review for Kenya, said total disbursements under the EFF/ECF arrangements so far are 2.6 billion dollars.
The IMF said the Kenyan economy expanded by 5.6 percent year-on-year in the first nine months of 2023, driven by a strong recovery in agriculture which also helped lower both overall and food inflation. However, it said non-agricultural growth slowed amid tighter policies.
Antoinette Sayeh, deputy IMF managing director, said Kenya's growth remained resilient in the face of increasing external and domestic challenges.
Sayeh said the EFF/ECF and RSF arrangements continue to support the government's efforts to sustain macroeconomic stability, strengthen policy frameworks, withstand external shocks, push forward key reforms, and promote more inclusive and green growth.
"Kenya's performance under the ECF/EFF arrangements has been mixed with adherence to quantitative targets being broadly satisfactory. The authorities have made welcome progress in some key areas, including governance and public financial management. Continued implementation of corrective measures to address missed targets and accelerated reforms will be important," she said.
The IMF projected that Kenya's growth would reach around 5 percent in 2024 amid ongoing adjustments in the fiscal policy and external accounts.
It said inflation is expected to inch up in the first half of 2024, driven primarily by global oil price volatility and exchange rate pass-through, but to remain contained due to the recent monetary policy tightening and as the authorities strive to deliver a stronger fiscal consolidation to stabilize the overall public debt/GDP in 2024.
Kenya, anticipating funding from the IMF, World Bank and other development partners, hopes that inflows will significantly bolster foreign exchange reserves. ■
