IMF sets date for Kenya’s Ksh.29 billion loan approval

The International Monetary Fund (IMF) Executive Board is expected to meet on July 18 to approve the disbursement of Ksh.28.8 billion ($244 million) loan to Kenya.

The disbursement is expected to be the third tranche out of a larger Ksh.276.3 billion ($2.34 billion) three-year loan program that was agreed upon in February 2021.

The IMF has updated its executive board calendar to include Kenya’s third reviews under the extended fund facility (EFF) and the extended credit facility (ECF).

The disbursement of the loan is however expected to come nearly three weeks late and after the close of the 2021/2022 financial year when the facility had been expected.

In April, IMF staff and Kenyan authorities had reached a staff-level agreement marking the third-formal review of the 38-month program.

The National Treasury is now expected to appropriate the fresh disbursements in line with the new 2022-23 budget whose implementation began on Friday last week.

The National Treasury closed the prior fiscal year with nearly Ksh.150 billion in missed loans including a scheduled Ksh.118.1 billion ($1 billion) syndicated loan from the international capital markets.

While the National Treasury had contacted a number of leading global banks to tap the syndicate in mid-June, the exchequer is yet to close the loan which was also expected before the end of last month.

Earlier this week, National Treasury Cabinet Secretary Ukur Yatani said the exchequer was yet to receive feedback from global banks on investor interests on the syndicated loan.

“We are still engaging banks, we haven’t concluded. We are yet to receive feedback from the banks,” CS Yatani said on Tuesday.

The new loan wire from the IMF is expected to take total disbursements from the three-year loan program to Ksh.141.7 billion ($1.2 billion).