IMF reaches staff agreement with Kenya in step towards $264 million disbursement

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FILE PHOTO: A participant stands near a logo of IMF at the International Monetary Fund - World Bank Annual Meeting 2018 in Nusa Dua

WASHINGTON – The International Monetary Fund said on Friday it reached a staff level agreement with Kenya on a second review of IMF loan arrangements that would release about $264 million to the east African country upon Executive Board approval in coming weeks.

If approved, the disbursement would bring total IMF financial support for Kenya to $984 million for 2021.

“Kenya’s economic rebound continues and the COVID-19 vaccination program has ramped up,” IMF Kenya mission chief Mary Goodman said in a statement, adding that the pandemic dealt a setback to Kenya’s sustainable development goals.

“New challenges include drought in the northern regions of the country and emerging security needs. Energy prices are rising in tandem with world oil prices which, along with higher food prices, has pushed up overall inflation even as core inflation has remained stable,” Goodman said.

The review of Kenya’s Extended Fund Facility and Extended Credit Facility programs found that Kenyan authorities had remained committed to their economic reform program, the IMF said. Kenya had outperformed on its fiscal targets for the 2020/21 fiscal year, and tax revenue has been recovering so far in fiscal 2021/22.

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“The IMF team shared the authorities’ assessment that some space is needed in FY21/22 for emergency spending to face the drought in the north of the country and meet emerging security needs,” Goodman said.

(Reporting by David Lawder, Editing by Rosalba O’Brien)