IMF approves over $235.6 million to Kenya

The International Monetary Fund, said its executive board has approved a $235.6 million disbursement to Kenya.

The approval comes following the third review of the country’s Extended Credit Facility and Extended Fund Facility arrangements.

Budget Support
The IMF said, the disbursement is usable for budget support and brings such payouts to $1.208 billion under the 38-month arrangements, which were worth $2.34 billion when they were approved in April 2021.

“Kenya’s economy has rebounded strongly in a challenging environment and is projected to grow 5.7% in 2022,

According to IMF, Kenya’s inflation rate, which hit 7.5% in June, was likely to peak this year before easing back to the Central Bank of Kenya’s 2.5% target by early 2023.

“Downside risks predominate in the near-term. Uncertainties stem from the war in Ukraine, continuing drought in the semi-arid regions, unsettled global financial market conditions and the political calendar,

“But Kenya’s medium-term outlook remains favorable,” the IMF said.

Tax Collections
The commission said that Kenya showed “very strong” performance in tax collections during the 2021/22 fiscal year, which has created fiscal space to temporarily cushion part of the higher fuel and food costs that have hit households while still meeting the program’s fiscal targets.

“The approved fiscal year 2022/23 budget broadens tax collection and maintains careful expenditure control while protecting social spending,” the IMF added.

REUTERS/CO