IMF approves Ksh.78 billion loan for Kenya

The review comes after the IMF concluded a meeting in determining the seventh and eight reviews; a process that was disrupted in early June during the anti-government protests. 

Following the meeting, the IMF exuded confidence that the funds would address Kenya's challenge in reviving the country's economic status. 

IMF currently has three programs with Kenya; Extended Fund Facility (EFF), Extended Credit Facility (ECF) arrangement and Resilience and Sustainability Facility (RSF) programs. 

EFF and ECF are programs that provide financial assistance to countries facing problems in reducing inflation levels because of structural issues and require time to rebuild.

The difference between the two programs is based on duration as EFF provides countries with four years of restructuring while ECF can be extended to five years. 

On the other hand, RSF are funds that support a country's climate agenda. 

According to IMF, Kenya will now access Ksh.62.5 billion under the EFF/ECF arrangement and Ksh.15.4 billion under the RSF arrangement. 

The board pointed out the country's fiscal challenge following the tax revenue shortfall in the previous financial year 2023/24 as well as the withdrawal of the Finance Bill 2024 after the widespread Gen Z protests. 

Through the EFF/ECF program, IMF projected that Kenya would still strengthen the country's economic status. 

At the conclusion of the meeting, Gita Gopinath, IMF's Deputy Managing Director noted that the board is committed to supporting Kenya to build resilience to economic shocks and mitigate climate-related risks. 

“Kenya’s economy remains resilient, with growth above the regional average, inflation decelerating, and external inflows supporting the shilling and a buildup of external buffers, despite a difficult socio-economic environment," she stated. 

“The EFF/ECF and the RSF arrangements continue to support the authorities’ efforts to anchor macroeconomic stability, reduce debt vulnerabilities, promote reforms, and mitigate climate-related risks."

In April 2021, IMF came into the picture as former president Uhuru Kenyatta and his DP (now President) William Ruto entered into a four-year agreement. 

President Ruto's administration is expected to extend the program after it comes to a close in April 2025.