The International Monetary Fund (IMF) has reached a staff-level agreement with Kenya for the release of Sh56.58 billion ($410 million) for budgetary support pending approval from the IMF Board.

The IMF’s management and Executive Board are expected to approve the loan in July to allow for the immediate release of the funds to the National Treasury.

The release of the loan will bring to $2.017 billion (Sh278.34 billion) the total amount of money that Kenya will have received from the IMF so far under the $2.43 billion (Sh335.34 billion) programme.

Further, with the EFF/ECF augmentations and the Resilience and Sustainability Facility (RSF) support, the total IMF commitment under these arrangements would be SDR2.633 billion (about $3.52 billion or Sh485.76 billion).

The staff-level agreement follows the fifth review of the 38-month Extended Fund Facility (EFF) and Extended Credit Facility (ECF) where Kenya also requests access to further funding under the RSF and further augmentation under the EFF/ECF.

The RSF will help bolster long-term structural climate resiliency and adaptation, while also strengthening macroeconomic stability as the economy transitions toward renewable energy, the lender said.

Increase of access

The IMF has also approved the increase of access under the EFF/ECF totalling 75 percent of the quota (SDR407.1 million, about $544.3 million (Sh75.11 billion) and has extended the duration of the programme by 10 months to April 2025 “to allow sufficient time for meeting the program objectives”.

Further, the lender has approved a new 20-month RSF arrangement with access also of 75 percent of the quota that will run in parallel with the EFF/ECF arrangements until April 2025.

The review follows the visit by a staff team from the IMF led by Haimanot Teferra to Nairobi between May 9 to May 22.

“The IMF team and the Kenyan authorities have reached staff-level agreement on the fifth reviews of Kenya’s economic program under the Extended Fund Facility (EFF) and Extended Credit Facility (ECF) arrangements,” said Ms Teferra.

“The agreement is subject to IMF management approval and consideration by the Executive Board, which are expected in July. Upon completion of the fifth review by the IMF Executive Board, Kenya would have immediate access to SDR306.7 million (about US$410 million), including from the augmentation of access under the ECF/EFF,” she said.

The IMF noted that Kenya’s private sector has generally remained resilient despite the Kenyan economy being strained by a challenging environment.

Kenya’s economy slowed down to a growth of 4.8 percent in 2022 compared to a revised growth of 7.6 percent in 2021, according to the Economic Survey 2023 released this month by the Kenya National Bureau of Statistics (KNBS).