Staff from the International Monetary Fund and Kenya have come to an agreement that might lead to the release of more than $1 billion in new funding, relieving strain on the country’s government finances in the largest economy in East Africa.
The impacts of the worst drought in forty years and mounting debt repayments have put a pressure on Kenya’s finances, but the managing director of the IMF declared earlier this month that she did not anticipate a default.
The Extended Fund Facility and Extended Credit Facility agreements underwent their most recent review, which was authorized in April 2021, and a new arrangement under the Resilience and Sustainability Facility, according to a statement released by the IMF on Tuesday.
In order to give Kenya more time to meet all requirements, Fund staff and Kenyan officials agreed to extend the Extended Fund Facility and Extended Credit Facility arrangements by an additional 10 months, to April 2025, and to increase the amount of money available to Kenya under those facilities by approximately $544 million.
Also, Kenya will get access to $544 million through the Resilience and Sustainability Facility, which is intended to support climate change adaptation and resilience.
The IMF stated that a total of $3.5 billion had been committed to funding for Kenya under the three facilities, and that its executive board would likely consider the staff-level agreement in July.