Nairobi — The International Monetary Fund (IMF) staff has reached an agreement to advance Sh28 billion loan to Kenya as part of the 38-month IMF’s Extended Fund Facility (EFF) and Extended Credit Facility (ECF)financed program.
The agreement is the third review of the economic policies program which took place between March 31 and April 22.
The review focused on discussing progress on reforms and policy priorities undertaken by the Uhuru Kenyatta-led Government.
The lender noted that Kenya is on track to meet its fiscal objectives and has made progress and is moving forward on its governance and anti-corruption agenda
"Kenya’s fiscal position has been underpinned by strong tax revenue performance this year, buoyed by a robust economic recovery and the important tax policy measures already undertaken as part of Kenya’s multi-year plan to reduce debt-related vulnerabilities," the lender said.
The funds, IMF said, have brought resilience that will allow cushioning part of the impact of the sharp increase in global energy and fertilizer prices on households and businesses.
Further, it lauded Kenya for making progress on restructuring state-owned enterprises including Kenya Airways and Kenya Power whose ongoing restructuring effort was deemed important to minimize costs to the Exchequer.
KQ will receive an Sh36.6 billion bailout in the year starting July as part of efforts to minimize cash-flow constraints following global lockdowns triggered by the Covid-19 pandemic
The government has directed the airline to trim its network and rationalize its flight frequencies.
"At KPLC, crystallizing an action plan to restore KPLC’s medium-term profitability and fully cover any financing gaps through end-2023 will likewise be critical to minimize calls on the budget," IMF pointed out
The Bretton wood institution further lauded the CBK for making progress in strengthening its monetary policy framework."The banking sector has remained resilient, supported by steps taken by the CBK to sustain the economy and help households and businesses navigate the challenging environment," the lender indicated.